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Thursday, January 15, 2015

Aetna Sets Wage Floor: $16 an Hour

Today's post was shared by Steven Greenhouse and comes from

Amid signs of a tightening labor market, Aetna Inc. plans to boost the incomes of its lowest-paid workers by as much as a third in a bid to draw top prospects and reduce turnover.

The move by the big health insurer highlights larger debates over the pace of the economic recovery and the compensation of people toward the bottom of the wage scale. Around 12% of Aetna’s domestic work force will see a raise to a floor of $16 an hour, primarily employees in customer service and billing-related jobs. Aetna, which also said it will cut health-care costs for many of the same employees next year, follows Gap Inc., Starbucks Corp. and others in raising the lower limit on workers’ wages.

Aetna Chief Executive Mark T. Bertolini said the company’s shift reflects changes in the insurance industry, which is increasingly selling coverage to individuals. “We’re preparing our company for a future where we’re going to have a much more consumer-oriented business,” he said, and Aetna wants “a better and more informed work force.”

Economists and policy makers have been on the lookout for signs of growth in workers’ pay, which has lagged behind other markers of improved economic activity, including rising employment and economic output. While many economists say wage inflation remains a remote...

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