WHEREAS:
Kroger employs nearly 420,000 associates and while the company has raised wages and expanded benefits for associates in 2022, Kroger’s average hourly wage is only $17,1 with no disclosure of the number, or demographics, of associates earning at or above this amount. This puts the company behind an increasing number of retailer peers who have raised their starting wages to at least $15 an hour.2 The 2021 total compensation of Kroger's median associate was $26,763.3 While the company’s workforce is 50.4% female and 38.5% minority, these groups only make up only 33% and 26% of store leaders.4
More than half the U.S. population fails to earn a living wage.5 According to MIT, the national average living wage is $17.46 per hour – or $36,311 annually.6 The current federal minimum wage stands at $7.25 and applies in 20 states.
A JUST Capital poll shows that 87% of Americans say large U.S. companies have responsibility to regularly increase wages to keep up with the rising cost of living.7
Increasing wages for those earning the least is fundamental to ensuring an equitable economy that leaves no one behind while promoting shared prosperity, and helpful in closing gender and racial pay gaps.8
The Congressional Budget Office estimates that income inequality has risen between 1979 and 2019, even after accounting for transfers and taxes.9
Research reveals that:
Income inequality slows U.S. economic growth by reducing demand by 2 to 4 percent.10A 1% increase in inequality leads to a 1.1% per capita GDP loss. 11Excessive inequality increases health costs and decreases the value of human capital.12 By paying its employees less than a living wage, the Company increases its margins and thus financial performance. But gains in Company profits that come at the expense of society and the economy is a bad trade for most Company shareholders, who are diversified and rely on broad economic growth to achieve their financial objectives. The costs and risks created by inequality will directly reduce long-term diversified portfolio returns.
Kroger’s 10-K, reports operating profit of $3.5 billion and lists labor costs and inflation among risks that could adversely affect the company’s financial position,13 but fails to consider the costs that their compensation practices has on the broader economy and for the diversified investor.
 
1 https://www.thekrogerco.com/wp-content/uploads/2022/08/Kroger-Co-2022-ESG-Report.pdf 2https://www.cnbc.com/2021/12/29/minimum-wage-employers-moving-faster-than-states-to-raise-hourly-pay.html3 https://d18rn0p25nwr6d.cloudfront.net/CIK-0000056873/638cf5c4-bc98-48d2-95bc-e236a21fec76.html4 https://www.thekrogerco.com/wp-content/uploads/2022/08/Kroger-Co-2022-ESG-Report.pdf5 https://livingwageforus.org/living-wage-for-us-data-shows-over-half-of-americans-earning-less-than-a-livi ng-wage/6 https://justcapital.com/reports/living-wage-guide-for-business-just-jobs-explained/#:~:text=The%20nation al%20average%20living%20wage,per%20hour%20%E2%80%93%20or%20%2436%2C311%20annually. ; https://livingwage.mit.edu/articles/99-a-calculation-of-the-living-wage 7https://justcapital.com/reports/2022-survey-workers-and-wages-are-more-important-than-ever-to-the-ame rican-public/8 https://www.nelp.org/publication/what-a-15-minimum-wage-means-for-women-and-workers-of-color/9 The Distrihttps://www.cbo.gov/system/files/2022-11/58353-HouseholdIncome.pdfbution of Household Income, 2019 (cbo.gov)10 https://www.epi.org/publication/secular-stagnation/11 https://www.pionline.com/sponsored-content/facing-hard-truths-material-risk-rising-inequality12 https://www.pionline.com/sponsored-content/facing-hard-truths-material-risk-rising-inequality13 https://d18rn0p25nwr6d.cloudfront.net/CIK-0000056873/107badbb-3656-4d1e-8e88-bede8ee11566.pdf