SUPPORTING STATEMENT
Target increased its minimum hourly wage to $15 in 2020, and announced a new “starting wage range” of $15-$24 in 2022.2 While that is good progress, the living wage in 2022 was $25.02 per hour per worker annually for a family of four (two working adults).3 The highest wages in Target’s range are reportedly reserved for high-cost markets such as New York City,4 but the living wage there was $30.79 in 2022. Target’s CEO, meanwhile, makes 680 times more than the Company’s median employee. While people of color compose 54 percent of Target’s U.S. workforce, they account for only 29 percent of leadership team roles,5 indicating they make up a disproportionate number of employees not earning a living wage.
Such inequality and disparity harm the entire economy. For example, closing the living wage gap worldwide could generate an additional $4.56 trillion annually through increased productivity and spending,6 translating to a more than 4 percent increase in annual GDP. A 2020 report found that had four key racial gaps for Black Americans—wages, education, housing, and investment—been closed in 2000,
$16 trillion could have been added to the U.S. economy. Closing those gaps in 2020 could have added $5 trillion to the U.S. economy over the ensuing five years.7
By paying so many of its employees below a living wage, Target may believe it will increase margins and thus financial performance. But gain in Company profit that comes at the expense of society and the economy is a bad trade for Company shareholders who are diversified and rely on broad economic growth to achieve their financial objectives. The costs and risks created by low wages and inequality will directly reduce long-term diversified portfolio returns because a drag on GDP directly reduces returns on diversified portfolios.8
This proposal asks the Board to set a Company compensation policy of paying a living wage to prevent contributing to inequality and racial/gender disparity. Target could achieve this Proposal’s objective by securing Living Wage for US Employer certification.9 Additionally, MIT has an online living wage calculator, or Target can work within frameworks promulgated by organizations such as IDH Sustainable Trade Initiative or The Living Wage Network. Target should use such frameworks in a manner that allows shareholders to gauge compliance and progress, while providing Target with discretion as to how to achieve the living-wage goal.
Please vote for: Set compensation policy that optimizes portfolio value for Company shareholders –
Proposal 4*
1 https://theshareholdercommons.com/case-studies/labor-and-inequality-case-study/
2 https://corporate.target.com/press/release/2022/02/target-to-set-new-starting-wage-range-and-expand-a
3 https://livingwage.mit.edu/articles/103-new-data-posted-2023-living-wage-calculator
4 https://www.acorns.com/learn/earning/target-minimum-wage- increase/#:~:text=Workers%20at%20Target%20could%20start,competitive%20markets%20like%20New%20York.
5 https://corporate.walmart.com/purpose/belonging-diversity-equity-inclusion/belonging-diversity-equity-and- inclusion-report
6 https://tacklinginequality.org/files/introduction.pdf
7 https://ir.citi.com/%2FPRxPvgNWu319AU1ajGf%2BsKbjJjBJSaTOSdw2DF4xynPwFB8a2jV1FaA3Idy7vY59bOtN2lxVQ M=
8 https://www.epi.org/publication/secular-stagnation/
9 https://livingwageforus.org/becoming-certified/