ST. PAUL, Minn. (July 31, 2015) — In October of last year, a 30-year-old Wells Fargo employee in Portland, Oregon made national headlines after sending a provocative email to Wells Fargo CEO John Stumpf. In his email, which was also copied to approximately 200,000 Wells Fargo employees, Tyrel Oates addresses the increasing income inequality in America and intimates that Wells Fargo is in a unique position to reduce this mounting calamity by reinvesting in its own employees.
In writing to Stumpf, Oates asserts that Wells Fargo can demonstrate uncommon leadership and vision by “showing other large corporations that it is very possible to maintain a profitable company that not only looks out for its consumers and shareholders, but its employees as well.”
Oates’ proposal was for Wells Fargo to take $3 billion dollars of its 2014 second-quarter revenue of more than $21 billion and distribute it equally among Wells Fargo’s estimated 300,000 employees worldwide. This would equate to a $10,000 annual raise for each employee or an hourly pay increase of just over $4.70 per hour.
Oates further points out to Stumpf that this $3 billion is just a fraction of what the bank nets in a year and suggests that the public relations boost will help to establish Wells Fargo, already one of the most profitable companies in the nation, as one of the most admired as well.
As you might expect, Oates received a mass of approving responses from working people all over the country, including his fellow Wells Fargo employees, several thousand of whom added their names to a petition supporting his proposal. And predictably, his sentiments also inspired insults and name-calling with many contending that he possessed an infantile understanding of basic economics.
Wells Fargo’s official response was that the company already provides competitive pay along with a robust benefits package and the opportunity for career advancement.
For his part, Oates, who maintained he was never afraid of losing his job, was not reprimanded for his email, which quickly garnered the attention of The Wall Street Journal, The Washington Post, The Oregonian, The Charlotte Observer, Business Insider, and CNN among other major media outlets.
Oates made the news again recently when he resigned from Wells Fargo to pursue a career in another field. Just as he was last year when he sent his email, Oates was both lauded and lampooned by pundits and the public. Yet regardless of what one might think of his proposal, Oates was able to bring increased attention to and further elevate the discussion about an issue that some analysts believe threatens the very core of American democracy.
Since his email went viral nearly nine months ago, an emergent social movement to increase the minimum wage has gained a great deal of momentum. In just the last few months, for instance, a number of Fortune 500 companies, including Target, Wal Mart, TJX and McDonalds, have all raised their minimum wages for employees. What’s more is that cities such as San Francisco, Los Angeles, Seattle and Portland either have or are in the process of raising their minimum wage to $15 per hour.
While this is certainly a start, it is far from the sea change required to begin the reversal of rampant income inequality. Dr. Peter Edelman, poverty expert and author of So Rich, So Poor: Why it’s so Hard to End Poverty in America, notes that when adjusted for inflation the wages of American workers are near the lowest since the War on Poverty began more than 50 years ago. Moreover, a story from The New York Times reports that in 2012, the top 10 percent of U.S. workers pocketed well over one half of America’s total income, which is “the highest proportion recorded in a century of government record keeping.”
It goes without saying that the increasing income gap likewise fuels wealth inequality in America. According to Oxfam International, the richest one percent of all Americans have amassed approximately 95 percent of all wealth generated since 2009. A new study by economists Thomas Piketty and Gabriel Zucman demonstrates that the wealth gap has consistently widened each year since the early part of the 1980s.
Interestingly enough, this report also details a significant gap between the wealthiest 0.1 percent of Americans and the remainder of the top 1.0 percent. Of course, that doesn’t mean much to the rest of the 99 percent, or in particular the bottom 50 percent of Americans, many of whom live in poverty or at risk of being relegated to the ranks of the poor should the income and wealth gaps continue their unrestrained growth.
As this inequality continues to escalate, more and more Americans will be squeezed out of the working and middle classes as more and more wealth is concentrated at the top. The current push to increase the minimum wage is a good beginning. Still, these efforts must strive to ensure that every working American has the ability to earn a living wage. Should that not be a right?