An unlikely voice calls for $25 minimum wage – a former healthcare CEO from Stamford
John Driscoll, of Stamford, was CEO of CareCentrix and head of U.S. health care for Walgreens. His new book, "Pay the People!" argues that higher salaries equal more profitability – not less.
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A surprising voice is calling for a dramatic hike in the minimum wage range – a former healthcare CEO from Connecticut.
John Driscoll, who transformed Stamford-based CareCentrix into a multibillion-dollar home healthcare company before becoming Walgreens head of U.S. healthcare, argues in a new book that higher wages will actually make companies more profitable.
But critics argue that it will push more companies to replace humans with automation, especially teens and lower-skilled workers.
“PAY THE PEOPLE!”
Driscoll’s new book, “Pay the People!”, co-authored with former BlackRock executive Morris Pearl, defies the conventional wisdom and argues that better salaries equal bigger profits.
“We lowered turnover, we increased the number of claims we paid, the number of calls we picked up, and we actually changed the culture of the organization,” Driscoll said. “I had customer service associates in Hartford who were sleeping in their cars – coming to work, doing a great job – and, you know, that’s unacceptable.”
Driscoll, who chairs the UConn Health Board of Directors, supports legislation from Sens. Chris Murphy and Richard Blumenthal to gradually triple the federal minimum wage from $7.25 an hour to $25 by 2032. Smaller employers would get an extra eight years.
“When you put more money in the pockets of workers, that money goes right back into the economy,” Murphy said on June 25. “There is no reason that somebody should go to work full-time in this country and not be able to pay their bills.”
Connecticut’s minimum wage is currently $16.94 an hour and is slated to rise to $17.48 on Jan. 1.
The idea is catching on. Last week, Amazon raised its minimum wage to $20 per hour.
JOB KILLER?
Could a $25 minimum wage backfire?
The research is mixed.
Business groups said it will mean fewer workers and more automation.
“Our state and federal lawmakers should be focusing on meaningful policies that address the key factors driving Connecticut’s affordability crisis, including the growing cost of healthcare, housing, and energy,” the Connecticut Business and Industry Association said in a statement. “Let’s talk instead about implementing solutions that will address the spiraling cost of healthcare, energy, and housing.”
When Seattle dramatically raised its wage in 2014, a University of Washington study found that wages rose 3.2% – but workers’ hours dropped by 6.9%. Younger, inexperienced employees were impacted the most.
Some restaurants also raised prices, but 99% of them remained open 18 months into the new law.
A 2021 review from the National Bureau of Economic Research found similar results.
“There is strong and consistent evidence of negative employment effects for teens, young adults, the less-educated and directly-affected (low-wage) workers,” researchers concluded.
But studies in other cities have shown minimal employment impacts.
“If you look at the Seattle data carefully, you'll see there was a slight hit to restaurant jobs, but in general, employment continued to grow,” Driscoll said.
