The fight to close the growing wealth gap is “true social change” that has to begin in the private sector by raising worker wages, according to billionaire hedge fund manager Paul Tudor Jones.
According to Jones, with the private economy total economic output at $20 trillion — compared to the federal government’s $4.5 trillion in spending and private philanthropy’s $400 billion — it makes the private sector the best place to tackle inequality.
In 2013, along with a handful of others, the CIO of Tudor Investment Corp. and co-founder of Robin Hood created JUST Capital, a non-profit with a mission of promoting economic justice. Every year, the organization polls the American public about what matters to them in promoting corporate justice.
And each year, the top response is, “Do you pay a fair living wage? Do you pay someone a wage that allows them with a partner to raise a child and not struggle, but thrive, not strive, but thrive?” Jones told Yahoo Finance in a recent interview.
“So I think we’ve labored under this. I think it’s a false god and false belief that we have to pay low wages in order for companies to survive and to prosper,” Jones added.
According to the investor, raising the wage level for workers is could make it so “the whole pie gets bigger, and that we have the same level of profitability for companies, but we have a much stronger and more productive economy than what we have now.”
Right now, across 20 million workers for the 1,000 largest companies in the U.S., half of those employees do not make an income, combined with their partner working part-time, to provide a living wage for a family of three.
“Again, I don’t think that’s really what the American Dream’s about,” Jones added.
JUST Capital launched a Worker Financial Wellness Initiative that encourages companies to audit how many employees live below a living wage. It then allocate revenues toward those workers before rewarding shareholders.
Otherwise, it’s taxpayers who provide the subsidies, while companies pay low wages to maximize profitability at the benefit of shareholders.