How wage caps can be a powerful tool to limit unfair extraction
Dec 20, 2024
How wage caps can be a powerful tool to limit unfair extraction and remove economic incentives that don't align with a company's purpose.
We have set our own wage caps and discuss this in our eBook, Setting Limits to Growth. But since we're still a small business, far from profitable, let’s look at a larger example: Dr. Bronner.
A quick disclaimer: this isn’t a promotion or a review of Dr. Bronner as a Post Growth business—we’re focusing solely on their approach to wage caps.
A quick introduction
Dr. Bronner is a US-based, 150-year-old family-owned business that produces soap and other household items. In 2023, they had a total revenue of nearly $200 Million. They have 325 employees in the US.
Wage cap
Unlike many other companies of that size, Dr. Bronner has a 5-to-1 salary cap.
This means that the highest-paid employee's salary is capped at five times more than the lowest-paid employee's.
For perspective, the average ratio in the US is 272:1. In Germany, it's 136:1. And for Starbucks? It's around 10,000 times the median worker’s wage (according to a Reuters article that includes the full compensation package).
Clearly, a 5-to-1 cap is more than reasonable.
Where Does the Money Go Instead?
By capping salaries and bonuses for executives, Dr. Bronner redirects funds toward meaningful benefits, like:
- Childcare support
- Comprehensive health insurance
- Daily vegan meals for all employees
And it goes beyond its direct workforce. They support:
- Agroforestry in Ghana
- Refugee assistance
- Sustainable farming practices worldwide
And in 2023, they donated over $5.6 million to activist and charitable causes.
For a deeper dive into all their activities, you can check out their full report: Dr. Bronner’s All-One Report 2024