How wage caps can be a powerful tool to limit unfair extraction

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