Would you be more inclined to patronize a business that’s committed to fighting wage inequality, than one that isn’t?

Peter MacLeod is investing a lot of energy in the hope your answer is “yes.” The Toronto-based consultant and entrepreneur has just started a new foundation that offers certification to companies that are willing to guarantee the highest paid employees at the company make no more than eight times what the lowest paid employees make.

“Ethical consumerism is a massive trend,” says MacLeod. “Look at Fair Trade coffee. First it was just available in those scruffy little coffee shops on the corner, then Starbucks gets involved and the game changes.”

'If we have forest-friendly paper, and dolphin-friendly tuna, so why isn’t there a mark for wage-responsible businesses?'-  Peter MacLeod

There’s no question Income inequality has become a social hot-button. And nothing lights it up like massive CEO salaries. The Occupy Movement’s slogan of “We are the 99 per cent” was a reference to income disparity, an attack on the concentration of wealth found among the top one percent of income earners.  

The U.S. Securities Exchange Commission has just tabled a proposal that would require all U.S. public companies to disclose the gap between what their CEOs make versus the rank-and-file staff. The top dog at most major American corporations earns 354 times that of the average worker. .  

(Canada gets a “C” grade on wage equality from the Conference Board of Canada, ranking 12th out of 17 “peer” countries, ahead of the U.S. and the U.K., and far behind Denmark and Norway.)

peter-macleod-wagemark

Peter MacLeod is hoping Wagemark certification will attract consumers who like the idea that the pay ratio between the highest paid and lowest paid people in a company is 8:1. (CBC)

But is it an issue that will drive consumer behaviour?

MacLeod believes it will. “We like to say 'If we have forest-friendly paper, and dolphin-friendly tuna, so why isn’t there a mark for wage-responsible businesses?'” he asks.

Business-boosting reasons for Wagemark

I spoke to two small business owners who have paid $100 to sign up for the Wagemark initiative, and although neither one has plans to use the certification seal to woo customers, each offered some business-boosting reasons for why they’ve joined.

Mike Clark is using it to attract and retain great employees. He runs the thriving Bellwoods Brewery in Toronto, a micro-brewery that includes a restaurant and retail outlet. The company has won five different Canadian brewing awards, is attracting international press, and getting orders from the U.S.

Bellwoods-brewery

Toronto's Bellwoods Brewery is one of the small businesses that went for Wagemark certification. (Bellwoods Brewery)

“My partner Luke and I work alongside the people that help us manufacture,” he says. “We want to make sure they’re happy.”

Clark feels the eight-to-one top-to-bottom salary ratio is perfectly reasonable, even as he looks ahead to growing profits. Bellwoods is considering a second manufacturing facility to fill the demand it can’t meet right now.

“I can’t imagine a scenario in five years, where Luke and I are doing very well personally and we’re working there with people earning minimum wage,” he says. He’s convinced the Wagemark certification will mean he has a better chance to hang on to good people, and attract the best as needed.

Margie Zeidler is in the commercial real estate business. She runs Urbanspace Property Group, which owns a historic building in downtown Toronto, and manages another. 

Zeidler has already gone through a lengthy process to be designated a “B-corp”, which is short for Benefit Corporation.  

Happy cleaners means happy tenants

That’s an even more comprehensive way to label your company as ethical, and as a benefit to society. Applicants have to meet rigorous standards of social and environmental performance, along with accountability, and transparency.

“It’s a very involved process,” says Zeidler of the B-Corp application. “It took us eight to 10 hours to get through answering all the questions, plus you need to have background documentation. For anyone running a small business it’s a huge investment of time.  But for Wagemark you can just sit down and sign up easily.”

Like Mark Clark at Bellwoods, Zeidler says the salary limit won’t cramp her style, and she likewise believes happy employees are good for business, since they make customers happy.

“I think the cleaners are the most important people, a clean space is what makes the tenants happy.  Plus they’re smiling at the tenants,” she says. “Nobody wants to go to work and see a cleaner that’s exhausted, or living a difficult life. Everyone feels badly about that.”  

Founder MacLeod predicts that it will indeed be mostly small businesses that are attracted to the Wagemark initiative. The bigger the company, the bigger the salaries at the top, and the less likelihood those individuals will volunteer to downsize their salaries.

Will it catch on? My guess is that if it does, it won’t be quickly. The Wagemark Foundation isn’t exactly the type of venture that attracts big corporate sponsorship.  Widespread advertising is out of the question.  

Even so, word of mouth can be effective, and the Occupy culture is indeed hot-wired to social media.  I’d be happy to be proven wrong in my guess. I’m noting by agenda right now, to check in with Peter MacLeod in a year’s time.