An immigrant himself, Chobani founder and CEO Hamdi Ulukaya knows the struggles of establishing oneself in a new country, including finding a job that pays a living wage. Such fears felt by many U.S. workers are even more exacerbated as the fate of a second stimulus bill is still in limbo as of press time.
Since Ulukaya, a Turkish-Kurdish native, started the company in an abandoned Kraft factory in upstate South Edmeston, New York, in 2005, Chobani has hooked the country on Greek yogurt. The company has grown to 2,000 employees and makes about $1.5 billion annually. Ulukaya, though, felt that many of his employees — especially those on factory floors — were not directly benefiting from the company’s exploding success. “Society moves on the shoulders of people like that,” Ulukaya told Fortune.
To help fold those workers into the Chobani success story, the company has pledged to increase the starting hourly wage to at least $15 an hour, which is more than double the national minimum wage of $7.25. About 70 percent of Chobani employees are paid hourly. Workers in manufacturing plants in New York and Twin Falls, Idaho, will now earn an average hourly rate of about $19. The increases are expected to take effect in the first quarter of 2021.
Hourly employees in New York City, including those who work at the Chobani Café, will see their minimum hourly rate climb to $18, due to the area's high cost of living.
Employee hours, benefits and other programs will not be tapped to cover the increases. “This kind of spending is not an expense,” Ulukaya explained to Beth Kowitt of Fortune. “These are the best investments you can do for your company.”
The increases reflect Chobani’s commitment to employee support, which includes a parental leave policy and generous fertility treatment benefits. Since the pandemic began, the company has been providing bonuses and increased protections for frontline workers and is continuing to provide a subsidy for childcare, since many childcare facilities remain closed. The company has also strived to take on food insecurity with various initiatives.
Almost 30 percent of Chobani’s workforce are refugees, representing about 20 nationalities. When Ulukaya first started the company, he worked alongside employees in the factory to learn about their jobs and the business.
The wage bumps put Chobani’s workers in a better position than most nationwide. The federal minimum wage has been stagnant for more than 10 years — the longest period without a boost in U.S. history.
Nationwide, there has been some progress toward raising the minimum wage. Democratic presidential candidate Joe Biden has pledged to increase the federal minimum wage to $15 an hour. States can also implement minimum wages higher than the federal rate. If the U.S. minimum wage were raised to $15 an hour by 2025, the Congressional Budget Office (CBO) estimated that 17 million workers would earn more and as many as 1.3 million Americans could be hoisted above the poverty line.
But the CBO also warned that a higher minimum wage could lead to layoffs, lower business income and higher product prices. Undaunted, seven states have pledged to raise the minimum wage to at least $15 in the next two to three years. Major companies that have raised their hourly minimum wage to $15 or more include Target, Bank of America, JPMorgan Chase and Amazon.
Chobani began talking about wage increases last year, but the coronavirus pandemic has put a sharper focus on worker conditions. The pandemic “is an opportunity to see things a lot deeper and say, ‘These are fundamentals that need to change,’” Ulukaya told Fortune. “We do not have to wait for the government to act on it. We, as businesses and CEOs and brands, must do our responsibility, and this is the time to do it.”
Image credit: Chobani/Facebook