The American workplace is in crisis. In 2024, Gallup’s State of the Global Workplace Report quantified what everyone already knew: 33 percent of U.S. workers are “engaged,” 51 percent are “not engaged,” and 16 percent are “actively disengaged.” Looking only at those numbers, you’d be forgiven for wondering whether there was some sort of collective, corporate effort to make Americans hate what they do for a living. As Charlie Munger famously said, “Show me the incentives, and I’ll show you the outcome.”
This is a wake-up call to rethink how workplace incentives and cultures drive success.
High-Quality Jobs Drive Profits & Economic Growth
Across centuries, political divides and academic disciplines, one idea remains clear: quality jobs are the foundation of thriving markets, strong economies and healthy societies. Adam Smith, the father of modern capitalism, emphasized in The Theory of Moral Sentiments that markets require moral foundations. More recently, MIT professor Zeynep Ton reinforced this principle, showing that companies with strong job quality strategies see 30-40 percent lower turnover, 20-30 percent higher productivity and 15 to 25 percent higher customer satisfaction. Meanwhile, in What Happened to Capitalism?, Oren Cass points to a stark reality: over the past 50 years, corporate profits have soared 185 percent, while wages have grown just 1 percent.
What Is a ‘Quality Job’?
A “quality job” encompasses several key attributes that collectively enhance the well-being and satisfaction of employees. These positions offer fair compensation, ensuring that workers receive wages commensurate with their skills and experience. Beyond monetary rewards, quality jobs provide comprehensive benefits packages, including health insurance and retirement plans, which contribute to long-term financial security. Such roles also offer opportunities for professional growth through training and development programs, enabling employees to advance their careers. Moreover, quality jobs foster a positive work environment characterized by respect, inclusivity and a healthy work-life balance, ensuring employees feel valued and supported. Collectively, these elements improve individual job satisfaction and enhance overall productivity and organizational commitment.
Leading Companies Turn Employee Investment Into Competitive Advantage
The increasingly stark contrast between profits and wages has led to growing calls for change. In 2019, the Business Roundtable made history when 181 CEOs renounced shareholder primacy and embraced stakeholder capitalism. They committed to investing in employees through fair compensation, benefits, training and workplace dignity. Johnson & Johnson pioneered this stakeholder approach with their 1943 credo, explicitly recognizing responsibilities to employees before shareholders as a precondition to generating sustainable profits.
For many, the results speak for themselves: Costco (COST) pays its workers an average of $25 per hour with 13 percent turnover versus the industry’s 60 percent. Southwest Airlines introduced its profit-sharing program in 1974 and boasts a 4 percent employee turnover rate. Nucor Steel maintains a no-layoffs policy through downturns and shares profits directly with workers; in 2023, this translated to almost $1 billion in profit sharing for the company’s nearly 31,000 employees.
Others offer cautionary tales. In 2019, McDonald’s announced it would no longer lobby against raising workers’ pay, indicating previous resistance to wage increases. Despite this shift, the company has faced challenges in attracting workers, leading to wage increases in 2021 to address a “challenging hiring environment.” And though Amazon promised better worker treatment, union battles, high injury rates and reports of worker surveillance were just a few of the headlines that made issues for Jeff Bezos last year. Of course, Amazon (AMZN) and McDonald’s remain highly successful, profitable and growing companies. But imagine how much more impactful they could be—both economically and reputationally—if they fully embraced the commitments they made in 2019. Their influence is undeniable; the question is whether they’ll use it to set a new standard or simply maintain the status quo.
Investing in quality jobs isn’t just an honorable choice—it’s a financial one. Higher wages, predictable schedules and training programs reduce turnover, cut recruitment costs and boost output. Southwest Airlines, Nucor and Costco aren’t simply doing the right thing; they’re outcompeting their peers because of it.
Patriotic Capitalism: A Workforce-First Approach to Economic Strength
I coined the term “Patriotic Capitalism” to refer to the notion of an economic and investment framework that prioritizes country, democracy and the common good as the way forward for national prosperity. This framework aligns with the vision of an economy where people can contribute productively to their communities, support their families and raise children prepared to do the same. Beyond ethics, it’s essential for national competitiveness in a world where human capital determines success.
To make quality jobs the norm rather than the exception, we need specific policy changes:
- ESOP Incentives: Expand employee stock ownership plan (ESOP) incentives through enhanced tax benefits for broad-based employee ownership. (Give workers ownership, aligning their interests with the company’s success.)
- Capitalizing Human Capital Investments: Reform accounting standards to allow capitalization of human capital investments. (Allow businesses to treat workforce development as a long-term asset, not a short-term cost.)
- Tax Incentives for High Engagement: Create tax incentives for companies with high worker engagement scores and low turnover. (Reward companies that invest in workplace culture instead of relying on high-turnover, low-wage models.)
- Strengthen Workplace Protections: Support labor market reforms that promote worker dignity and productive investment (Encourage policies that ensure fair wages, stable schedules, and career development, creating a more skilled and secure workforce.)
In addition to policy changes, attitude shifts across C-suites and boards are necessary. Superior operational design and a focus on human capital investment can generate enhanced and sustainable financial returns. Research conducted by a global private equity firm found that companies whose senior management had the highest levels of empathy generated the highest financial returns. Authentic empathy engages workers; engaged workers drive innovation, productivity and profitability.
Why Employee-Centric Business Models Outperform the Competition
Quality jobs go beyond fair pay—they lay the foundation for innovation and productive investment. The framework is straightforward, comprising common-sense elements like broad-based employee ownership, fair compensation, predictable schedules and meaningful training.
The evidence is clear: quality jobs strengthen companies, build resilient communities and enhance national competitiveness. Businesses that embrace this approach aren’t just doing good; they’re gaining a sustainable competitive edge.
The choice isn’t between profitability and good jobs—that’s a false dichotomy that both Adam Smith and modern research debunk. Yes, raising wages and offering ownership requires an upfront investment—but high turnover, low morale and worker disengagement already cost U.S. businesses billions annually. Paying employees better isn’t charity; it’s a calculated business strategy that leads to higher productivity, stronger brand loyalty, and better long-term returns. Quality jobs are the smartest investment a company can make in its future. And in today’s global economy, they might be the smartest investment America can make in its future, too.
