compensation

Posted: July 18, 2015
By: Clay Cerny

 

Why do Germans tend to carry more cash in their pockets than people in the U.S.? This sounds like a weird question, but I think it says a lot about workers’ rights. An article from USA Today (via the Chicago Sun-Times) reports that the average German saves more than Americans, and they use credit cards less. The average German carries $123 in cash compared to $74 for Americans. Where 53% of Americans have credit cards only 32% of Germans use them. The article cites history as the cause of this difference: “Germany’s cash obsession is deeply rooted in the scare from its economic crisis between World War I and II.” Later, it claims, “After losing WWII and suffering massive destruction, Germans believed frugality and hard work would help them recover.”

I do not dispute these claims. But I think there maybe another important reason that Germans can pay cash and keep more of it in their pockets: They are better paid and have more rights as employees. According to a 2011 study by the Bureau of Labor Statistics, German workers earned $47.38 dollars per hour compared to $35.33 for the average American worker. German Workers also receive more vacation time (six week on the average) and more of a safety net during times of high unemployment. While historical factors may affect how Germans think about cash, they also have more of it and a better sense of job security. I think Americans also believe in hard work and frugality, but too many of them aren’t making enough money. America needs a raise.

 

Posted: February 23, 2015
By: Clay Cerny

 

As the job market gets better, employers will find it harder to get the talent they want, which means it’s a great time to negotiate for a better salary or other compensation. The website Payscale.com has some great resources that will help you negotiate. If you’re involved in a job search or in a position where you will have to negotiate salary, take some time and consider the great advice given by the experts on this page.

Posted: October 17, 2014
By: Clay Cerny

 

I often ask clients to give me 5-10 posts for the kind of jobs they will apply for. I use these lists to determine requirements, key words, and related information. Over the past few months, I’ve noticed something that I haven’t seen for a while. Employers are highlighting compensation and benefits.

Below is an example I copied from a job post a client gave me earlier this week:

“The starting salary starts at $65,000 based on your skills, education and experience, but our client has indicated they will pay more for candidates with exceptional background.

Full benefits include medical, dental, Rx, STD, LTD, life, AD&D, vision, a matching 401k plan, credit union, PTO, holidays, vacation, free parking, fitness center, great discount on all merchandise and more”

What does this mean? It probably means that employers are finding it harder to get good employees, which also means that they’re more likely to offer bigger raises to retain employees they have and want to keep. If you’re unhappy at your current job or if it’s been a while since your last raise, this might be a good time to update your resume and start a new job search.

Posted: September 12, 2014
By: Clay Cerny

 

Amy Eddings of Ring of Fire reports on the amazing scope of wage theft. Citing a study by the Economic Policy Institute, Eddings writes that the total amount workers lose through wage theft could be 2-3 times greater than criminal theft as measured by the FBI. Federal and state governments are making efforts to recover lost wages, but those efforts are understaffed. This story reminds us that workers are not just fighting low wages and poor working conditions. Some employers are stealing their employees’ labor. Shouldn’t they be treated like any other thief?

Posted: August 13, 2014
By: Clay Cerny

 

A friend sent me an article from HR Magazine, which is produced by the Society for Human Resource Management (SHRM). The author, Jennifer Schramm, cites studies that consider the impact of pay inequality on worker moral. Where job security was recently the leading driver of job satisfaction, it is now compensation. Schramm notes that CEO-worker compensation has shifted from 20-1 in 1965 to 265-1 in 2013. What are companies doing to address this problem? 42% are offering “financial literacy training” and 25% are offering budget training.

These measures would be great if workers who are often living from paycheck to paycheck had anything to save or budget. America needs a raise. It’s not just an issue of low wage workers. Middle class and even some executives have been receiving small/no raises for the last decade. The drum beats for changing are getting louder.

Posted: August 12, 2014
By: Clay Cerny

 

When we’re terminated or laid off from a position, we often feel anger or shame. That’s natural. However, those feelings can lead us to do things we will later regret. If an employer offers any kind of incentive, read the document carefully and know what you are signing.

One of my clients works in a specialized industry where there are few employers and limited opportunities to work. When her employer let he go, he offered her a month’s salary and a month of paid healthcare. All he asked is that she sign a piece of paper. Luckily, she read the agreement, which included a non-compete clause that would have made it impossible for her to work for any company in metro Chicago. My client weighed her options and walked away from the offer.

If you are in this position, read the document carefully. If you don’t understand it, inform your employer that you want to have time to review it. If the employer pressures you to sign it immediately, there is probably something in that document that he does not want you to understand. Have the document reviewed by a lawyer who understands employment law. Don’t let yourself be bullied into signing something that can hurt your ability to get a job. Know what you are signing

Posted: April 27, 2014
By: Clay Cerny

Clearly Donald Sterling, owner of the Los Angeles Clippers, is a racist fool. He’s also an ungrateful employer, a bad boss. During a taped exchange with his girlfriend (I’d now assume former girlfriend), Sterling says,

“You just, do I know? I support them and give them food, and clothes, and cars, and houses. Who gives it to them? Does someone else give it to them?”

Sterling shows no sense that the players who have worked for him over the decades that he’s owned his team have contributed to his wealth. Instead, he uses words like support and give, almost as if he should not have to pay the employees that bring fans to the arena. It’s not pay or compensation. He describes his employees as receiving gifts. Maybe he thinks he’s Santa Claus.

Even beyond his racism, Donald Sterling is an ungrateful jerk.

Posted: April 19, 2014
By: Clay Cerny

 

As I’ve written before, I support paying college athletes in sports that produce multimillion dollar revenues for the schools and the NCAA. Today’s Chicago Sun-Times features an editorial by Salim Furth of the Heritage Foundation that also supports paying student-athletes. However, Furth suggests a different approach that would destroy college sports, a free market approach to paying players, a business model professional sports leagues no longer follow.

Furth begins his essay by affirming that a certain type of college athlete should be paid: “Division I football players are professionals. They are given room, board, and health care in exchange for their time, and served by tutors, coaches, and trainers. They are paid only if they work.” He goes on to say that under the current model “college football players earn little for their work, because the employers collude through the NCAA to cap wages.” Here I agree and disagree. I would say student athletes who receive scholarships in all Division I sports are compensated. Whether we call it pay or compensation, there is an exchange similar to employment. The second quibble I would have with Furth is that the NCAA colludes with the colleges to “cap wages.” No, the NCAA controls the student athlete’s ability to earn any income. Moreover, one of the players’ biggest complaints about the current system is that it does not cover injuries that often impact their lives long after their college careers are done.

Where Furth and I strongly disagree, however, is over the issue of how students should be compensated. Under a union model, compensation would be negotiated for groups, not individuals. Furth advocates a system where players can “reap the rewards of their own talents and labor.” Each player would bargain with a university and be paid as an individual. Professional sports leagues found two problems with this approach in the era of free agency. First, player salaries rose at a pace that threatened the survival of teams and leagues. Every sports has introduced some mechanism to control the rise of player salaries. In a related concern, every league wants competition. If the same team wins again and again, interest in a sport wanes. Large market teams often dominant. Without caps, luxury taxes, and drafts for new players, only teams that generate the most revenue would be competitive.

Furth advocates a free market approach that sounds good on paper. Every person should be able to earn a wage that is commensurate to his or her skill and contribution to an employer’s success. This model has been tested in professional sports, and it has failed. It has also been tested in professions like law, where the ABA and law schools limit the pool of new applicants through admissions policies and standards for passing the bar exam.

The free market that Furth calls for creates a society of a few winners and many losers. Under the current system in college football, many of the same teams dominant year after year. Under Furth’s system, the teams that can pay the players most would be competitive year after year. A healthy sports league – and a healthy economy – needs balance, which can only come from some kind of regulation. I’m for compensating college athletes. But it must be done in a model that works for the players, schools, and the often ignored fans. The NCAA – or an organization like it – is needed to keep the system fair and honest. We can’t have a game without rules and referees.

Posted: April 16, 2014
By: Clay Cerny

On Sunday, April 13, The Chicago Tribune published a long article about a new trend that is taking money out of working people’s pockets, especially those who can least afford it. Rather than print paychecks, companies are issuing their employees payroll bank cards. Employers do this to save the cost of printing, which sounds like efficiency. The problem is that the employee now is paying fees that range from $1.00 to $13.00. Too often, the people holding these bad cards are low wage workers. If the employee lets his balance run below $20, she has to wait to access funds because ATM machines only dispense $20 bills. Another employee noted that the card only has his employer’s name on it, so it cannot be used as a debit card. Does this sound like a convenience for the employee? No. But it sounds like a great deal for the employer. What else should we expect in the Second Gilded Age?

Posted: April 5, 2014
By: Clay Cerny

Bryce Covert of Think Progress reports that Americans are failing to do something important: Take paid vacations. 15% take none of the time coming to them – 75% take only part of it. That’s a lot of compensation that is going back into the employers’ pockets. Covert adds that 60% of those surveyed say that they often do some work while on vacation. Paid time off is a type of compensation. When we don’t take that time or when we work while on vacation, it’s the same as working for free. Many of my friends and clients have told me that they don’t take time coming to them or work while on vacation because their companies are understaffed. “There is no else to do the work.” What that means is that it pays for companies to stay understaffed, which keeps them from paying for time off. It’s not quite wage theft, but it’s close.