USA Today had some good news: benefits are on the rise. Companies offering paid maternity leave have increased over the last year from 12% to 21%. Over the same period, paid sick leave has increased from 33% to 42%. Family leave is up from 19% to 24%. The article even cited some companies that are offering “unlimited vacation.”
This all sounds good. However, as I’ve noted in recent posts, income is not rising in a significant way for most Americans. Payscale offers an informative chart that demonstrates how little pay in the U.S. has changed from 2007 to the Present. Benefits are good only when they are needed. Wage increases give people more control over their lives, more of a feeling of security.
One of the blogs I read daily is written by a real education reformer, Diane Ravitch. Today she cited an article in Huffington Post that describes a teacher shortage in Kansas and what caused it. Many conservatives and pseudo-education reformers (Michelle Rhee, Campbell Brown, Secretary Duncan) argue that education promote choice through charter schools. They point to unions as a cause of poor education outcomes.
What’s happening in Kansas tells a different story. Teacher pay in the state is low, hours are longer, and the legislature has made it easier to fire teachers. The result is exactly what any sane person would expect. Teachers are retiring as soon as they can. Others are changing careers, and college students are choosing majors other than Education. Schools will be forced to rely on substitutes to cover classes.
In the past, I’ve asked who will want to teach if the pay is low, there is no union protection, and working conditions are poor. Market forces work in career choices just as they do in purchasing. If teaching is a difficult and disrespected profession, fewer and fewer people will pursue careers as teachers. Kansas proves this point. I expect we’ll hear similar stories from other states very soon.
One of my clients is currently an Assistant Manager. He has been very successful in his field. Logically, his next move should be to pursue a position as a General Manager. Instead, he is going into a position in route sales and delivery. When I asked why he would do this, his reasons were all great and thoughtful. First, pay is similar for both positions. Second, he'll work fewer days and hours, which means his hourly pay will be higher. Most importantly, he'll be able to spend more time with his family, which is his priority at this time.
This story illustrates a major problem in career management: your money or your life. For many professionals, especially those pursuing careers that pay well, the sacrifice is personal time. One way to avoid this trap is to keep looking for companies that respect their employees as people. During second or third interviews, it's acceptable to ask what a typical day or week is like. You could also ask about the company's policies that promote work-life balance. Such jobs will be hard to find. Productivity has gone up and up over the last decade because too many companies are not concerned with anything except the bottom line.
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.
Walmart announced that it will raise its minimum hourly wage to $9 and increase that wage to $10 next year. It’s great that the company has made this move on its own. However, will this raise really change the lives of its workers? A person making $9 an hour will still be earning about $20,000 a year – if she is working full time. If the worker is a parent, she will certainly still need public aid for food and housing. In essence, working people and the middle class will continue to be underwriting Walmart’s work force. We need to establish a living wage and commit ourselves as citizens to paying a little extra so we can all live decent lives.
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.
Writing in Daily Kos, Laura Clawson reports on Equal Pay Day, the date on which the average woman’s pay catches up to the average man’s pay from 2013. As some like to point out, many women work in lower paying jobs. However, many women performing the same jobs as men are paid less. As Clawson asks, why are women stuck in these jobs? This discrimination is one more example of why and how our economy has stalled. Job numbers are important. Wages and wage disparity is a much more significant problem, especially in an economy that depends on consumer spending.
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.
A client called about his performance review. At first, I thought he was just getting a raw deal from his boss, but it's much worse than that. This client is in sales. His employer changed the compensation model about six months ago and moved from a base salary to a salary draw, which means that an employee has to repay salary if she does not meet a certain performance target. I've heard of draws in the past, but never with the employer threatening to use it in this manner (claiming the employee owes all of the pay he has received). I want to research this topic more in the coming weeks and update this post. For now, my advice is to proceed very carefully before working with any company using this system of compensation.