What does your wage say?
Music by: Terry Breen
The Message You Send
As an employer, when creating a job, you get to assign that position a wage. This seems fairly straightforward and there are math equations that can be done to find how much value a position provides the company. This is how it has worked for decades, and for the most part, continues in the same fashion today. This works incredibly well until you realize that you are dealing with people, not machines. Each person has his or her own life full of goals and dreams. The wage you offer sends a message to your employees, unfortunately it is left to the employee to interpret that message.
The Reality of Low Wages
Many are quick to respond saying something along the lines of, “Well, you can’t expect to make much while flipping burgers.” While we consider this, let’s also consider this hypothetical. It’s a Tuesday around 1 o’clock in the afternoon. You want a burger from a drive-thru. Kids are all in school at this time, so who is going to work? An adult, that’s right. And that adult has the same inalienable rights that anyone else does. Sure, you can argue that he should aspire to do more and thus make more. But where does that leave you?
Let’s continue with our hypothetical fast-food worker. We will say he makes fifteen dollars per hour and works forty hours per week, just about $30,000 per year. An average one-bedroom apartment in the United States is around $1,700 a month. Most landlords require proof of income equal to three times the monthly rent meaning the household income needs to be a minimum of $61,200 per year 1, and that’s just to qualify to live there. So far, the wage we offer is telling our employees that we think they should get a roommate to split that one bedroom, or perhaps live out of your car.
Assuming our employee found a place to live, he then must have the necessities of living. Food and clothing at the very least. Our fifteen an hour won’t get him too far after rent and utilities. The average monthly grocery bill is around $300 which is still affordable assuming he doesn’t have many other expenditures. But many of us do: student loans, car payments, credit card debt, and so on. These are all common bills that many of us have. Do we still deserve to have food on the table? Maybe what our wage is telling our employees is that we think that he should rely on food stamps and government assistance.
What if our employee has dreams of getting married and starting a family? Should he be able to afford to have a wedding that he and his bride would be happy with? Maybe we tell him to take out a personal loan. Let’s say he and his bride put their wants aside and have a courthouse wedding. Then they have a child. Now what? Our wage might be telling them to rethink their family planning. Maybe we should tell them it’s irresponsible to start a family if they can’t financially support one.
A Decision to Make
At this point our employee is faced with a decision. If he can’t get a higher wage, he has to ask himself: “Should I stay at my current job or give up on my dreams of having a family or owning a house, or should I quit in pursuit of a higher wage from an employer that believes that their employees deserve to be happy?”
While I have heard of many being caught in this scenario, I have also heard employers complain about lack of loyalty and high turnover rates, and I see most do nothing more than scratch their head about it. It’s simple though when you look at the big picture: high turnover is caused by low wages. And allowing a comfortable lifestyle for your employees is paramount in creating company loyalty.
The Collective Burden
There are other ways that low wages affect us, collectively. It is just a case of cause and effect when you look at the points we discussed pertaining to the individual. Most of the remedies employers rely on for their low wages are government assistance programs. In other words, your favorite big box store might save you money on your weekly grocery bill, but you will spend that money on taxes supporting the programs that their employees desperately need. So rather than these stores saving you money, they are having you subsidize their payroll so their employees can survive.
Another costly venture of low wages that hits all our wallets is found when we look at the likelihood of being arrested. In fact, “Adults in poverty are three times more likely to be arrested than those who aren’t.” 2 It is hard to show how this plays out until you start looking at income levels of inmates prior to incarceration. A report from 2014 illustrates this. It shows that 57 percent of men and 72 percent of women incarcerated were living in poverty prior to incarceration. 3 This of course is just one aspect of the mass incarceration issue faced in the United States. However, it is plain to see how it is going to play out. It costs money to put people in prison and we are the ones paying for it.
The Realization
Saving fifty cents on eggs or a dollar on milk might make your wallet feel good. But it’s costing you more than you might realize. Our government assistance programs get over-stressed, our prisons get over-populated, and our taxes go up—all so a corporation can raise its profits. That’s assuming you aren’t on the receiving end of a poverty wage. If you are, then it’s a matter of survival.
Now more than ever it is imperative for employers to realize the impact they have on the communities in which they operate, the individuals that they employ, and our nation as a whole.
What kind of quality of life do you want for your employees? How much do you value the people that power your business?
What does your wage say?
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