Sunday, September 8, 2013

Tazi’s Corner # 56 – Fair Wages For Fair Work

Dear Readers: 

As I write this the big news is fast-food workers asking for $15/hour and striking to get it. Perhaps it will be outdated in a week (which is when it will print) but for now it is dirtying my litterbox, to coin a phrase, and I want to discuss it!

If you recall my last column, Tazi’s Corner #55 – Potential vs. Practice (A Labor Day Lesson)you know my feelings on political subjects; I don’t like to get involved in them. This issue, however, does not strike me as political but rather as ethical – work ethical, to put it succinctly.

There are reasons low-skill, low wage jobs exist. Simply put, it is because there is a need for them. These jobs, however, are in high demand because the under-educated and unskilled are not in demand for other jobs, creating one market for a large number of people, from teenagers to former homemakers who are looking for a little extra money. The laws of supply and demand state that when you have more workers than you do jobs, the terms are not all that friendly towards labor. Minimum wage is, as comedian Chris Rock once said, an insult. It basically tells an employee “if I could legally pay you less, I would”. While I agree that the minimum wage should be increased to match the rate of inflation, I do not believe it should outstrip the value of the job.

In all sincerity, I do not think a job flipping burgers at McDonald’s is worth more than double the current minimum wage. The position is not on par with being the grill chef at a fine dining establishment, nor does it require a degree from Culinary School. Low wage, unskilled jobs should be a starting point in one’s working life, an inspiration to train for something better, not a lifetime career choice. Corporations like McDonald’s and Dunkin’ Donuts (among others) actually have college scholarship programs for their employees, as well as training opportunities for promotions to management, all of which can lead to better paying positions that pay the living wage people are seeking (which is pretty low for a teenager living with Mom and Dad) and that require a fair workload to earning ratio. This brings me to my next point: Executive pay.

Once upon a time CEO’s and other executives made, on average, 40x what the average worker made; now that number is approximately 400x what the average worker makes, when you include perks like bonuses and stock options. (Before he retired, former Disney CEO Michael Eisner was making more per second than his park workers made per hour. Disney Corporation is leading the charge against hiking the Federal minimum wage, claiming it is unaffordable for their business and would hurt their stockholders. How is this defensible?).

Now I realize that bonuses and stocks are not guaranteed, that bonuses can be rescinded and stocks can lose money and that accepting them in lieu of cash is a gamble; but when your base pay is more than enough to live a life of extreme comfort that risk is a low one. Moreover, if it were a high risk option, why would so many executives gladly accept such compensation packages? These men and women did get where they are by taking risks, but not by taking stupid risks; rather, calculated risks that stood a good chance of paying a good dividend. Whether it was working unpaid overtime as an entry-level worker or accepting a promotion that meant frequent travel (and thus time away from family) these risks had a good chance of paying off in the near future and the sacrifices made were worthy of the rewards received. In short, the risk of losing money on these variable compensations is low, while the chance of gain is quite high.

That being said, why not offer these options to all employees of publicly traded corporations – from entry level to executive? Stock can be offered in lieu of a pay raise, keeping workers at the minimum wage but with a small share of the company and quarterly dividends paid or reinvested for more stock. Another way to accomplish this would be through a small, weekly payroll deduction taken each week and put towards the employee price per share of company stock, in addition to a pay raise sufficient to bring minimum wage up to what it should be to remain steady with inflation. In a short time, dividends received will more than cover the weekly deduction and “McJobs” would suddenly be a more attractive employment option that would offer a living wage for those willing to invest in their future.

Whether a company realizes it or not, human resources are their most important resources. Without employees, a company cannot run; happier employees mean more productive, more loyal workers (as Costco discovered when it raised its hourly wage to $11.50/hour and actually saved money in the long run due to lower employee turnover). Employees must remember that a high paying job is a privilege, not a right. A person has the right to be paid the minimum wage that is set by the government and a right to not be discriminated against on the basis of age, sexual orientation, gender, religious affiliation, or creed. Note that educational level, lack of skills and work ethics are not among the protected characteristics; it is up to the employee to make the changes that will make them a more valued employee. Prove yourself to be irreplaceable and you will find your value reflected in your paycheck – if not with your current employer than with one who realizes your worth. Strike over a demand for grossly inflated pay and all you will see is a day’s wages lost.


P.S. CLICK HERE to read about a bill that supports limiting the amount of tax deductions businesses can take for bloated CEO pay (thus reducing taxpayer subsidies.) It is sponsored by Rhode Island's U.S. Senator Jack Reed (D) and Connecticut U.S. Senator Richard Blumenthal. Then, think about it: Your charitable giving deductions are limited. Your medical expense deductions are limited. Why are businesses not limited for their "operating expenses"?

Ask Tazi! is ghostwritten by a human with a Bachelors of Arts in Communications. Tazi-Kat is not really a talking feline.

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