Wednesday, February 21, 2018

the bb wonders: why aren’t wages rising?

Every once in a while, I pull open a newspaper or log onto a website and read an article about the ‘stagnant’ wages of the middle class. When I read these articles, I expect to see stories about hard working Americans being unfairly or even illegally denied the compensation they are due for their hard work.

But instead, I usually end up reading an article where the built-in assumption is if an employee shows up to work every day for a year or so and doesn’t get fired, he or she should automatically received some sort of raise.

Huh? Just get in on time, don’t screw up for a while, and get a raise? Where do I sign up for these jobs???

I remember learning about this mentality when I first started working. A lot of people asked me a year into my job about a raise. Not if I got a raise, mind, just about it, if I'd gotten a raise - yet - because the assumption was I would get a raise a year into my tenure.

This was interesting. I hadn’t been promised anything and thus wasn’t expecting anything. But about a week after my second year started, I did get a raise despite doing nothing better than I had done it a month ago.

I feel this mentality needs an update. What happened to earning a raise by becoming better at the job? Was this ever a thing to begin with? Another thing I learned when I first started working was that if there was 'nothing to do', an employee should 'do nothing'. Paid to do nothing! I could hardly believe my eyes.

Instead of sitting around because there is nothing to do, go talk to someone and find out what problems the organization needs solved. If you can solve any of those problems, you are on your way to a raise. To put it more bluntly, the way to increase wages is to earn a raise.

This was more or less my approach over five and a half years. I didn't get five and a half raises (editor's note: he got fewer than five and a half raises) but each time I got a raise, it was based on doing the new things I’d discovered needed doing. And when the terms were finalized in these cases, I did not have a long list of new tasks or responsibilities to undertake in order to justify my new wage - the things I was being paid for were the things I was already doing.

Signed,

The Business Bro

Footnotes / a rebuttal

0. Sure, let's play devil's advocate...

Now, I can identify a couple of reasons for the pervasiveness of this mentality. Inflation is the obvious one - if prices rise but wages don't, employees are basically being paid less in terms of what their wages are worth in terms of goods and services. But inflation doesn't happen once a year so I'm not sure why 'inflation-adjustments' need to happen once a year.

And it's not like the organization isn't impacted by inflation, either - in order to pay YOU, hotshot employee, a wage consistent with inflation, they will need to cut back in other areas! To put it another way, if everyone in an organization demanded a 1% annual raise, no matter what, then the organization with an otherwise unchanged cost structure will have to lay-off 1% of its workforce in order to keep everyone else happy.

Another reason for this mentality is that some employers do make promises to new hires about reviews, bonuses, or raises. Often, these promises correlate perfectly to the word ‘annual’. Well, reader, do you need this blog to remind you that it's a bad sign if someone breaks a promise to you? A broken promise is a far bigger problem than stagnant wages, I assure you.