A Matter of Fairness

MinimumOnce again, the discussion on raising the minimum wage has heated up again; those opposed argue that the economy will be crushed under the weight of its own folly. It has been claimed that raising the minimum wage would have a negative effect on employment and at a time when the unemployment rate continues to linger around 8 percent. Employers, particularly small business employers would resist hiring additional workers or even reduce their workforce outright. Microsoft founder Bill Gates, on MSNBC’s Morning Joe, when asked what would happen if employees were paid “a lot more”, cautioned:

“Well, jobs are a great thing. You have to be a bit careful: If you raise the minimum wage, you’re encouraging labor substitution and you’re going to go buy machines and automate things — or cause jobs to appear outside of that jurisdiction. And so within certain limits, you know, it does cause job destruction. If you really start pushing it, then you’re just making a huge trade-off.”

The headline of the comment was, Bill Gates: Raising Minimum Wage Can Destroy Jobs. Ironically, the tag underneath the image of Gates read: THE WEALTH DIVIDE – THE RICH GET RICHER.

 

The minimum wage was last increased in 2009 to $7.25 per hour or just over $15,000 a year for a worker who is lucky enough to get paid for all 52 weeks of the year. Over the last 20 years, workers have been rendered powerless as worker rights have diminished and income disparities have grown dramatically. While the wealth of the top1percent has ballooned to over 40 percent of the nation’s wealth, the bottom 50 percent has plummeted to a jaw dropping 1.1 percent; and that was in 2010.  To be clear, there has never been any accurate statistical correlation drawn between a moderate raise of the minimum wage and a drop in employment. Let me say it another way; there is no proof that raising the minimum wage judiciously will decrease jobs; there is only rhetoric, assumption and false analogies. In fact, the Department of Labor, as well as a joint study by Princeton University and the University of Wisconsin reports that the last two increases had an insignificant effect on employment.

 Greed

What is reality is that raising the wages of workers is the single greatest economic stimulus to the American economy. Higher wages means that workers will have a higher stake in the health and welfare of the American economy. Even a $.90 increase in the minimum wage buys 7 months of groceries, a year of healthcare costs, 9 months of utility bills or full year’s tuition at a local 2-year college. So why do proponents raise such a fuss, it’s simple, business owners, and investors fear a reduction in profits. Anything that reduces or threatens the sacred shareholder percentage is damned as intolerable. A sad truth is that 63 percent minimum wage workers are adults over the age of 20, many of whom account for 51 of their household’s income; these are not the burger-flipping teens of urban myth. Raising the minimum wage is not only a sound investment in America’s most precious resource; it is plainly the right thing to do.

 

 

~ Richard

 

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Under-serving Customers

Short staffedToday’s business model extols the virtues of doing more with less; that is often translated into serving more customers with less staff. If you sift through the Web sites and blogs that offer advice on providing great customer service, you would be hard pressed to find many that recommend having enough staff on hand to do that. The popular lists talk about smiling, listening, training, communicating and a host of other well-intentioned homilies. At the end of the day however, if your staff is stretched beyond its reasonable limits then your customer service outcomes will be inconsistent at best.

A recent trip to my local drug store put this front and center in my mind. The super drug stores have all but replaced the small, family-owned shops, which catered to the customer who need to make a quick trip to pick up one or a small bag of items in-between major shopping excursions. The chain drug store I tend to frequent almost always schedules one person to run the front counter and relies on calls of help over a loudspeaker to provide backup. The employees who are called have other responsibilities and are not easily available so there is always a lag in getting to customers. Heaven forbid if a customer has a question or issue that cannot be resolved by scanning into a register; that is when the whole system breaks down. During my last drug store visit, I waited behind a customer, who picked up a common cold remedy product, which when scanned, gave the clerk the message that the product was recalled and could not be sold.

The clerk offered no explanation or alternative for the customer; she was left consider her options and to grouse quietly about the product being on the shelf in the first place. What further created a poor experience for her was that just before getting to her recalled medicine, the register scanner had trouble reading the digital coupon on her cell phone and again, the clerk was of little use in resolving the problem. Like most of us who do not wish to be that person who holds up the line at the store, she began feeling the pressure to simply, get out of the way. I made a point not to exhale loudly or display any impatience, but the frustrated customer ultimately walked away from the counter in search of a replacement product and leaving the clerk to deal with the other items scattered around the register.

It would be simplistic to lay the blame entirely at the feet of the clerk and there is no doubt that he could have handled the situation much better. However, it is also fair to ask why the recalled cold medicine was still on the shelf at eight-o-clock at night. It is also fair to question why he was not provided a list of alternative products for the customer to purchase instead. These two questions led me to consider whether there was enough staff on hand that day to update the inventory and restock the shelves properly. I considered whether management was willing or able to train and communicate changes with their staff each day. I also had to consider whether that employee was frustrated at constantly being put in situations in which he is not equipped or trained. I consider these things because I have been in these situations myself.

If this employee lasts at this job, it will be for no other reason other than acquiring a paycheck and perhaps healthcare benefits. Sadly, this is the attitude that all too many customer-facing individuals carry when they greet and deal with customers. Having a barebones staff is the low-hanging fruit of business accounting and even with outstanding team members, there will be times when customers will feel under-appreciated. Employees at the front lines of customer service require more support, not less. Customers need to feel that they are doing more than going through a cattle line. If you find that you are turning over a consistently high number of people whose job it is to be the face of your company, you should consider whether you are frustrating those employees out the door. If that is not enough for you to make substantive changes to your approach to staffing, then perhaps you should consider how many customers you are also pushing out the door.

~ Richard

Is Raising the Minimum Wage Good for your Business?

Most small to medium sized businesses, which employ 52 percent of all U.S. workers, cannot afford to employ a phalanx of lawyers, accountants and economists to decipher the long and short-term impact of raising the minimum wage on profits. The current debate on raising the floor of minimum wage is often centered on just that issue. One side argues that raising the rate will help the working poor less dependent on social welfare, become active consumers and get closer to a middle class standard of living. The other side argues that the domino effect would be to force other salaries higher, which would in turn cause employers to scale back on workers at the lowest end, thus leaving a zero sum gain for the very group the raise is intended to help.

Both arguments seem reasonable and equally likely, so what direction is best for your business? The answer may not be as complex as you may think. Start by considering your company’s values and ethics. Nearly all companies have these two ideals as part of their statement of purpose, slogan or best practices advisory. If they are part of yours, then ask yourself whether it is ethical to maintain full-time workers at a salary level at which they cannot support themselves, let alone a family. I know they are those that would argue that how my employees support their families is not my concern; you pay a “fair wage” for the work they provide. The truth is, you would be right to feel that way, but you would also be correct in thinking about your business in relation to the community it serves and inhabits.

A higher living wage for workers means that they will become less dependent on the social programs, which your company is forced to subsidize through higher local and federal tax rates; it means they will be able to sustain themselves and support their families and possible relieve some stress, thus freeing them to be more productive and stable at work. In short, they’d be happier. Workers who remain at an unlivable wage level become, at best, indifferent to the fortunes of their employer; they cycle though a series of occupational locations as indentured servants, never feeling that they are integral part of the company….and their work will reflect that feeling. After all the research has been done, statistics assembled, rhetoric made and sides chosen, a company’s owner will have to look at the cost of increasing their minimum wage workers salary by one to two dollars an hour and ask themselves what they are willing to sacrifice and what they are going to get in return. The answers to those questions are less likely to be in the collective, but rather the individual and personal circumstance of each company.

For those SMBs who are fighting to compete against the rising corporate tide of the Wal-Mart’s of the world, there may be an opportunity to distinguish your company from those competitors who simply go along with the status quo. There is a market for those that stand for bettering the lives of their people and society as a whole. If you knew that raising the minimum wage at your company by a couple of dollars per person would increase sales, productivity, moral; along with improving your standing in the community and provided an avenue for free advertising, would you wait for someone else to force you to do so, or allow a competitor to beat you to the punch? Would you be willing to take a smaller bonus as CEO? Would it be worth it to know that your children and your children’s children would not have to grow up in a society increasingly stagnated by economic disparity and diminished opportunities? Consider your personal values and ethics, and whether they are exemplified in your business practices.

~Richard

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