Saturday, May 7, 2016

Wage increases (due to minimum wage laws) have rankled some staff that less experienced co-workers now earn the same wages they spent months or years striving to achieve

From Mark Perry.
"Here’s an excerpt from today’s WSJ article “Push for $15 Raises Pay—and Tensions“:
The growing push to raise the minimum wage to as much as $15 an hour is creating new issues in the workplace: While some of America’s lowest-paid workers will get fatter paychecks, their veteran colleagues may feel underpaid.
So-called wage compression poses a financial and management challenge for employers, who say wage increases have rankled some staff that less experienced co-workers now earn the same wages they spent months or years striving to achieve. At Gap and Wal-Mart, which recently increased wages, store managers have had to address employee questions about fairness and pay. Some companies have raised pay for veteran workers, and others plan to offer extra fringe benefits, fearing that valuable workers might otherwise jump ship.
“As you’re raising that bottom, it’s affecting everybody,” said Catherine Knowles, a district manager overseeing eight Mud Bay Inc. pet-supply stores in Washington state. In Seattle, where city laws require many large employers to phase in a $15 minimum wage by 2017, Mud Bay store employees now earn at least $12 an hour, with 50-cent hourly pay hikes planned for September and January 2017.
Employees who had spent a year or two on the job before reaching the $12 hourly wage told managers that it felt unfair that newcomers were paid the same amount, Ms. Knowles said. “They felt that they weren’t able to get compensated for what they learned,” she said.
MP: To paraphrase Thomas Sowell –Many politicians and minimum wage proponents who have never run one business for one day are nevertheless confident that they know exactly how much employers should be mandated to pay unskilled, entry-level workers, even though many of those minimum wage activists have very limited understanding of exactly how those wage hikes will affect employers and have never considered all of the secondary, unintended effects like the impact on the morale of more experienced veteran employees."

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