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2014-10-22 1:34 PM
in reply to: jmk-brooklyn

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Subject: RE: Seattle raises minimum wage to $15/hr

JMK, you had asked me earlier what I meant when I said that raising the minimum wage would bring more people closer to the bottom. I think you answered it yourself earlier in this thread. 

 

"The fact that the new guy in the mailroom who used to make $8 now makes the same as you after 7 years on the job might sting your ego, but that by itself is not a reason that your boss should pony up more money if you're still doing the same job and delivering the same results that you were last year. If a person came to me and said, "XYZ used to make 20% less than me, and he just got a raise, so I demand that you give me a raise so I still make 20% more than him" I'd tell him that he'd better be back at his desk by the time I finish laughing."



2014-10-22 1:37 PM
in reply to: crusevegas

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Subject: RE: Seattle raises minimum wage to $15/hr
Originally posted by crusevegas

Originally posted by jmk-brooklyn
Originally posted by crusevegas

Originally posted by jmk-brooklyn
Originally posted by Raansnel there is a lot more to it than the minimum wage being raised - as my dad said, if they raise minimum wage to $15, then I am going to demand a raise because it means the guy who just got hired is going to making as mich as I am after 7 years. so yes, it actually is a lot of people Nd a lot of money. there is a reason you could buy a loaf of bread for 99 cents 15 years ago and now even the cheap bread is $2, and it isnt because the ingredients changed -- that bread is $5 a loaf

You can certainly demand a raise, but if your value to the company, in terms of your experience, skills, productivity, and work history, hasn't changed, I wouldn't be so sure that you'll get one. There is only one reason (excepting COLAs) that a person has a right to expect a raise: Are they bringing more value to the company than they were a year ago? The fact that the new guy in the mailroom who used to make $8 now makes the same as you after 7 years on the job might sting your ego, but that by itself is not a reason that your boss should pony up more money if you're still doing the same job and delivering the same results that you were last year. If a person came to me and said, "XYZ used to make 20% less than me, and he just got a raise, so I demand that you give me a raise so I still make 20% more than him" I'd tell him that he'd better be back at his desk by the time I finish laughing.

Wow, this shows such a lack of understanding of human nature.  I just don't know where to begin JMK?!?!?!?!?!?

 

As is often the case, I have no idea what you mean. Care to elaborate?

 

Possibly a better place to start would be you explaining this and your rational behind it.

 

"You can certainly demand a raise, but if your value to the company, in terms of your experience, skills, productivity, and work history, hasn't changed, I wouldn't be so sure that you'll get one. There is only one reason (excepting COLAs) that a person has a right to expect a raise: Are they bringing more value to the company than they were a year ago? The fact that the new guy in the mailroom who used to make $8 now makes the same as you after 7 years on the job might sting your ego, but that by itself is not a reason that your boss should pony up more money if you're still doing the same job and delivering the same results that you were last year. If a person came to me and said, "XYZ used to make 20% less than me, and he just got a raise, so I demand that you give me a raise so I still make 20% more than him" I'd tell him that he'd better be back at his desk by the time I finish laughing."

 




I'm not sure where the confusion is, so I can't really do anything but try to re-state my point differently.
Outisde of COLA, there is no entitlement to a wage increase. A wage increase is, or should be, anyway, a recognition of a worker's increased contribution to the business that they serve. If your sales were exactly the same as last year, and you didn't otherwise contribute to the business more than last year, why should your boss give you a performance increase for doing the same job with the same results? Further, what the guy across the hall makes should have no bearing on what you make. His salary is a function of his experience, skills, salary history, and performance level, and so is yours. If he gets a raise, unless your performance was equal or better than his, there's no reason why you should. And if someone who makes less than you gets a raise, there's no reason at all, strictly speaking, why your salary should go up, since his compensation has nothing to do with yours.

Do people think otherwise? Of course-- all the time (Is that the "human nature" you're talking about?) . Realistically, if I give a big raise to the manager, and the manager is now making 3% less than their boss, where they used to be making 10% less, it's probably a good idea to give the boss a raise too, if they're somoene I want to retain. But that doesn't mean their entitled to it-- it's a decision I choose to make as the business owner because the boss is likely to be more productive if he feels that he's being compensated fairly. But if I feel that he's already making more than he's contributing, I certainly have no obligation to give him more money just because I'm increasing his direct report's salary.

I have people coming to me every year complaining bitterly that their counterpart in another department makes more than they do. As long as they are in an acceptable, competitive range for that job function, there's no reason why Account Executive A should make the same as Account Executive B unless their performance, experience, and salary history is also identical, which it never is.

If people are upset that the lowest-paid workers in their company are still going to be making less than them, but not as much less than them as before, then, in my opinion, that's too bad. It's really not anyone's business what anyone else at a company is making. If you think your compansation is unfair or below market level, you can either go to your boss and explain why you think so, and give evidence to support your claim, or you can go out on the open market and see if anyone will pay you more than your currently making. Unless you're under a contract or a CBA or some other labor agreement, your company can pay you whatever they think is fair for your job. You're under no obligation to accept their offer and can leave at any time if you're unhappy.

As I said, I'm not really sure why anything that I said is so confusing or earth-shattering or representative of a poor understanding of human nature. Just because something is human nature doesn't mean that it's right.
2014-10-22 10:22 PM
in reply to: jmk-brooklyn

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Subject: RE: Seattle raises minimum wage to $15/hr

Originally posted by jmk-brooklyn
Originally posted by crusevegas

Originally posted by jmk-brooklyn
Originally posted by crusevegas

Originally posted by jmk-brooklyn
Originally posted by Raansnel there is a lot more to it than the minimum wage being raised - as my dad said, if they raise minimum wage to $15, then I am going to demand a raise because it means the guy who just got hired is going to making as mich as I am after 7 years. so yes, it actually is a lot of people Nd a lot of money. there is a reason you could buy a loaf of bread for 99 cents 15 years ago and now even the cheap bread is $2, and it isnt because the ingredients changed -- that bread is $5 a loaf

You can certainly demand a raise, but if your value to the company, in terms of your experience, skills, productivity, and work history, hasn't changed, I wouldn't be so sure that you'll get one. There is only one reason (excepting COLAs) that a person has a right to expect a raise: Are they bringing more value to the company than they were a year ago? The fact that the new guy in the mailroom who used to make $8 now makes the same as you after 7 years on the job might sting your ego, but that by itself is not a reason that your boss should pony up more money if you're still doing the same job and delivering the same results that you were last year. If a person came to me and said, "XYZ used to make 20% less than me, and he just got a raise, so I demand that you give me a raise so I still make 20% more than him" I'd tell him that he'd better be back at his desk by the time I finish laughing.

Wow, this shows such a lack of understanding of human nature.  I just don't know where to begin JMK?!?!?!?!?!?

 

As is often the case, I have no idea what you mean. Care to elaborate?

 

Possibly a better place to start would be you explaining this and your rational behind it.

 

"You can certainly demand a raise, but if your value to the company, in terms of your experience, skills, productivity, and work history, hasn't changed, I wouldn't be so sure that you'll get one. There is only one reason (excepting COLAs) that a person has a right to expect a raise: Are they bringing more value to the company than they were a year ago? The fact that the new guy in the mailroom who used to make $8 now makes the same as you after 7 years on the job might sting your ego, but that by itself is not a reason that your boss should pony up more money if you're still doing the same job and delivering the same results that you were last year. If a person came to me and said, "XYZ used to make 20% less than me, and he just got a raise, so I demand that you give me a raise so I still make 20% more than him" I'd tell him that he'd better be back at his desk by the time I finish laughing."

 

I'm not sure where the confusion is, so I can't really do anything but try to re-state my point differently. Outisde of COLA, there is no entitlement to a wage increase. A wage increase is, or should be, anyway, a recognition of a worker's increased contribution to the business that they serve. If your sales were exactly the same as last year, and you didn't otherwise contribute to the business more than last year, why should your boss give you a performance increase for doing the same job with the same results? Further, what the guy across the hall makes should have no bearing on what you make. His salary is a function of his experience, skills, salary history, and performance level, and so is yours. If he gets a raise, unless your performance was equal or better than his, there's no reason why you should. And if someone who makes less than you gets a raise, there's no reason at all, strictly speaking, why your salary should go up, since his compensation has nothing to do with yours. Do people think otherwise? Of course-- all the time (Is that the "human nature" you're talking about?) . Realistically, if I give a big raise to the manager, and the manager is now making 3% less than their boss, where they used to be making 10% less, it's probably a good idea to give the boss a raise too, if they're somoene I want to retain. But that doesn't mean their entitled to it-- it's a decision I choose to make as the business owner because the boss is likely to be more productive if he feels that he's being compensated fairly. But if I feel that he's already making more than he's contributing, I certainly have no obligation to give him more money just because I'm increasing his direct report's salary. I have people coming to me every year complaining bitterly that their counterpart in another department makes more than they do. As long as they are in an acceptable, competitive range for that job function, there's no reason why Account Executive A should make the same as Account Executive B unless their performance, experience, and salary history is also identical, which it never is. If people are upset that the lowest-paid workers in their company are still going to be making less than them, but not as much less than them as before, then, in my opinion, that's too bad. It's really not anyone's business what anyone else at a company is making. If you think your compansation is unfair or below market level, you can either go to your boss and explain why you think so, and give evidence to support your claim, or you can go out on the open market and see if anyone will pay you more than your currently making. Unless you're under a contract or a CBA or some other labor agreement, your company can pay you whatever they think is fair for your job. You're under no obligation to accept their offer and can leave at any time if you're unhappy. As I said, I'm not really sure why anything that I said is so confusing or earth-shattering or representative of a poor understanding of human nature. Just because something is human nature doesn't mean that it's right.

dang JMK, well stated.  I had to double check who posted that because it almost looks like something I would have written. 

My only minor nit pick is that employees aren't entitled to COLA, it is an optional raise that most companies feel obliged to give.  Employees do expect it though, so we may be saying the same thing.

2014-10-23 8:22 AM
in reply to: tuwood

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Subject: RE: Seattle raises minimum wage to $15/hr
Originally posted by tuwood

p>

dang JMK, well stated.  I had to double check who posted that because it almost looks like something I would have written. 

My only minor nit pick is that employees aren't entitled to COLA, it is an optional raise that most companies feel obliged to give.  Employees do expect it though, so we may be saying the same thing.




Heh.

Yeah, I didn't really mean that employees are "entitled" to COLA legally, but that, while I don't think employers are obligated to give perfomance increases, I do think that a company has an obligation (moral, ethical, call it what you want) to at least periodically increase their employees' wages to keep pace with the rising cost of living. I think we're on the same page, though.
2014-10-23 10:09 AM
in reply to: jmk-brooklyn

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Subject: ---

Originally posted by jmk-brooklyn
Originally posted by tuwood

p>

dang JMK, well stated.  I had to double check who posted that because it almost looks like something I would have written. 

My only minor nit pick is that employees aren't entitled to COLA, it is an optional raise that most companies feel obliged to give.  Employees do expect it though, so we may be saying the same thing.

Heh. Yeah, I didn't really mean that employees are "entitled" to COLA legally, but that, while I don't think employers are obligated to give perfomance increases, I do think that a company has an obligation (moral, ethical, call it what you want) to at least periodically increase their employees' wages to keep pace with the rising cost of living. I think we're on the same page, though.

 

How would you, as a manager or owner, address the concept of value and job function?  I agree with nearly every point in that raises should be based on performance, and that what A makes should have no bearing on what B makes, etc.  However, I'm thinking more of the concept of more closely related job functions and salary distribution.  For example:

mail room worker: before $6.00/hr after $8:00/hr

mail room lead/shift supervisor: before $8:00/hr after $8:00/hr.

clearly the mail room lead should be paid more than his employee ... more responsibility, etc.  How could you NOT give the lead a raise?  Once you lose him, which you will, how do you replace him?  No one from within will want to move up and take on more responsibility for the same pay so you're going to have to give the "next" guy a raise anyway.

2014-10-23 10:25 AM
in reply to: Sous

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Subject: RE: ---
Originally posted by Sous

Originally posted by jmk-brooklyn
Originally posted by tuwood

p>

dang JMK, well stated.  I had to double check who posted that because it almost looks like something I would have written. 

My only minor nit pick is that employees aren't entitled to COLA, it is an optional raise that most companies feel obliged to give.  Employees do expect it though, so we may be saying the same thing.

Heh. Yeah, I didn't really mean that employees are "entitled" to COLA legally, but that, while I don't think employers are obligated to give perfomance increases, I do think that a company has an obligation (moral, ethical, call it what you want) to at least periodically increase their employees' wages to keep pace with the rising cost of living. I think we're on the same page, though.

 

How would you, as a manager or owner, address the concept of value and job function?  I agree with nearly every point in that raises should be based on performance, and that what A makes should have no bearing on what B makes, etc.  However, I'm thinking more of the concept of more closely related job functions and salary distribution.  For example:

mail room worker: before $6.00/hr after $8:00/hr

mail room lead/shift supervisor: before $8:00/hr after $8:00/hr.

clearly the mail room lead should be paid more than his employee ... more responsibility, etc.  How could you NOT give the lead a raise?  Once you lose him, which you will, how do you replace him?  No one from within will want to move up and take on more responsibility for the same pay so you're going to have to give the "next" guy a raise anyway.




Addressing the concept of value and job function is complex, but the short answer is that it's up to the company or the business owner to define what the metrics and the deliverables are for each function and define what success looks like for each one.

In my post above, I said, "Realistically, if I give a big raise to the manager, and the manager is now making 3% less than their boss, where they used to be making 10% less, it's probably a good idea to give the boss a raise too, if they're somoene I want to retain. But that doesn't mean they're entitled to it...." So I agree with you that, in your scenario, in the Real World, I'd probably have to give the shift supervisor a bump if I'm giving the people that report to him an increase. What I'm saying, though, is that it has more to do with retention and wanting to preserve internal equity than it does with any kind of obligation on my part as a business owner. If I feel that the shift supervisor isn't doing significantly more work than the people reporting to him, and I'm not worried about retaining him, I'm not obligated to increase his compensation.


2014-10-23 11:17 AM
in reply to: jmk-brooklyn

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Subject: RE: Seattle raises minimum wage to $15/hr

answering in a clean post due to the formatting errors.

I always think of what people make as a microcosm of the greater supply and demand laws.  I can offer people minimum wage for various technical jobs and I will never get a qualified candidate, or on the flip side a candidate can insist on a $250k salary to which he'll never find a job.  Some companies try to keep their pay very similar to keep potential conflict down, but it inevitably can effect the ability to find the best candidates.  I tend to pay people what they're asking for if it fits into my salary ranges for the position at hand and it leads to some fairly disparate salaries for the same positions.

At my last job I had 19 engineers working for me and each position had a very wide salary range.  For example a Network Engineer range was from $40k - $90k per year and Senior Network Engineer was something like $60k - $120k.  I had to work with the budget for my positions overall and also had to negotiate with each individual when it came time to hire them but in the end I had people making salaries all over the ranges for each position.  I would have one candidate who had a great resume and level of experience who required $110k in order to come over and another who had less experience and required $80k.  Both were doing the exact same job, but at different levels and I paid them significantly different salaries.
Where it gets interesting is when somebody who is very talented and able to demand a high salary, but they ask for a low salary.  I had one guy who was a rock star, but he worked for a small hospital and came in asking for $70k salary which was a raise for him.  I would have paid him $120k if he asked because he was that good, but he only wanted $70k.  So as a manager and steward of the company resources I should offer $70k, but as a realist that wants to retain a long term employee I offered $90k in that particular instance.

More for discussion sake, at that particular company I was given a 3% COLA budget every year, but I had the full discretion to distribute it however I wanted as long as I kept the salaries in their ranges.  For the guy making $120k I could not give him any raise because he was at the cap, but his 3% or ($3600) that was in the budget could be distributed to other people at higher percentages.  In general COLA would be used to "right wrongs" in that I would give large raises (sometimes 10%-15%) to over performers and very small or no raises to under performers.

2014-10-23 11:36 AM
in reply to: crusevegas

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Subject: RE: Seattle raises minimum wage to $15/hr
Originally posted by crusevegas

JMK, you had asked me earlier what I meant when I said that raising the minimum wage would bring more people closer to the bottom. I think you answered it yourself earlier in this thread. 

 

"The fact that the new guy in the mailroom who used to make $8 now makes the same as you after 7 years on the job might sting your ego, but that by itself is not a reason that your boss should pony up more money if you're still doing the same job and delivering the same results that you were last year. If a person came to me and said, "XYZ used to make 20% less than me, and he just got a raise, so I demand that you give me a raise so I still make 20% more than him" I'd tell him that he'd better be back at his desk by the time I finish laughing."




I still don't think that your term "bringing people closer to the bottom" makes any sense. I've said that before. By your definition, any time anyone gets an increase, everyone who makes more than that person gets brought "closer to the bottom". If the janitor at Microsoft gets a raise, Bill Gates is now closer to the bottom, right? So what?

If the janitor's manager is worth a raise too, I'll give him one because I want to retain him. If he's not, he's welcome to try his luck elsewhere. That's how capitalism works, isn't it? I'm not going to give everyone in my company a raise just because I move the lowest-paid worker in the company to $15/hr. That's completely absurd.
2014-10-23 11:41 AM
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Subject: RE: Seattle raises minimum wage to $15/hr
Originally posted by tuwood

answering in a clean post due to the formatting errors.

I always think of what people make as a microcosm of the greater supply and demand laws.  I can offer people minimum wage for various technical jobs and I will never get a qualified candidate, or on the flip side a candidate can insist on a $250k salary to which he'll never find a job.  Some companies try to keep their pay very similar to keep potential conflict down, but it inevitably can effect the ability to find the best candidates.  I tend to pay people what they're asking for if it fits into my salary ranges for the position at hand and it leads to some fairly disparate salaries for the same positions.

At my last job I had 19 engineers working for me and each position had a very wide salary range.  For example a Network Engineer range was from $40k - $90k per year and Senior Network Engineer was something like $60k - $120k.  I had to work with the budget for my positions overall and also had to negotiate with each individual when it came time to hire them but in the end I had people making salaries all over the ranges for each position.  I would have one candidate who had a great resume and level of experience who required $110k in order to come over and another who had less experience and required $80k.  Both were doing the exact same job, but at different levels and I paid them significantly different salaries.
Where it gets interesting is when somebody who is very talented and able to demand a high salary, but they ask for a low salary.  I had one guy who was a rock star, but he worked for a small hospital and came in asking for $70k salary which was a raise for him.  I would have paid him $120k if he asked because he was that good, but he only wanted $70k.  So as a manager and steward of the company resources I should offer $70k, but as a realist that wants to retain a long term employee I offered $90k in that particular instance.

More for discussion sake, at that particular company I was given a 3% COLA budget every year, but I had the full discretion to distribute it however I wanted as long as I kept the salaries in their ranges.  For the guy making $120k I could not give him any raise because he was at the cap, but his 3% or ($3600) that was in the budget could be distributed to other people at higher percentages.  In general COLA would be used to "right wrongs" in that I would give large raises (sometimes 10%-15%) to over performers and very small or no raises to under performers.




Yup. Thats basically how it works at my company as well. Managers get a 3-5% bucket to distribute across their department as they see fit. They have some extra money to "right wrongs" and promote people, but basically, if the average increase is 4%, if you give employee A 4.5%, you've got to find someone else to give 3.5% to.

Edited by jmk-brooklyn 2014-10-23 11:43 AM
2014-10-23 12:29 PM
in reply to: jmk-brooklyn

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Subject: RE: ---

JMK - I gotcha.  A matter of semantics, I guess, I see there is no real obligation to give the shift super a raise, but for the good of the company, there really is not other logical solution.

My point is mostly surrounding that concept of "what is in the best interest of the company" line of thinking, and it is clearly more pronounced is lower wage enterprises.  In Tony's situation I doubt that the engineer would really care if the mail room guy just got bumped to 31K, whether its the 70K engineer or the 120K one.  But in business like fast food or retail for example (which also happen to be the ones this law is mostly targeting), there may only be a spread of 5 or 6 dollars an hour between the 16YO who is starting his first job ever and the guy 2 or 3 rungs up the ladder who has been there 5 years, it could be a huge deal in how equitable the pay scale is across the board.  

2014-10-23 1:20 PM
in reply to: Sous

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Subject: RE: ---
Originally posted by Sous

JMK - I gotcha.  A matter of semantics, I guess, I see there is no real obligation to give the shift super a raise, but for the good of the company, there really is not other logical solution.

My point is mostly surrounding that concept of "what is in the best interest of the company" line of thinking, and it is clearly more pronounced is lower wage enterprises.  In Tony's situation I doubt that the engineer would really care if the mail room guy just got bumped to 31K, whether its the 70K engineer or the 120K one.  But in business like fast food or retail for example (which also happen to be the ones this law is mostly targeting), there may only be a spread of 5 or 6 dollars an hour between the 16YO who is starting his first job ever and the guy 2 or 3 rungs up the ladder who has been there 5 years, it could be a huge deal in how equitable the pay scale is across the board.  




Agree 100%. If it were my company, and if it wasn't practical to give the guy with 5 years of experience a raise that was proportional to what I was giving the 16YO, I would look at what other forms of compensation might be available. Giving him, for example, more vacation, more autonomy in his job or schedule, a performance bonus based on certain metrics (which costs money, but gives a return in increased production and earnings that more than pays for itself) or an opportinuty for additional training that would allow him to more easily move to the next level in his career, are all effective ways to compensate employees when adding to their base salary isn't practical.


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