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Positive Pressures for Higher Entry Level Pay

Over the past few years, we have seen several of our clients considering and/or implementing a living wage policy and structure.  The “living wage” concept dates back to when the American Federation of Labor (AFL) was established in 1886. The organization pushed for paying all workers (union and non-union) at a level which would maintain an active family with an “American standard of living higher than the 19th century European urban working class.”   (Quote from the University of Maryland University Libraries article on Living Wage)

A valuable resource that we have used with our clients that desired a living wage for its employees is the Living Wage Calculator which was first created in 2004 by Dr. Amy K. Glasmeier and the Massachusetts of Institute Technology (MIT).  Her model is explained in the next paragraph which was taken from the Living Wage Calculator website.

The living wage model is an alternative measure of basic needs. It is a market-based approach that draws upon geographically specific expenditure data related to a family’s likely minimum food, childcare, health insurance, housing, transportation, and other basic necessities (e.g. clothing, personal care items, etc.) costs. The living wage draws on these cost elements and the rough effects of income and payroll taxes to determine the minimum employment earnings necessary to meet a family’s basic needs while also maintaining self-sufficiency.

There are 12 family compositions in the calculator from One Adult with No Children to Two Adults with Three Children and Both Adults working.  The program allows you to select a state and county in the state to see the living wage, poverty wage and minimum wage for all 12 family compositions. 

There are many groups around the country that are promoting higher minimum wages that align with the current living wage figures.  One such organization is the Fight for $15 which was started in 2012.

We believe that it is important for organizations to set a plan in place to ensure its employees are making at least a living wage if they don’t have one in place already.  

Learn more by visiting www.johansongroup.net or www.dbsquared.com or request a free consultation by visiting https://www.dbsquared.com/consultation-request-2/.

2020 “Living Wage” and “Minimum Wage” Intersection or Roundabout?

An intersection is a point at which two or more things intersect, especially roads. (Merriam-Webster)

A roundabout (also called a traffic circle, road circle, rotary, rotunda or island) is a type of circular intersection or junction in which road traffic is permitted to flow in one direction around a central island, and priority is typically given to traffic already in the junction. (Wikipedia)

After the nation is able to heal from the Coronavirus crisis and the corresponding forced economic recession to save human lives, government officials and employers will be working to bring our nation’s workforce back to pre-recession productivity levels and employees will be pushing hard to reestablish their previous compensation and benefit packages.

Compensation and HR professionals are keeping their eyes on two and maybe more things that are intersecting or circling and will have an impact on future compensation levels for the lowest paid jobs in our country.  Living wage discussions and new state minimum wage laws are raising compensation levels above the current Federal minimum wage rate of $7.25 for non-exempt positions.

Will Living Wage rates (Reference: M.I.T. Living Wage Rate Calculator) be given a right-of-way status at a four way intersection with state minimum wage laws, proposed Federal minimum wage rates from forthcoming legislation to gen up our post-recession economy and/or demand greater than supply job economic factors.  Using a roundabout circular intersection, which of the four mentioned items will take a priority lead position on compensation minimum wage policy decisions?

In our compensation consulting work with municipalities, we are seeing more requests by city council members for higher minimum wages or living wages for the lowest paid positions and employees that fill these jobs.

The next time you roll-up to a four-way stop intersection or press the gas pedal to enter a circular roundabout, we want you to think about the lowest paid employees and how they make a living and cover basic shelter and food expenses with $7.25 to $13.00 minimum hourly wage rates.

Learn more by visiting www.johansongroup.net or www.dbsquared.com or request a free consultation by visiting https://www.dbsquared.com/consultation-request-2/.