Minimum wage help. Do I give them a pay rise?

[Westfox]

Hi......So my state has just introduced a minimum wage. It's causing me a problem.

We have some people who do unskilled work, they are good at what they do. But the problem is that when I put their pay up. They are on the same as the graduates.

Therefore I feel that their pay has to go up, and so on up the chain so we maintain separation between skill levels.

If I leave the graduates on the same pay they are on they will get pissed off and leave.

For comparison. My paramedic BIL was earning good money ($15/hr) now he is just above minimum wage. He is pissed off he has college debt to pay off, plus his job is stressful. He says why should he bother if his skills ar not recognized. He may as well take a slight pay cut and have a easy life flipping burgers.

Help! I need some input

So, just Google'd Main minimum wage. Rising from $7.50 to $9 an hour. Wow.

WhereYouLeftIt

The pay is equal to our competitors. We are not out to screw people over,

"The pay is equal to our competitors. We are not out to screw people over,"
Westfox, think about what a minimum wage represents. The minimum. Absolute bottom. Not a great wage, not even good - the minimum. As I've said, the UK NMW is not enough to live on, won't meet your bills. I can't imagine Maine's MW is any more generous.

The fact that all your competitors also pay so low does not mean you pay well. It means that you all pay badly. Could you live on $7.50 an hour?

Do the grads and non grads do the same job?

I think it depends on what else you're offering your graduates.

I was (years ago) on a graduate trainee scheme. I was a warehouse shift manager for 6 months. The pickers I managed got paid more than me because they got well paid overtime and shift allowances. A graduate could be placed on a night shift with no extra money because we just had a salary - and we always worked longer hours unpaid. We rotated through 4 roles in 2 years. After 2 years we went into fixed positions where we earned far more than the pickers.

I think some of these arguments are against Capitalism rather than the op.

10 days leave? I get 25 plus public holidays and that doesn't seem like enough! Don't people burn out with so little rest time?

There are lots more public holidays in the States than we have here but it does make you think.

Our generous holiday came from an EU directive.

Employment rights in the US are pretty non existent. Maternity leave is a perk.

Blame the system, not OP.

Why don't you pay yourself minimum wage and give your employees a pay rise. Could you survive? Paying minimum wage is a legal requirement and doesn't make you an attractive employer, pay them a bit more than that. Appreciate your staff, without them you don't have a business. Thank god I live in the UK.

In many jobs the UK isn't much better.

When the NLW came in last year the scenario in the OP happened in my DH's company. But they refused to move everyone up. So my DH's line manager is on approx 20p an hour more than him, instead of the approx 90p before the rise.

Yes, we have standard holiday entitlement, maternity and paternity leave etc, but employee rights have been disintegrating for years. Zero hour contracts were a particular catalyst. As was the 2 year thing brought in by the coalition. The removal of legal aid and the changes to tribunals also.

The "at will" contract OP suggests as a good alternative to zero hours sounds like just as big a nightmare. There is no security in it...how can the employees apply for credit or a mortgage when they could lose their job at any time without notice or recourse? Same as temporary contracts in the UK.

Its pretty silly to compare jobs by whether they are college grads or not.
Someone doing a physically hard job might make the same contribution as a college graduate.
Surely you would pay people by the contribution their job makes, not by snobbery and class divide?

Your BIL's attitude is his problem. Its not relevant to the decision you make about your company pay scale.

There do seem to be a lot of anti capitalists out!

The system is the system, I run my business legally I trust and respect my employees and they trust me. Why do you need laws to protect you when you trust each other.

Over here we get one public holiday a month. Some states get more some less.

Our graduates have a lot more responsibilities

because if you dont have laws all it would take would be for a couple of super rich people to set up a cartel in a town / small city so no company would pay more then the minium so ether people would ether have to put up with shit wages or move out (if home owners and all local companies paid shit house prices would tank effectlively making in near impossable for people to move away).

It has happened before with the most recent examples of this in Austrillia but hey we dont need laws we can reley on trust and good will of employers....

"Why do you need laws to protect you when you trust each other."
Because there are always people who break the trust. I'm not saying you are such a person, but you must know that they exist?

And I do not consider myself an anti-capitalist. But you have come onto this site asking what to do about the minimum wage being raised to $9/hour, because that is what you currently pay your graduate employees. Minimum wage is never a generous amount. It is what it says it is - minimum. And it seems to me from your posts that you think that is an absolutely fine amount to be paying a graduate.

Oh and as an aside - "My paramedic BIL was earning good money ($15/hr) now he is just above minimum wage. " He is on double the old minimum wage and the new MW is still just 60% of his wage. He's hardly 'just above'. Still, if he thinks he can meet his living costs on $9/hour, maybe he should go for it.

There's not much point comparing US & UK employment. They are different economies. Most of the UK is far more expensive to live in that most of the US, although Maine has expensive areas.

I'm a Brit living in the US. When we moved over DH's salary got converted according to the exchange rate, but I stopped work, so we effectively lost a salary. However, our house is about 3 times bigger than our UK one, and we have a massively higher standard of living (food, cars, clothes, entertainment) and spending money each month.

It depends a lot on where someone lives, but it's perfectly possible that a worker on NMW in the US could have a far more luxurious lifestyle than a teacher or dentist in the UK.

Days off are rare things, though. Healthcare costs the employer a lot and is a really important part of work. I'm not saying OP is throwing cash at their employees, but it sounds like fair employment to me.

This is absolutely why I came back from the US after living out there. I found it, personally, hellish. The power balance between employer and employee, I found, is totally fucked up - they can sack you for awful reasons (I knew one guy who was sacked because his boss found out his girlfriend had cancer and he got sacked because his boss wanted 'someone with less baggage') , and promptly put your life at risk as your health insurance goes. The limited annual leave as well means you can never really get away from work - over here I have 26 days annual leave, and this means I can have a proper holiday once a year and also take a day for my kids' school play, or take a long weekend to visit family (who live in another country), or go to the dentist and not worry. And that's before we hit the nightmare of no maternity rights at all - my best friend out there worked until the day she went into labour (literally, went into labour while at her desk) and was back at work seven days later because her family couldn't afford anything more. I was barely off the sofa seven days after giving birth!

The only people I know who seem happy in their work in the US are usually both high paid and contractors - my SiL works as an IT consultant and earns enough in 6 months to live comfortably (and cover her own insurance etc) for a year, and gets on fine. But most Americans on modest incomes seem to exist under a level of constant pressure I think Brits don't get.

I don't think the OP is a bad person - she sounds absolutely standard for an American employer. I just think it's a pretty dystopian culture and I wouldn't go back there for any price.

How big are the gaps between bands? Is there any way you could leave the higher ones as is and raise the lowers ones by differing amounts so you just end up with a smaller difference between bands overall?

Eg - if you currently had 7.50, 9, 12, 18, 30, 55, 80 then you could go to 9, 12, 15, 22, 30, 55, 80

Ok, so those on min wage are getting a 20% pay rise.
Could you give, say, the graduates a 13% rise, and the managers 7%.
So everyone gets a good raise, but the gap shrinks between the grades, without eliminating it all together?

If the graduates are on a training track of some type you may not need to raise their wages. You need to find out what other employers are doing to see if it's necessary. But I would expect to see graduate attitudes drop slightly if you don't increase their wages some.

When the NMW was introduced in the U.K. It had some inflationary pressure on other wages too, but on average employers keep costs down because productivity went up. You may find the same - higher wages can lead to better employees and more efficient working, fewer days off etc.