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Unemployment stats are depressing but contrary to those stats there are still many extremely high paying jobs posted on employment sites i.e.


You'd think these high paying jobs would yeild a living wage.

I am uneasy with the thought of a "living wage". What does that mean? Is that where it becomes my responsibility to cover the short-comings of someone else's poor performance and/or career planning?

Some people make more because of their skills. Some make more because they contribute more to the performance of the organization. It is the economic force of supply and demand that should determine how much one makes.

For the record, I grew up dirt poor. We lived in government housing and often did not have food to eat. (Do not feel sorry for me - it is the worst thing you can do)

When I graduated from high school, I had a 2.14 gpa. I made choices that did not include getting good grades. The "reward" was I did not receive scholarships. Ultimately, I finished college with a graduate degree in economics. At every step of my career, I have been paid based on my contribution to the organization. When I thought I should have been paid more, I stated my case and typically received more compensation.

I am the founder of my company and we pay our people well. Those that contribute to the bottom line are compensated accordingly based on the prevailing market wages and their contribution. Those that are not contributing receive a lower compensation level.

There have been people that did not contribute as much as others. They were paid less. Some have left for "greener pastures". There are some former employees I wish we could get back because of their contributions to our Customers and our business model. It is my concern for those that may leave in combination with my thoughts on being "fair" that incent me to pay my current performers so that they do not leave - or I work with them to create the job that works for them.

The idea of paying someone a "living wage" concerns me. Pay those that contribute based on their performance. Pay the prevailing wages. Those that cannot live on the prevailing wages need to find other work where their contributions may be increased or build their skills.

Thank you for your insights... I always love a good discussion...


Thanks for sharing your thoughts on this. I think you and I are in agreement on most, if not all, of these points. The market sets pay levels for different kinds of work based, at the most essential level, on supply and demand. When our need for a particular skill set outstrips the available supply (think nurses or software developers right now), pay levels tend to rise. I believe organizations that disregard the market in setting their pay levels do so at their own peril - not as much in the public sector, which is protected (mostly if not entirely) from competition, but certainly in the private sector. And so, caution is called for whenever a non-market pay initiative - such as living wage - is undertaken.

Like you, I am a strong believer in market and performance based pay; the consequences of doing otherwise do not appear positive to me. In my consulting experience, however, I work with organizations of all stripes and sizes, with very different missions and "reasons to be". I see my role (at least at current) as helping them develop and implement a reward program that fits their unique mission and philosophy, rather than imposing my particular philosophy on them and their pay efforts. At the same time, when asked my opinion or perspective, I don't hesitate to share it. A few of my clients have felt that implementing a living wage is an imperative part of their pay program, based on who they are and what they are striving to accomplish. And so my job, as I see it, is to help them get that done in the best and right way.

In my view, and based on my experience, I see the living wage concept as just lifting the floor of the base pay program, not changing its fundamentals (including the focus on "cost of labor", not "cost of living", as well as paying for skills and performance).

What do you think?

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About The Author

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    Compensation consultant Ann Bares is the Managing Partner of Altura Consulting Group. Ann has more than 20 years of experience consulting with organizations in the areas of compensation and performance management.

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