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Providing the Basics: The Great Wage Debate

Americans’ outlook on life is higher than ever, so why are wage disagreements all over the headlines?

 

As the economy turns upward, it also seems like spirits are high as well. Gallup found that Americans’ outlook on life has increased–in fact, it is the best it has been in seven years. According to their study, 54.1% of Americans rated their lives highly enough to be considered “thriving” while only 42.1% were classified as “struggling.” Gallup notes that this positive change is also associated with an increase in standard of living ratings, economic confidence, and job availability. They are predicting that increases will continue well into 2015.

Satisfaction with personal life and the overall direction of the United States has increased as well. The percentage of those satisfied with the direction of the United States has increased to 32%. While this may not seem like a large number, it is still the highest the satisfaction rating has been in eight years. Of course, satisfaction with the United States tends to vary based on political party affiliation.

If we are so happy, then why all the wage protests?

When asked what top financial problems in their households were, Americans usually cited low wages and healthcare costs. (Surprisingly, more people stated there were no financial problems in their household than either of these “top” problems). The low wage sentiment has definitely been a hot topic lately, especially after the nationwide wage protest that occurred in April 15, 2015. The media has hailed it “the largest protest by low-wage workers in US history.” Workers in major cities like New York, Boston, Los Angeles, and Atlanta walked out on their jobs that day, arguing for a $15.00 minimum wage. The protest affected over 200 cities across the United States. There were even supporters in the United Kingdom, New Zealand, and Brazil.

The protests seem like they are in direct conflict with studies that indicate an increase in life satisfaction. So, how can these two things exist at the same time? Perhaps it is because more people are satisfied outside of their jobs, or it is just the 42.1% who are struggling that are protesting? Either way, employers need to work toward providing employees with the resources they need to survive in and out of work–if that means higher wages, that might have to be the answer.

According to famous psychologist, Abraham Maslow, a person’s basic physiological needs (food, water, air) must be met before they can do much of anything else. This general mentality applies to employees as well. Have you ever tried concentrating on something really complex on an empty stomach? It is difficult to maintain the high levels of concentration that you need to complete the task when you are hungry. This very, very basic need has to be satisfied first before the employee can be and effective worker. Where workers are not making enough money to support themselves and their families, this situation can easily occur.

These protests are a good reminder to small businesses and entrepreneurs that profits do not always come first–sometimes you need to take care of your people before your business. If you know your employee is struggling with a basic need, look for ways you can help. You can also take a lesson from Dan Price, the founder of Gravity Payments, who just increased his employees’ pay to $70,000 (while dropping his to the same amount), so his workers would not have to worry about basic needs. He is quoted saying, “I would not do this if I thought I was doing anyone a favor. I just think this is what everyone deserves.”

The problem for small business owners however, is that sometimes you may not be able to afford to pay these higher wages. It’s easy enough for us to say that multi-billion-dollar corporations such as McDonald’s should pay better, but how can small businesses help their employees without crippling your business? Unfortunately, there’s no simple answer to this question. Within your business, you must make the best decisions you can with the information you have at hand. A $15 minimum wage might make sense in expensive cities like New York, but where I live in Asheville, NC, the living wage for a single person (i.e. the minimum amount of money a person must make to survive) is $8.88/ hour.

As a small business owner, one of the most difficult tasks you might face is balancing the needs of your business with the needs of your team. If you can afford to pay your team well, they will move out of survival mode and towards self-actualization, the state of being happy and fulfilled in their lives. This makes them better employees who take pride in their work, and are glad to contribute to the greater whole. That said, if you spend more than you take in, your employees won’t be working for you much longer. (And they’ll definitely not be thrilled about losing their jobs.)

While most of us care enough about our fellow human beings to want them to be sufficiently fed and housed, for entrepreneurs, hiring employees is both a necessary step for growth and a drain on the limited resources of small, growing companies. I fear there’s no easy answer to this wage debate that will satisfy workers and small business owners, so you must follow your own heart (and your balance sheet) when it comes to your employees. Wages are important; we all need money to live in today’s world. Just keep in mind there may be other things you can do to make your employees’ lives better even if you can’t raise their hourly rates. If you don’t know what, it’s probably time to ask.

 


This article was originally published on Inc.com in April 2015.
Ariana Ayu is the author of the Business Mojo column on Inc.com (a website and magazine geared toward entrepreneurs) which was published between 2014-2016. Ariana is the CEO and founder of several companies, including Ayutopia International, LLC, which develops profitable collaborative corporate cultures, personal celebrity brands, and custom branded websites. Her press and media appearances include USA Today, International Business Times, ABC, CBS, CBS Money Watch, the CW, Eyewitness News, FOX, NBC, Newsday,Virtual-Strategy Magazine, World’s Luxury Guide, MoneyShow.com, Miami Herald, BlogTalkRadio, and Hollywood Industry, among others.

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