Do we need a $15 minimum wage?

On January 25, 2021
Do we need a $15 minimum wage?

Question

$15 minimum wageMost of your readership seems to be in relatively high-salary jobs but I have a question about lower-level jobs. I hope you think it’s worth covering. I see the federal minimum wage is in the news again because the new administration is trying to push through an increase. You published a Q&A column almost exactly a year ago arguing for a national $15 minimum wage (Who really needs a $15 minimum wage?). People expressed very strong opinions. A lot has happened in the past year — COVID, the booming stock market, the change in administration, unemployment. Do you think attitudes about raising the minimum wage have changed? Has yours?

Nick’s Reply

I don’t like to veer away from the main purpose of Ask The Headhunter, which is to provide advice people can use to improve their job situation. But now and then an issue comes up that’s important for us to discuss and understand. The minimum wage is important to everyone because, no matter how much most readers here earn, we all encounter workers who do the lower-paying jobs that affect our lives every day. In fact, we rely on them.

I support a $15 minimum wage

In the January 15, 2019 column you mentioned, I advocated for a national $15/hour minimum wage. My view has not changed. I wrote:

“Fair-market compensation is an amount people need for shelter, food, transportation and other basics of life. That’s more than $70 a day where most people live… If your business can’t generate enough cash to pay a living wage, your business is going to fail for lack of workers. Shut it down now and get it over with.”

Some readers insisted that not all areas of the country should have their minimum wage set as high as $15, because housing costs are much lower in some places. But in an addendum to that column I showed why that line of reasoning is a straw man.

What happens if wages are legislated up?

Many business people have tried to make the case that they would bear the costs of mandatory higher wages, with the result that they would have to lay off workers. Or, they’d have to raise prices, which means they’d lose customers and potentially go out of business altogether. Any way we slice it, these businesses claim, the outcome would be fewer jobs.

As a dyed-in-the-wool capitalist I see this as a kind of creative destruction. When businesses shut down due to economic pressures, that’s not necessarily bad for the economy. It creates opportunities for better-run companies to replace them. As the tectonics of competition shift, workers move to new employers that create new and better job opportunities.

I’m not an economist, and I don’t run a restaurant that depends on $7.85 wages and wait staff that’s paid mostly with tips. I don’t pretend I can predict what a national $15 minimum wage will really mean. But I have opinions that I think are grounded in common business sense.

Nonetheless, my opinions don’t matter in the bigger picture. You, dear readers, are the bigger picture, so I want to discuss what you think. That’s the purpose of this week’s column.

The backdrop on the minimum wage

Let’s set the stage with a report from NBC News about what the nation seems to think about raising the minimum wage:

“Despite the bitter political polarization in the United States today, public opinion polls of voters in red and blue states both show strong support for a higher minimum wage. An August survey found that 72 percent of Americans — including 62 percent of Republicans and 87 percent of Democrats — said the minimum wage should be high enough to keep full-time workers above the poverty line.”

But the same survey emphasizes that higher wages will cost a lot of people their jobs:

“The nonpartisan Congressional Budget Office determined in a 2019 report that raising the hourly minimum wage incrementally to $15 by 2025 could shave, at the median, 1.3 million jobs from the labor force, but would also lift 1.3 million people out of poverty and contribute an additional $8 billion to the aggregate household income of these families.”

One final statistic: While unemployment has held steady, job growth has stalled. Even without a higher minimum wage, in December employers cut 140,000 jobs.

What do you think about a $15 minimum wage?

So, what do you think? Regardless of how much you make today, or whether you are employed or not, do you support a national minimum $15/hour wage? Either way, what do you think the impact would be?

If you were making wage policy, what would you do?

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You got the job promotion! Where’s the raise?

On January 18, 2021
You got the job promotion! Where’s the raise?

Question

promotionMy friend got a job promotion but they haven’t told her what the new base salary is going to be. She was hoping for at least a $5,000 raise. She knows for a fact that the budget is for double that. I told her she should have asked her manager about the raise immediately when he gave her the promotion. They already low-balled her when they originally hired her. I think she needs to suggest a $10,000 increase and see what they come back with. What should she do?

Nick’s Reply

I agree with you that she made a mistake not asking about money immediately. In her hesitation, she unwittingly signaled her boss that money isn’t an issue, and perhaps that she’s not confident in her negotiating ability. The boss may have judged he can take advantage of her. Your friend needs to go knock on her boss’s door.

Is a job promotion reward enough?

Some employers play an underhanded game with salary and compensation. They believe the longer they avoid bringing up money and the longer you don’t raise the issue, the less they need to pay you. This happens with job-offer negotiations and with promotions and raises.

In the case of a promotion, by not mentioning money your employer may signal that the promotion itself is your reward, and that you should be thrilled at the news and accept with no questions asked.

The discomfort your friend felt — and the reason she didn’t ask about the new pay — stems from an insidious contrivance employers (especially HR) rely on when discussing a job: It’s not nice for job candidates to bring up money.

Should you bring up money?

Our employment system drills that cockamamie “rule” into our psyches. This ridiculous idea dominates most job-interview advice. “Don’t bring up money! They’ll think you care more about pay than about the opportunity, the job, and the company!”

And then there’s the capper: “It’s unprofessional!”

Believing this balderdash is probably why your friend is not being paid what she’s worth — and why she’s so hesitant to speak up.

Be forthright about money

Of course money is a key issue! It’s why employers discourage discussing it! Your friend should do as you suggested. Go ask her boss immediately how much the raise is. Since she seems to feel awkward, I suggest this casual yet forthright approach.

How to Say It
“Thanks for offering me this job promotion! So, what’s the money (or pay) like for this new role?”

Say it with enthusiasm and a smile. It’s direct, non-confrontational, friendly and almost innocent. Most important, it signals your clear expectation that the pay must be higher. This is actually the disarming start of a negotiation.

Why do employers always make the salary clear in a job offer, but not always with a promotion? With a promotion they clearly have leverage because you’re already employed at the company. They believe your only option if you reject low pay for a promotion is to quit and start a job search. They believe you have no leverage. This is why you must always have other job opportunities simmering on a back burner. No job is guaranteed. It’s imprudent to have to start a job search from scratch if your current job ceases to be viable.
What if the boss states a low number or says there is no raise at all?

Turn a job promotion into a raise

Your friend should politely and respectfully make it clear the matter is not settled and she expects a negotiation before she accepts the promotion.

How to Say It
“My expectation, based on what the job requires, is that the pay is higher than that. Can we discuss it?”

If the boss asks how much your friend is talking about, she should not state a number just yet because, if the boss is not agreeable, that will likely end the conversation. The objective here is to have a dialogue.

This is where your friend must shift the boss’s expectations, take the discussion up two notches, and take control of the negotiation. Here’s what to say to turn a promotion into a raise.

How to Say It
“I don’t expect you to pay me more than I’m worth. I’d like to work up a brief business plan estimating how much added value I can bring to the job, beyond what the company expects. If I can’t convince you, then you shouldn’t pay me more. Can we meet in three days to go over it before you set a salary on the job?”

The biggest mistake people make in salary negotiations — mainly because it’s an emotional subject and they’re usually not prepared — is to blurt out a salary they believe they’re “worth.” But they fail to justify the number. They don’t make the case, except to say, “It’s what I think.” That’s not sufficient.

Make the business case

What if you negotiate a higher salary but your boss doesn’t deliver the promised raise? Consider the nuclear option.
An old boss of mine handled requests for raises quite effectively. If you asked for more money, he’d smile expectantly. “What more are you going to do?” It’s a fair question. I’d never talk money unless I had a good, defensible answer. Think of it as a simple business plan.

This approach should help your friend start a thoughtful conversation with her boss; a discussion, a friendly back and forth about the job, her skills, and specific ways she can bring more value to the job. Talking shop is always better than just haggling for money. It reveals true respect for the job and the employer.

To be truly effective at negotiating a promotion and a raise, your friend must be willing to make her case. This means preparing a brief business plan that justifies what she’s asking for. And, as in a job-offer negotiation, if what she really wants is truly important to her, she must be ready to walk away from the promotion if the pay isn’t to her satisfaction.

Have you ever been offered a job promotion (and more work) without an appropriate raise? How did you handle it? Did you ever decline a job promotion because it included no raise? Is such a deal ever justified?

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Should you pay someone to fill out your job applications?

On January 11, 2021
Should you pay someone to fill out your job applications?

A reader considers letting someone else fill out all those pesky job applications, in the January 12, 2021 Ask The Headhunter Newsletter.

Question

job applicationsWhat do you think of the new app Apply4Me? It fills out your job applications for you. My question is, how could anyone else, let alone an app, know how best to present my profile for an application?

Nick’s Reply

Let’s take a look. This service (it’s not an app) is offered by TheLadders, a jobs site with an interesting history that led the company into federal court a few years ago.

“Team” job hunting

The idea here is that, if you pay TheLadders for its premium service, a “team” will fill out all your job application forms for you. (There is no indication whether there’s an extra fee for filling out your forms.)

You can check it out for yourself, but here’s the pitch:

“Apply4Me is a full hand-off [sic] process – you submit your information once and we do everything for you.”

“The service was created by Ladders due to the high number of professionals surveyed who were frustrated by the ‘time-consuming’ and ‘repetitive’ nature of the job application process.”

“With one click, our team fills out job applications on corporate sites for you, saving you a ton of time.”

“I am automated”

What happens if an employer’s application form asks a question that the Ladders team cannot answer? They say they’ve got it covered. The application they submit on your behalf includes an admission that it’s all “automated” and that you were not involved — even though it’s in the first person:

”I’m using Ladders Apply4Me to apply to the jobs I’m most interested in. As this is an automated system, please follow up with me directly for any additional questions at [email address].”

If you’re the employer, how do you react to that?

“One-click” job applications?

TheLadders has offered some equally interesting services in the past. As we noted earlier, these offerings led TheLadders into federal court.

Job search is a time-consuming task that I’m sure we’d all like to pawn off on someone who will do it for us — with just “one click.” But you’re right. Someone else doesn’t know how to present you better than you do.

Is this a good idea that will help you get a job? Have you encountered any other such “job search help” services that “will do it all for you?”

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Earn A Network: Ask for the world’s smallest favor

On January 11, 2021
Earn A Network: Ask for the world’s smallest favor

By Matt Bud
Chairman, The FENG

network

It is always difficult to explain why you trust someone. That sometimes spawns within us the illusion of trust when we try to network.

In our daily encounters out in the world, we come across all kinds of folks. Most of the individuals we do business with on a daily basis don’t have to be our friends, and the nature of the exchanges we have with them don’t even require that we trust them.

As an example: purchasing gas. As long as we can bring ourselves to trust the gas station attendant not to pour the gas into the back seat of our car, there isn’t really much at risk. And, since we probably put this exchange on our credit card, there is no possibility that the value received isn’t the amount we paid. The only trust element, if you will, is that the station you have selected prices their products consistently with respect to their competition.

To be an effective networker requires an understanding and appreciation of how trust is created. Often a person has the illusion that any excuse will do to make a call, but we must face reality if such a networking attempt is to be effective. We cannot rely on an illusion.

When networking within The FENG (The Financial Executives Networking Group), a trust relationship is easily started just by just mentioning that you are a fellow member of our august body. It can then be furthered by developing sound “reasons why” you have contacted this particular member. Perhaps they worked at firms where you have worked, attended the same schools, live in the same town, or belong to the same special interest group(s).

One purpose for contacting individuals to network is to get introduced to others. How valuable and extensive the resulting referrals are depends on your ability to present yourself as a trustworthy person.

Relationships and trust take time to build. You can avoid illusion by creating real trust, if only on a low level. The approach I suggest is something I call “asking for the world’s smallest favor that you know will be granted.” For example, asking a networking contact if they know a few recruiters that they might recommend. Recruiters don’t have much value, and the likelihood that you will “burn” your networking contact is small. It is an easy favor to grant. Now that you have them granting you favors, some trust has been established and you can ask for more.

But don’t be foolish. Don’t expect more than you deserve. For example, asking someone too soon for an introduction to their boss requires them to take a tremendous leap of faith. Making “three wishes” along these lines — and expecting them to be granted — would be too much to ask based on what is in reality still a cold call from a stranger.

While you may be looking for just a name, what you’re asking for is probably of critical value to the other person. They will instantly calculate the possible risks to their own career before they introduce you to, say, their boss. Understanding this will help you focus on what you can and can’t ask. Asking for a favor not likely to be granted will ensure that no future favors are ever granted.

So, the best approach is to go slowly, with sincerity and respect, in building your level of trust with each networking contact. Don’t harbor the illusion that any excuse will do for asking a stranger for a favor.  Start by asking for the world’s smallest favor — one you know is likely to be granted.

The difference between illusion and reality in the world of personal relationships is often hard to distinguish. You are the magician. If you do your hocus pocus well, you will get the best out of those hard-to-make new friends and build a network with a solid base for the future.

Matt Bud is founder and Chairman of The FENG — The Financial Executives Networking Group — a forum where senior financial executives share job opportunities and experiences with over 40,000 members spread across the United States and internationally.

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