Thursday, January 28, 2010

A Better Raise

Birth School Work Death (live) The Godfathers (mp3)
Everyday I Think of Money - Stereophonics (mp3)

Due to our healthcare costs going through the roof and into the stratosphere as of January 1, and because we went without raises at all last year, the school was gracious enough to give every single employee a salary bump to cover all or most of that insurance increase. Everyone got the exact same amount, regardless of salary.

Damn Communists, right?

For our youngest teachers, our secretaries, and others on the first or second rung, this pay increase constituted an actual raise. Like, upwards of 2 percent. For those near the top of the heap, it was less than a 1-percent raise, a metaphorical drop in their keg cooler by comparison.

I loved this raise. I think more of our corporations and non-profits should use exactly this kind of raise more often.

Health care costs are the same for our secretaries as it is for our headmaster. Insurance doesn't give a shit what you earn, only how many people you need insured. While the increase might nick the paint on an administrator's salary, it's closer to a head-on collision for the lower folks on our payroll.

For all of Bob's and my -- well, mostly Bob's -- complaining about salary discrepancies and injustice in the pay scale, the cold hard truth is that our headmaster makes under 10 times that of the average employee, and no more than 20 times what our lowest-paid employee would make. By comparison with even such wacky countries as Sweden, this is pretty phenomenal. Meanwhile, the more successful American for-profit companies currently pay a CEO upwards of 300-400 times what their average employee earns. (Don't just click my reference. Google away and find out just how strong this discrepancy is. Not even conservatives refute this fact, only its relevance.)

In 1970, the average CEO earned only 27 times what his average worker earned. By 1988 it crept past 100 for the first time. In 2000, it peaked at a disappointing 548 and dropped back to the low 400s by 2005, the last year the data was tracked.

A big part of this exponential change in salary discrepancy over the last 40 years can be laid at the feet of how we give raises in this country. Just take a gander at my pretty little chart at the right.

If you gave two dudes -- Lowlife and Top Dog (or Dawg) -- starting salaries of $20,000 and $400,000 in 1980, the Boss Man would be earning an impressive 20 times what the Lowlife earned. If you gave each one a 3% raise every year for 30 years, here's where they'd end up today:
  • Lowlife employee in 2010: $47,131
  • Top Dog in 2010: $942,626
In theory, that means the lowlife still makes the same 1/20 as the Top Dog, so what's the problem, right?

But that's not really how the system works, as anyone who loves The Who can attest. Meet the new boss, same as the old boss, right? Because if one Boss Man leaves and is replaced by Boss Man #2, then Boss Man #2 begins his compensation at roughly the same level as his predecessor left it, if not higher.

When Lowlife #1 leaves, he's replaced by Lowlife #2 who goes almost back to square one, or certainly doesn't make nearly what Lowlife #1 was making when he left the job.

The ceiling gets higher; the floor stays pretty much right where it is. That my scenario isn't even close to what is really happening -- that the reality is astronomically more ridiculous -- should tell you just how this has played out in companies across our country in the last 30-40 years: Lowlife level employees see jack and shit; bigwigs keep ratcheting their benefits to the moon, Alice!

A lot of people are OK with this, but I'm not. I think a portion of every year's raises should be a flat amount across the board. When a company's healthcare rates go up, every salary level from low to high should get a flat amount aimed at covering that cost increase plus a little extra if possible. Then, with whatever is left of the pool of "raise money," everyone can get an equal percentage of the money. An extra couple tanks of gas for the little people won't scrape too much off the fine china from the top earners. Their poodles and Shi-Tsu's will still eat fancy scraps.

Sure, there should always be a way to reward the best workers with more of an increase, and a way to neglect those who aren't particularly useful. So I'm not saying this should be a hard and fast rule for every employee.

But if -- and that's a big factor here -- if you believe there's no excuse for a Top Dog to make 300, 400, even 500 times as much as their average (mean or median, I don't care) employee, then the only way to stop it is to either reward the lowest-waged workers faster or in more meaningful amounts and to slow the rate at which the top dogs get their rewards.

Those who aren't bothered by the increasing discrepancy... I guess I'm just kinda wondering how far it has to go before you are. We all end up in the same place, y'know.


troutking said...

Well said, Billy. Plus you mentioned the Boss...kind of.

Bob said...

I'm not convinced that any of us below the top echelon EVER actually gets a pay raise here; we just continually take on more and more work and get partially-compensated for that.

Billy said...

Bob, I agree it kinda feels like that. But it's still worth noting that the highest-paid man here is still earning less than 10x what his average employee takes home.

Think of how we'd feel -- or should feel -- if the expectations and pressures and time constraints on us were the more or less the same but our boss was making $2 million rather than $200,000.

ramonda said...

birth school is in ma favourites lits from now