What Should You Pay?
The economists, bleeding heart liberals, ultra-conservatives, business owners and labor leaders all have their own thoughts and feelings about the subject of increasing the minimum wage. Some use graphs and charts, others use portraits of homeless single mothers, while still others cry for the need of less government intervention. Many provide statistics that supposedly prove that the economy will be better (or worse, depending on which side), for increasing the minimum wage substantially. But for many business leaders, finding the magical sweet spot of the minimum wage to pay for hourly workers is more of an art than science. It is more about taking the pulse of your current economic market, and labor market, to determine what the company can afford to pay vs. what it would take to attract and keep quality employees.
A FoxBusinessNews article
found the following businesses raised the hourly worker pay above the current mandated minimum wage rate over the past year:
1. Amazon-$15 per hour
2. Costco-$14 per hour
3. Target-$13 per hour
4. Walmart-$11 per hour
5. CVS-$11 per hour
Many companies that are increasing their minimum wage are doing so based on the current job market, trying to retain hourly workers. Other businesses are considering increasing the wage due to pressures from outside the business. According to the Fox piece, Genna Gent, Vice President of Government Relations for McDonalds, wrote to the restaurant association stating that an increase in the minimum wage should be phased in, and that all industries should be treated the same way. This is after McDonald's baulked at increasing the standard to $15. It will be interesting to see how the Walmarts and Amazons of the world fare with their recent wage hikes, but studies have shown that increasing wages is an incentive that provides greater productivity, at least in the short term.
Answering the question of what you should pay your hourly workers can be tricky. Many variables will need to be considered before determining what that magic number will be. These include:
• Current market rate for hourly workers
• What your industry pays for hourly workers
• What your competition is paying hourly workers
• What you can realistically afford to pay hourly workers
A great place to start is the Bureau of Labor Statistics
site. There you can find wages for over 800 occupations in 400 industries, by state and metropolitan areas. Use these figures as your starting point then whittle it down using your market area and good old-fashioned gut feeling.