Fighting Back Against Unions

CNN Money reports on a new app that business groups hope to use against proposed and impending minimum wage laws:

Looking to “make it easier for small businesses to add their voices to the minimum wage debate,” the Employment Policies Institute recently launched an iPhone app called Wage Engage.

It seeks to alert business owners when minimum wage legislation is introduced in their area — and then lobby against a wage hike measure “at the push of a button” by sending a generic message to lawmakers.

“Please consider the evidence that a minimum wage increase will result in unintended consequences for low-margin businesses like mine,” the template reads.

Nothing magical here, really. And I’m a little puzzled as such laws do tend to impact all businesses. In the end, hiking your prices to cover the wage increase should work in most cases.

But – ignoring the societal case against pumping wages up for entry level positions – the deeper problem is that such an app may serve to antagonize your workers. At least today, workers are still humans capable of many things, from amazing innovation to sulky resentment, and the boss who ignores these attributes does so at their peril. To the obverse, consider the case of Dan Price, CEO of Gravity Payments, who, in mid-2015, instituted a company-wide policy that the minimum wage would be $70,000, resulting in some salaries doubling. Some employees bolted, convinced their contributions were not appreciated, illustrating the perils and pitfalls of compensation plans. But, a year later (which is hardly long enough to really analyze the results, to be honest), his employees have done what? Given him a car. From Business Insider:

Employees at Gravity Payments saved up for months and on Thursday presented their CEO, Dan Price, with his dream car, a Tesla, according to photos he shared on his public Facebook page.

The company is privately held, so obtaining financial results information is not easily done. But obviously his employees appreciate his business strategy and presumably have been motivated to work more effectively1 , thus possibly making the company more than profitable enough to cover the higher compensation costs.

So is it more effective to fight against minimum wage laws, or to raise wages proactively? I’m not a business owner, but if I were I would certainly want to believe that I’d consider Price’s approach.


1I am wary of saying “harder”, as it’s a more blunt instrument – working harder just means you’ve sweated, not that you’ve done anything useful.
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About Hue White

Former BBS operator; software engineer; cat lackey.

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