Hillary Clinton, whose campaign is suffering from email drama + The Bern, wants you to know that she is fighting for you. Those of us in the middle class, she is our champion. She is fed up with income inequality, and she wants the term “middle class to mean something again”.
Today Hillary’s Twitter account tweeted this:
“When you see that you’ve got CEOs making 300x what the average worker is making, you know the deck is stacked.” https://t.co/PMAX1XZjwO
— Hillary Clinton (@HillaryClinton) August 22, 2015
After all, she is just one of us, and she’s just as incensed. But I’m not sure which I can relate to more? The $368.00 “Hillary for President” sweater, her $200,000 speaking fees, or the Clintons’ multiple houses? From her one-percenter platform, she shakes her head at the inequality she sees below, and wants us to again believe “our work will be rewarded”.
The inconvenient truth is that income inequality isn’t a scourge against the 99% by those who hold the purse. Business is business, and you are worth what an employer is willing and able to pay you for your work. Recently, fast food workers have campaigned for “fair” wages, and some companies have caved to their demands. This is not sustainable. The desire to level the playing field feels good, but what does that say about what someone brings to the interview table in terms of education, experience, etc.? Those things set others apart, and should be the criteria for selecting employees. You want the best the workforce has to offer. If you want to be that “best”, then improve your position among applicants by gaining that experience or obtaining that degree. If it’s just a matter of moving the decimal point for anyone whenever they demand it, then why try to present yourself as a worthwhile candidate?
There is no better example than that of Gravity Payments, a credit card payment processing company. A few months ago, its young CEO, Dan Price, changed the company’s minimum salary to $70,000. He took a 90% pay cut and dipped “into the firm’s annual $2 million in profits” to help accomplish this feat of paycheck equality.
Price decided to hike his employees pay after he read a study about happiness. It said additional income can make a significant difference in a person’s emotional well being up to the point when they earn $75,000 a year.
Fast-forward to August, and the side effects of the feelings-based decision, which selected an arbitrary salary amount, haven’t exactly amounted to that sought after happiness.
…a few customers, dismayed by what they viewed as a political statement, withdrew their business. Others, anticipating a fee increase – despite repeated assurances to the contrary – also left. While dozens of new clients, inspired by Price’s announcement, were signing up, those accounts will not start paying off for at least another year. To handle the flood, he has had to hire a dozen additional employees – now at a significantly higher cost – and is struggling to figure out whether more are needed without knowing for certain how long the bonanza will last.
Two of Price’s most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises.
Then potentially the worst blow of all: Less than two weeks after the announcement, Price’s older brother and Gravity co-founder, Lucas Price, citing longstanding differences, filed a lawsuit that potentially threatened the company’s very existence. With legal bills quickly mounting and most of his own paycheque and last year’s $US2.2 million in profits plowed into the salary increases, Dan Price said, “We don’t have a margin of error to pay those legal fees.”
Happiness, indeed. This social experiment certainly has proven something. That feelings-based business decisions, or political ones, are not grounded in reality. CEOs or longer serving employees make more than non-CEOs and new employees, but they should! Being the founder/leader of a company with your financial life on the line, or proving your worth over the long haul and obtaining much experience, do factor into pay, whether some like it or not.