It’s the Salary, Stupid!

PHOTO CREDIT: Whitney Curtis for The New York Times

The days of $10 or $12 hourly wages are over. Salaries of $30–40k no longer cut it. As the pandemic subsides and employers attempt to fill the “millions of open positions” available to jobseekers, is anyone surprised at the lack of interest from unemployed or underemployed people? Certain lawmakers would have you believe the federal government’s weekly unemployment supplement of $300 is to blame for workers lackluster response to job openings. Others argue that people just don’t want to work. Neither is true — most CEOs just don’t get it. The problem is that salaries and wages offered are insulting.

Bank of America CEO Brian Moynihan and his team understand. BofA set a minimum wage of $25 per hour recently to properly value their hourly employees and allow workers to address the real cost of living in our country. Target and Amazon raised their starting wage to $15 per hour last year with plans to increase the starting wage annually. And pay increases are not confined to hourly workers; salaried workers are seeing higher starting wages as well, with the lower bound of entry-level college graduates salaries hitting $48k — $60k and higher in most markets for accounting, marketing, project managers, and other positions (STEM positions are clearly higher).

But most employers simply still do not understand the real cost of housing, food, transportation, child care, and employee-funded retirement. Take for example the NYTimes article “Where Jobless Benefits Were Cut, Jobs Are Still Hard to Fill” (Patricia Cohen, June 27, 2021). Employers are surprised when job fairs yield few to no new candidates for jobs offering $10, $12 or $13 per hour. Have you tried to live on $10, $12 or $13 per hour? Have you tried to afford an apartment, food, AND clothes on a salary of $40k? Let me let you in on the dirty little not-so-secret: you can’t. No wonder employees are holding out for better jobs at higher wages.

Lackluster candidate response to such job openings has nothing to do with the federal employment supplement or lack of desire to work. Workers want to be valued. Workers want to be part of something bigger than themselves. Give them a very nice work environment, great company culture, attractive wages, autonomy and respect. Invest in your employees. Value them as people both inside and outside the workplace. Understand life from their vantage point. Then see how many job openings remain. The days of $10 or $12 hourly wages and $30k-$40k salaries are over.

Brent Wouters transforms companies using a combination of high-touch human interaction and high-efficiency technological innovation to build a Culture of Belief