Ikea’s Voluntary Pay Raise Experiment Deemed a Success

This photo taken Wednesday, June 3, 2015, shows an IKEA store in Miami. (AP Photo/Alan Diaz)
This photo taken Wednesday, June 3, 2015, shows an IKEA store in Miami. (AP Photo/Alan Diaz)

June  25, 2015– In March of 2015 this forum reported that regardless of the contentious minimum wage battles that have been plaguing the City, State, and Federal governments this year that some major corporate employers were voluntarily implementing pay increases for their hourly workers. (http://newyorkovertimelaw.com/blog/10-companies-that-have-vowed-to-raise-their-minimum-wage/)  Ikea, the furniture giant,  was one of the employers on that list.  The preliminary results of their voluntary wage experiment have been examined and what they reveal is dramatic and enlightening.

Ikea’s Chief Financial Officer, Rob Olson, has announced that as a result of the positive consequences of their voluntary wage increases that they intend to implement a second round of such wage hikes.   Ikea’s pay increase structure was based upon the relative cost of living in the various jurisdictions where it maintained stores.  Stores where the cost of living was the highest implemented more aggressive increases, creating greater financial parity among its U.S. Employees.

Olson made the announcement after summarizing what Ikea saw as the noticeable benefits to their company following the  implementation of the increase.   The first was a dramatic decrease in employee turnover from prior to the increase.  This factor alone reduced the company’s spending on the recruitment and training of new employees, whereby, balancing the cost increases of higher salaries.  Perhaps less tangible but, maybe, more significant was what Olson cited as the ability to recruit more qualified candidates for open positions.   The increase resulted in a noticeable increase in the hiring of more qualified applicants, which resulted in better employees, according to Olson.

So, while others debate the positive and negative consequences of wage increases and their impact on corporate employers Ikea seems to have settled the question as to whether major employers can sustain the impact of wage increases for their lowest earners.  They, clearly, can.

To view the entire article: http://www.huffingtonpost.com/2015/06/24/ikea-minimum-wage_n_7648804.html

The Minimum Wage Battle Heats Up In NY

Credit Chang W. Lee/The New York Times
Credit Chang W. Lee/The New York Times

June 18, 2015– The Minimum wage battle heated up this week in New York as Fast Food workers filled an auditorium on New York University’s campus to testify before a panel appointed by Governor Andrew Cuomo to examine the wage issue.  This hearing comes on the heals of last week’s historic increase in Los Angeles to $15 per hour for their minimum wage. ( See http://newyorkovertimelaw.com/blog/los-angeles-becomes-largest-city-to-enact-15-wage-law/)

At the hearing more than 30 Fast Food and other workers testified about their inability to survive, live, and afford housing on the wages they earn under the current economic scheme.   They, boldly, are seeking an increase from $8.75 per hour to $15 per hour in order to offset the economic disparity between their wages and their cost of living.

NYC’s Mayor, Bill De Blasio, and Governor Andrew Cuomo have been vocal advocates of this historic increase for the 180,000 Fast Food workers residing and working in New York State.  Despite the opposition of major employers over the alleged adverse economic impact of these significant wage changes it is expected that increases will be announced shortly.  The Los Angeles increase seems to have been the momentum shift these East Coast workers were looking for.

To read the entire NY Times Article:

http://www.nytimes.com/2015/06/16/nyregion/board-hears-support-for-raising-food-workers-minimum-wage.html?_r=1

Los Angeles Becomes Largest City to Enact $15 Wage Law

“Los Angeles - Feb 9, 2014: View Of Hollywood Boulevard In Sunset” by David Castillo Dominici
“Los Angeles – Feb 9, 2014: View Of Hollywood Boulevard In Sunset” by David Castillo Dominici

June 11, 2015-While the nation debates the issue and large companies promise some movement on their minimum wage floor, the City of Los Angeles has acted, and acted swiftly.   Wednesday night, by an overwhelming majority, the City Council voted to increase the City minimum wage to $15 per hour.  While the measure still needs to be signed into law by Los Angeles mayor, Eric Garcetti, he has already indicated that he will do so without hesitation.

This increase makes the minimum wage in Los Angeles double the Federal Standard and on parity with only a few jurisdictions.   The size and visibility of the city make the increase historic.  Mayor Garcetti and Mayor De Blasio of New York City have have both been vocal advocates of this change, yet, New York City’s leader has not managed to garner enough support to accomplish this goal.   It remains to be seen if this change on the West Coast will prompt a similar response in the East.

While labor advocates have applauded the action, many large employers have renounced it as crippling to their profitability during a time when the economy is still fragile.  Overtures are already being made to engage in massive lay-offs or corporate relocations.  The impact on these employers may not be as significant as these companies would have the public believe as the increase phases in over the course of several years, with provisions to extend the commencement time for smaller employers.

While the impact of the increase is being debated labor advocates and businesses will be keenly focused on signs of the impact on the Los Angeles economy and how it relates to the rest of the national employment picture.

To read the entire story:

http://americasmarkets.usatoday.com/2015/06/10/10-an-hour-minimum-wage-passed-in-la/?utm_source=feedblitz&utm_medium=FeedBlitzRss&utm_campaign=usatodaycommoney-topstories

Mixed News For Employees As 2nd Fiscal Quarter Begins

Photo by David Castillo Dominici.  Image ID: 100157605
Photo by David Castillo Dominici.
Image ID: 100157605

April 9, 2015-U.S. workers, as they attempt to understand what is happening in the American job market, are being confused by mixed economic signals which, simultaneously, forecast an economic expansion and economic slow down.  For many workers these mixed economic signals have made financial planning for their family’s future a nightmare.

Last week’s economic indicators foretold of some instability in the employment sector.   For the first time this year unemployment claims increased over the prior month’s filings, indicating, potentially, that an increased number of Americans were out of work.  Similarly, the hiring numbers for new employees also indicated a contraction over the, more robust, prior six months. These two factors, in isolation, could be the signs of a real economic slowdown and trouble for working families that have not yet recovered from the depths of the Great Recession. However, it may be too early to judge the state of the economy based on these factors because the relative increases, and contractions, were not significant enough to demand panic, yet.  There could be a number of fluctuating components, from the weather, to increased eligibility for unemployment filing, that may have contributed to these alarming figures.   The real test of whether this is a trend, or an anomaly, will be the results of April’s figures in these areas.

Meanwhile, there appears to be some hopeful signs for American workers as some of the country’s largest employers have begun to raise their minimum wage, voluntarily, above the Federal and state standards.   Employers such as Walmart, McDonalds, and AETNA have all begun implementing these increases, with other companies, likely, to follow suit.  While the raises they have instituted are not close to the wages some labor groups and government officials have been calling for, they are a positive economic trend for employees.

For employees looking to improve their standard of living by seeking higher wages, within, or outside of their current positions it may be a difficult time to forecast what the remainder of 2015 will bring.  For many, perhaps, fear of a second wave of economic downturn will inhibit their willingness to leave the security of their current position for a new, higher paying job.   It may also impede their confidence in seeking an increase in wages in their current employment, if they are employed. The net result may be a kind of economic stagnation and paralysis that is the result of the insecurity caused by years of economic fear and struggle for American workers.

 

 

 

 

Improving Workplace Productivity

 

Freedigitalphotos.net
Freedigitalphotos.net

April 2, 2015

What can be done to make American workers more productive?”

It would seem the simplistic answer to this question might come down to three things; money, money, & more money; however, recent studies of the American workplace seem to indicate that there are other, non-monetary components that contribute to employee productivity.  In fact, according to Ronald Friedman, author and Phd. specializing in workplace psychology, meeting workers’ emotional needs is just as significant as meeting their financial needs when it comes to employee productivity.

In a recent article from the Huffington Post entitled, “5 Surprising Things Ways To Be More Productive At Work” some of the following non-monetary suggestions were made to improve the workplace environment and productivity of American workers. These included:

1. Introduce Plant Life into the Work Environment– Studies have shown that plants in the workplace create a more pleasant and productive environment. Any type of foliage will do.  It is best to suit them to the environment, lighting, and the workers’ abilities to care for them when choosing plant types.

2. Temperature Control– Creating a comfortable temperature through thermostat,  or clothing, adjustments is vital to productivity. One study even found that typists made less errors at 71 degrees F than at lower temperatures.  The key is finding a comfortable temperature that works for the whole staff. Fighting over the thermostat is not conducive to a healthy work environment.

3. Save Your Exercise for the Gym– Whether it is to save time, or because workers are under the impression that physical activity during the conduct of business was beneficial, exercise on the job, actually, decreased worker productivity according to one analysis. Workers that ran on a treadmill while conducting business did neither, particularly, well.

4. Ambient Lighting and Noise– Low lighting and some level of noise have tested as positive to worker productivity. While blocking out all noise may seem like a good way to concentrate, it seems that the complete absence of noise is not the optimal environment for being productive.

5. Lose the Angles– If you have any say in the furniture in your work environment it seems that studies reveal that softer, rounded edges to furniture are more conducive to productivity than sharp, hard edges like conventional business furniture.

There are numerous factors that contribute to worker satisfaction and productivity. Financial compensation and remuneration are, certainly, important considerations; however, they are not the only ones. Most American workers, spending most of their waking hours in a workplace, are more productive when the environment of that workplace provides them with emotional comfort, security, and non-monetary features that increase their happiness.

Creative approaches to improving work environments can be keys to employee retention and satisfaction.

NY Workers Have The Worst Commute in the Nation

Photo by Feelart  Stock photo - Image ID: 100219097
Photo by Feelart
Stock photo – Image ID: 100219097

March 19, 2015-(From The Gothamist) We already had an inkling that commuting in NYC was probably a bit worse than in other cities, but a new study really seals the deal. Comptroller Scott Stringer has released a study comparing New Yorkers’ commuting times to 29 other major America cities, only to find that we have the worst working week commute in the country by far. As Elvis Costello once said, I know it don’t thrill you, I hope it don’t kill you.

Read the entire story at: http://gothamist.com/2015/03/18/ny_commute.php

New York Food Workers Guaranteed Increased Wages

Photo by stockimages.  Stock Photo - Image ID: 100105597
Photo by stockimages.
Stock Photo – Image ID: 100105597

February 26, 2014- On February 24, 2015 the Acting Commissioner of New York State’s Department of Labor, Mario J. Musolino, announced the passage of certain dramatic wage changes which were, previously, proposed, studied, and debated for four months by the 2014 Hospitality Wage Board regarding the wages of tipped workers in the food and hospitality industries.  The direct impact of these changes is to increase the mandated, guaranteed wages for tipped food and hospitality workers.

Classically, workers in New York State that have relied, primarily, on tips for their compensation have been relegated to sub-minimum wages. Food and hospitality industry workers have relied on the benefit of the generosity of customer’s tips to offset the shortfall between their wage and the New York State Minimum guaranteed wage for all other workers.

Effective December 15, 2015 the NYS guaranteed cash wage for tipped workers in food and hospitality will be $7.50 per hour. This is the first such increase since 2011 when the standard for these workers became $5.65 per hour.

For New York City tipped food and hospitality workers the change allows for a $1 differential, or $8.50 per hour. This differential runs parallel to Governor Cuomo’s initiative to allow for a similar differential in the base minimum wage for all other New York City workers as compared the rest of New York State.

The Commissioner also committed to commence a study which examines the impact of the complete elimination of cash wages and tip credits in the food and hospitality industry in New York State.  The result of that study are expected later this year.

While the obvious impact of the measures are to increase the wages of tipped workers in New York State and New York City the ultimate true impact is not yet known. Currently, some food and hospitality spokespeople have indicated that the industry, in response to the Commissioner’s initiative, is examining a voluntary elimination of tipping for workers and the imposition of a service fee on all checks to consumers while transitioning workers to the State guaranteed minimum wage for all other workers.

President Obama Grants Early Holiday Gift to Federal Workers

December 11, 2014-  President Obama signed an Executive Order on Friday granting all Federal agencies and Federal employees a Federal holiday this year on Friday, December 26, 2014.   With the Christmas holiday falling on a Thursday this year this order amounts to a four (4) day, paid, Federal holiday for Federal workers.

This action by the President is not unfounded in Presidential history despite the fact that this action comes in response to a circulated petition among Federal employees which initiated the request of the White House.   While the petition failed to garner the requisite 100,000 signatures which would require some review by the President it did receive support from thousands of workers.

Federal Directors have the right to require employee attendance in the interest of National Security, National Defense, health and safety, on a case by case basis.

It is unknown whether any State or municipal governments will follow the Federal government’s lead in this regard.

For a copy of the full Presidential Executive Order please visit:

http://www.whitehouse.gov/the-press-office/2014/12/06/executive-order-closing-executive-departments-and-agencies-federal-gover

Minimum Wage Freeze Cost American Workers $8.64 Trillion Since 2009

December 4, 2014–  Now that the mid-term elections have come and gone without any action being taken to raise the Federal minimum wage, it is unclear when, or if, any National legislation will be forthcoming. Throughout the current election season populist candidates were touting, seemingly revolutionary increases to the Federal minimum wage, with numbers, as high as, $15 per hour being debated.  Surprisingly, many of these pro-labor candidates were defeated in their election, or re-election, bids for office leaving the probability of immediate action abandoned. The complexion of the incoming Congress has already indicated its early opposition to major changes in this area.

So how does this inaction on the Federal Minimum wage issue impact the American workforce. According to the Center for Economic Policy and Research: “Congressional failure to raise the minimum wage is costing America’s working families and the economy overall. With millions of workers losing billions in pay since 2009 — and hundreds of billions of dollars since the high water mark for the minimum wage in 1968 — it’s no wonder families are falling farther behind and income inequality has exploded even as corporate profits and CEO compensation soar.”

The figure calculated by the CEPR, as of last Monday, is a staggering $6.84 trillion dollar in cumulative losses in wages to the American worker since 2009, as a result of the failure to increase the minimum wage.   Advocates for the increase argue that no legislative gridlock has damaged American workers more, and, possibly, the Amercan Economy.

While opponents of dramatic wage increases sound the alarms of corporate closures, outsourcing, and, general, economic calamity as a result of doubling the minimum wage they have failed to make, even, the slightest movement towards having this figure even, remotely, keep up with the cost of living. Meanwhile, as all indications are that certain segments of the economy are poised for a fiscal rebound from the depths of the Great Recession, the unemployed and underemployed are finding that having a job and working the maximum number of hours they are physically able to withstand is doing little to improve their chances at capturing even a glimpse of the American Dream that their parents told them so much about.

While relative inflation has been low during the period of time from 2009 to the present, one need only compare the isolated statistic of Food Inflation to the Federal minimum wage during this period to see the true impact on the American household. While wages have remained flat, according the US Department of Labor Statistics, Food Inflation has increased at a rate of 4.25% per year from 2009-2014. Combine this with dramatic, recent cuts in the Federal Food Assistance programs and it paints a picture of an underemployed, overworked, and hungry American Family.

If Ghandi was right, and “The True Measure of Any Society can found in how it treats its most vulnerable members” what does the U.S’s national lack of concern over the essential financial solvency of its most vulnerable workers say about it as a society?

 

If you, or someone you know has suffered from minimum wage issues, it is important that they immediately contact an experienced Minimum Wage Attorney.  A qualified attorney can help employees stand up for their rights and recover compensation for their lost wages. 

What Are U.S. Employees Most Thankful For?

November 20, 2014–  Next week, across the United States, loved ones will gather together and pause to take time to consider what they are most thankful for. People will reflect on their relationships, their loved ones, and their lives, as our nation celebrates Thanksgiving.

In the spirit of the Thanksgiving season OfficeTeam.com, via an independent research firm, conducted a survey of U.S. workers to discover what they were most thankful for at their places of employment. The survey, specifically, excluded an employee’s salary as a response with the anticipation that the gainfully employed would always be most thankful for having a job, at all. The results tell an interesting story, and create, perhaps, a guideline for employers to employee satisfaction programs that are not centered, solely, on monetary incentives.

The number one response for, almost, 1/4 of the respondents was “Friendly Co-workers“. In respondents between the ages of 18-34 years old this social component of a workplace environment captured 1/3rd of the top responses. For employees in the, over, 65 year old age bracket this category was tops, with, almost 50%, of the respondents. It seems that positive socialization was, clearly, a key factor in employee satisfaction and thankfulness across the country and across the age spectrum, perhaps, surprisingly, over a number of other work conditions.

In second place, employees were thankful for “good benefits programs“. The fact that this placed second may be a product of the fact that employees didn’t see this factor as valuable as the social environment in the workplace; however, it may also be a reflection of the fact that many of the companies surveyed didn’t have benefit programs at all, or, at least, ones worthy of thanks.

Additional thanks were recorded for an easy commute, supportive managers, flexible hours and some, miscellaneous, categories; however, none of these recorded gratitudes came close to the numerical results for the first two categories combined.

While it may be hard to draw too many conclusions from the results of the survey, it does seem to indicate that social factors ought to be a consideration of employers in examining their workplace environment. For full-time employees who spend, more than 1/2 of, their waking hours on the job, the social environment appears to bear considerable weight in an employee’s perception of their job and, most likely, on their productivity.

Creating a positive work environment is a win-win for employers and employees as it is no cost benefit program that makes employees feel better about their jobs. The complexity for employers is that it requires an uncommon level of complexity and attention towards hiring practices in order to illicit whether or not a prospective employee will fit into the corporate culture without engaging in discriminatory practices or rights violations. This is a delicate, but attainable, balancing act which most employers are not currently willing to embark upon; perhaps because they were, previously, unaware of how THANKFUL it would make their employees.

Happy Thanksgiving.