Fix My Job: Compensation

It’s a fact: Income inequality in the United States is more dramatic than ever. A typical CEO, for example, now earns more than 380 times the salary of an average worker.¹ If your paycheck feels like it’s shrinking instead of growing, it’s not just about you, or even your employer. It’s a nationwide problem – in private companies, at mega-nonprofits, and even in the public sector – that’s sapping the American middle class, undermining consumer purchasing power, and hurting our economy. 

How to boost your paycheck

Income inequality in America is a serious social problem that no one can solve alone. But that doesn’t mean you can’t make a difference. To raise our pay, American workers will have to raise our voices, to let our bosses know we’re not satisfied with skimpy compensation. There’s no reason you and your co-workers can’t be part of the chorus.

1. Got a union?  If you work in a unionized workplace, pay rates are part of a negotiated contract and typically set according to seniority, job assignment, work experience, and other objective factors. If you think you’re getting paid less than you are due under your contract, talk to your union rep.If you and your co-workers are concerned about low pay and you don’t have a union, maybe it’s time to consider creating one. Do you look forward to asking your boss for a raise? Probably not.  He or she can always tell you to take a hike – and there’s a good chance that if you do, somebody is waiting to take your place.But if a whole group of you is doing the asking, it’s a different story – and it usually has a happier ending. According to the U.S. Bureau of Labor Statistics, union workers earn an average of $943 a week, some 27 percent more than the median earnings of nonunion workers, who bring home $742 a week. Health care, pensions, vacation, and other non-cash compensation is also typically greater for union workers.  
2. Get together:  A lot of people don’t know this, but you don’t have to be part of a union to raise complaints with your boss.One way to deal with low pay is to compete with the person in the next cubicle and try to figure a strategy for getting higher pay than him or her. A different approach is to cooperate with your co-workers. Share your concerns about your low paycheck and see if anyone else is having the same problem.You’re in a much stronger position if you approach your boss as a group, instead of one at a time, to talk about salaries and wages. For one thing, he or she can’t tell all of you to take a hike. Also, whenever you take action as a group, you’ve got more legal protection than when you go out on your own.
3. Get the facts: Before asking for a raise – either by yourself or in a group – you probably want to know something about the finances of your organization. Did company profits or your agency’s budget go up or down this year? Did the CEO and other executives get raises or bonuses? What are conditions like in your industry or profession²?It’s also worth finding out how your pay compares to that of others who do the same work in your area. You can start by talking to your co-workers or to others doing similar jobs in nearby workplaces. People don’t always want to say much about how much they earn, however. And what they do say might not be accurate.The U.S. Bureau of Labor Statistics, luckily, has a section of its website where you can enter where you work, your occupation, and other factors to find out typical wages for a variety of occupations. If you’re underpaid compared to your peers, it will strengthen your case when you talk to your boss. 
4. Unfair vs. illegal: It might be unfair if other people at work are getting paid more than you, but it’s not necessarily illegal. Employers are allowed to consider work experience, education, job skills, and other factors when setting pay and benefits. But they’re not allowed to treat you differently than others doing the same job because of your race, religion, gender, ethnicity, or other factors. If you think this is happening to you, check the Fix My Job entry on discrimination. And if your paycheck is short because you’re not getting credit for all the hours you’ve worked or you haven’t been properly paid for overtime, that’s also illegal. See Not Getting Paid for Hours Worked and Stealing Tips or Wages for more info.

Useful Links

Labor union website: AFL-CIO Executive PayWatch, at AFLCIO.org

Government agency: “Unions 2012,” press release from U.S. Bureau of Labor Statistics

Government agency: National Compensation Survey, at U.S. Bureau of Labor Statistics 

Is your paycheck feeling small these days?

• Maybe you’ve noticed that at the end of each month, after you pay your rent or mortgage, buy groceries, and pay your phone, cable and utility bills, there’s nothing left (or next to nothing).
• Or maybe you’ve noticed that the guy or gal in the cubicle down the hall, or working in the classroom next door, or standing with you on the assembly line, is making a lot more than you.
• And what if none of the workers at your workplace has received a raise for what seems like forever…while the execs at your company have been snagging double-digit bonuses on top of their already hefty salaries?

¹The differential is a lot smaller in other countries and used to be smaller in the U.S., too. In 1980, for example, the typical U.S. CEO earned about 42 times the pay of the average blue-collar worker.

²AFSCME, the public employees union, has useful resources online for getting information about both public and private employers.