This is for two separate replies. Part A is the original and you must ** Reply to at least 2 of your classmates. Attempt to draw a parallel between your classmates threads and your own with respect to connecting back to your initial thoughts on strategic compensation and what you had hoped to learn.**
Part A is what I wrote
Part A and Part B = 125 word reply
Part A and Part B = 125 word reply
The most important issue surrounding compensation would be that of minimal wage. There are several things that can cause an uncertainty when it comes to compensation, but I feel that minimal wage changes are the greatest uncertainty facing many workers; especially workforce diversity and changes in the preferences of employers. The minimum wage is a cornerstone of the United States’ labor system, and has been a cutting-edge labor law topic among employers and workers alike for decades. One of the main negative impact is that it will cause an increase in unemployment among unskilled and low wage workers. Studies have shown that a 10% increase in the minimum wage caused a 1 to 3% reduction in employment (Dube et al., 2016). Over the years economists have studied the impact of minimum wage on fast food and other minimum wage industries with conflicting results. If there is a significant increase in the minimum wage it will have a negative impact on employment rates. This impact will be mainly felt in markets that have low skilled workers such as the food service, retail and entry level positions that require little to no education or training. Gittings & Schmutte (2012). There are so many views for and against the debate of increasing the minimum wage but it should be mandate by the federal government for all states to increase their minimum wage. Pay rates should match the cost of living in each state so that the low-income workers can better provide for their families ultimately reducing income inequality. Raising the minimum wage is a crucial step in having an economy that is beneficial for everyone not just the wealthy.
Minimum wage has remained static in the United States since 2009. However, inflation has increased roughly 22% since then. This means the buying power of $7.25 in 2009 is equivalent to $8.85 in 2020. Although it seems logical that minimum wage should keep up with inflation, modern technology has made the equation far more difficult.
Automation has become more evident in nearly every aspect of American life. The cost of the technology has been decreasing while the efficiency has increased. Lordan & Neumark (2018), find that increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers, and increases the likelihood that low-skilled workers in automatable jobs become nonemployed or employed in worse jobs (p. 42). Former McDonald CEO, Ed Rensi, bluntly stated that if minimum wage were increased to $15 an hour, there would be massive layoffs and workers would be replaced with machines (McDonald’s Reacts, 2016). In some ways, the CEO was being honest. However, the world is already headed in that direction; technology will continue to improve and costs for that technology will decline.
Another interesting effect of increasing minimum wage is the overall buying power of money. Bourque (2020) believes when we increase their costs, they have to raise their prices. Although employees may get a raise, their cost of living increases will provide a net gain of zero or even less (p. 12). Additionally, those increased prices could drive customers away. Many businesses, especially within the food industry rely on slim profit margins. The decreased revenue, compounded with the increased overhead could cause many companies to fail completely.
The five important issues that will shape compensation professionals work for years to come include increase to the federal minimum wage rate, trends in performance appraisal, compensation-productivity gap, gender pay gap, and pay transparency. All five of these issues are very important parts of a compensation professionals career. They must all be taken into consideration when being responsible for others compensation plans and handling the pay of employees. I believe the issue that raises the greatest uncertainty for compensation professionals is gender pay gap. This will consistently be a concerning topic and an issue in our society. As compensation professionals will be faced with dealing with the gap in pay as they set the pay for the different genders as they hire new talent and are faced with the difficulty of fair pay and ensuring fair pay within the workforce. Gender pay gap is continuously discussed in the world today in many different avenues and in the public sectors in an attempt to understand why there is a pay gap amongst genders in the workforce (Martocchio, 2020). It is not fully understood as to why there is a gap in pay still to this day as the world has moved to a greater acceptance of women in the workforce and the movement of feminism. One option to ensure equal pay is to provide equal pay for equal work no matter the gender (). Another option is comparable pay for comparable worth (Martocchio, 2020). This option is a debatable option as it insinuates not all genders perform the same level of output of work. The consistent issue that is found with gender pay gap is no matter what the process is, women pay is consistently lower than male pay. The arguments of comparable pay for comparable worth do not align as a job description for a woman can be the same job description for a male, yet he will receive a higher level of pay than the woman will receive. The job duties will be the same and the level of output will be equal, and the woman may even produce a higher level of output, yet the gender makes all of the difference. Gender pay gap has improved over time. However, research shows that women still earn twenty percent less than men (Grove, Hussey, & Jetter, 2011). Research has dug deep into attempting to understand why women are paid less than men. Society continues to put pressure on the idea that women with the same education, skills, and work experience are paid less than men. Research shows otherwise, explaining that it is less about discrimination and more about a lower skill set, a lower education level, and less work experience (Grove, Hussey, & Jetter, 2011).