Needing More Than Good Wages

FOR TWO DECADES THE SUBJECT OF JOBS, or the lack of them, has come to dominate more and more of the public and political space. The conversation runs the range from no jobs, minimum wage jobs, to intriguing new discussions on living wage opportunities. The gold standard that everyone would prefer is employment with good wages – a depleting reality at present.There has been some movement on the issue, perhaps the most notable being Walmart’s raising wages for some of its lowest-paid employees in the U.S. It has been surmised that the retail giant made the move following the release of the book, The Good Jobs, by MIT professor Zeynep Ton 18 months ago. But rather than being encouraged by such initiatives taken by companies in recent months, Zeynep remains troubled.She acknowledges that the changes in Walmart’s compensation of its employees reflect an improvement, one that has resulted in a lower turnover rate among its workers. The main premise of her book, however, is that raising wages doesn’t go far enough unless employees themselves become investors. Speaking to the Atlantic recently, she observed that,

“A good job is more than just higher wages. A good job is also a productive job … If their jobs are designed in a way that doesn’t allow them to contribute that much, even hard work isn’t going to help very much. If you ask an employee to have a say in the selection and quality of a product, that person can contribute so much more. If you design a job so that a person can contribute more, you’ll need highly motivated, capable employees, and you can pay them a lot more.”

It’s an investment by the employer, she reasons. Provide your workers with more responsibility and a healthier work environment is created and your employees take on more value. Zeynep defines herself as an optimist and confesses she is hoping for a better future for companies, their investors, and their employees. She has been approached by numerous companies, intrigued as they are by her propositions, but she has yet to see them take her ideas seriously enough to alter the corporate landscape.On the other hand, she finds that startups and smaller businesses are implementing these concepts at a healthy rate. As with any other type of environment, changing the historic culture can be an ominous task, made all the more difficult by the refusal of companies to change what has proved successful in the past. Smaller companies, and those just beginning, don’t have to fight through all those weeds and can establish their working principles on a clean slate.Zeynep believes that the key to transforming the work culture is the direct attention of the CEO’s. “There needs to be a committed leader at the top of the organization … willing to believe that this is a long-term strategy that isn’t just based on some kind of quick return.”She then makes an intriguing observation: “One of the bigger obstacles is that a lot of companies are still making a lot of money through mediocrity. They offer bad service and bad jobs, yet they are still making money.” She believes that excellence is a lot harder to achieve in such a context.The only way to change that, naturally enough, is to treat your employees as well-paid investors, who will then provide better service. Her background isn’t in labour studies but in supply-chain management, so she carries a lot of authority in her outlook and words. She came to understand that if businesses continue with the mentality that labour is just a cost that they should attempt to minimize, then they have already lost their ability to connect with their customers. “A vicious cycle,” she calls it.With all the talk about worker compensation, along with the intriguing work being developed around the “living wage” concept, we are entering an era where a growing understanding of the costs of low wages is registering with the business community. As necessary as that is, if it isn’t matched with the belief that employees are also “investors” in the final product, then the business reformation will pass businesses by.“It is not that we have so little time but that we lose so much. The life we receive is not short but we make it so; we are not ill-provided but use what we have wastefully,” noted the philosopher Seneca. That is the true efficiency problem in the modern world of capitalism. To waste opportunity is a serious thing in the modern business world. To waste an employee is many times worse.