Inflation and the Responsibility of an Employer

[BraggSurvivor]

Is it the responsibility of an employer/should it be the responsibility of an employer to compensate his employees for national currency inflation/devaluation through a wage adjustment - as a matter of course?

Your thoughts or comments?

[Sam Reeves]

Do you mean COLA?

[Rick]

It sort of depends on the company's financial position doesn't it?

[crashdive123]

Is it the responsibility of an employer/should it be the responsibility of an employer to compensate his employees for national currency inflation/devaluation through a wage adjustment - as a matter of course?

Your thoughts or comments?

The short answer is no. It is the responsibility of the employer to run a successful and profitable company. That being said, the employer has to provide a job and working conditions that attract and retain employees and keep them from leaving for "greener pastures".

[Alpine_Sapper]

It's the employer's responsibility to ensure the wage and benefits he pays will provide a sustainable comfortable life for his employee's at that skill level.

[Rick]

Alpine. Are you kidding? The employer has only one responsibility, to ensure a reasonable rate of return for his investors. If he is a sole proprietor then the investor is him. The rest is controlled by the market place. The employer doesn't owe you anything. If you don't like the wages or benefits then go some place else.

I would certainly agree that proper ethics would direct an employer to do as you suggest but it is in no way a responsibility.

[BraggSurvivor]

*<looking into a crystal ball>*

I am an employer. When jobs were plentiful and the more shiftless of the bunch demanded raises, no one was around to help me out.

If you will guarantee me that I can raise the prices I charge to the customer base and NOT suffer a drop in revenue because of price elasticity of demand for my product, I will guarantee such a wage adjustment.

As there has been no such repeal of this particular economic law, I cannot make such an adjustment without risking going in the red and ultimately out of business.

Ae we going to reach a point where people are grateful just to have a job?

[dragonjimm]

Don't go around saying the world owes you a living. The world owes you nothing. It was here first.
Mark Twain

[Alpine_Sapper]

Alpine. Are you kidding? The employer has only one responsibility, to ensure a reasonable rate of return for his investors. If he is a sole proprietor then the investor is him. The rest is controlled by the market place. The employer doesn't owe you anything. If you don't like the wages or benefits then go some place else.

I would certainly agree that proper ethics would direct an employer to do as you suggest but it is in no way a responsibility.

@Dragonjimm - I never said anyone owed me anything except what I've worked for and was agreed upon before hand. Read the following if you want an explanation.

@Rick - No, I'm not kidding. You can see it however you want, but the reality of the situation is the employer is responsible for the people that take care of him. Like I said, at each skill level the wage and benefits have to equal or exceed what the current standard is, or you won't have quality people to help you succeed. You want loyalty, honesty, integrity from your employees? You want them to give 110%? Make sure their compensated. You want to be a cheap skate miserly asshole? You have people who can't get employed anywhere else working for you. That's fullfilling your responsibility to your investors...To make sure you compensate well enough that you can retain QUALITY people.

And if I put in 40 hours a week busting my *** for someone, how can you say they don't owe me anything? They owe me my wages, and my benefits that were negotiated, and if they don't give it to me, it's going to be a lawsuit.

[Alpine_Sapper]

I just went back and re-read Bragg's original post, and I probably came off as unclear...

My current employer has not raised our wages in light of the economic crisis. In fact, our health benefits went up ~$5/month for each plan. wow. Big crunch. But what they did do is reconfigure the bonus structure so there is actually a possibility that we can still recieve a bonus in the current crunch. That's what I was talking about. Was it over the top? No, it was just enough to show us they care about the people they have working for them and they haven't forgotten about us, and they understand some of us may be struggling.

In my opinion, it is the employer's responsibility to do that kind of stuff for their employee's, or they will go somewhere else.

[Chuck]

The employer owes you just what was agreed upon you were hired and in those dollars period. If that isn't enough to support the lifestyle you want get a second job. There has been many times I've taken a second job to something I wanted. Anytime you take someones money you owe them your loyalty. I wouldn't trust an employee if I had to buy their loyalty.

[Rick]

I agree with everything you said except the word "responsibility". You are correct, union or not, you enter into an agreement with an employer. You exchange your time, talents and knowledge for some form of renumeration. Beyond that, the employer is only responsible to make a profit. Either as a return on investment for the shareholders or to reduce owner's equity if he owns the company (with the exception of businesses that have an eleemosynary purpose such as hospitals or schools). Everything else becomes a "social responsiblity".

I work for Alpine Brewery making Sapper beer. I'm a fork lift operator on the dock and I make $10 an hour. I also have a major medical plan that covers catastrophic illness only. It costs me $130 a month for the family plan and it does not cover dental or eye glasses.

I walk into your office, drop a printout on your desk and say, "I saw your posting on WSF last night and to be honest, I can't make ends meet at $10 and hour and I think the medical program costs too much for what I get in return."

What are you going to say?

What would you say if I were your brewmaster making $30 an hour? Or your Sales Manager making $100 per hour. You see the dilemma you encounter?

Social responsibilities can only take place in a company that has a sound financial basis and a growing revenue. If the true responsiblity of making a profit isn't realized then nothing in the social responsiblity realm can occur because the business can not sustain itself.

[Alpine_Sapper]

The employer owes you just what was agreed upon you were hired and in those dollars period. If that isn't enough to support the lifestyle you want get a second job. There has been many times I've taken a second job to something I wanted. Anytime you take someones money you owe them your loyalty. I wouldn't trust an employee if I had to buy their loyalty.

Any employee you're paying you're buying they're loyalty. Otherwise, why would they be there? Because they like you as a person and want to work for free?

That's just retarded. If I work for you for 5 years, and you're still paying me the same wages, and when i come to you and tell you that I need a raise, and you hand me that line of crap, you're gonna be swallowing your teeth, man. And i don't owe anyone loyalty because they gave me money. I owe them loyalty because they treat me fairly and show that they are loyal to me, as well. When the wages the company pays falls below the industry standard for my qualifications, I'm gonna go where I will be fairly compensated for the work that I perform. Not only do I expect time-baised raises of at least 5%, I also expect assest raises as my skillset grows and I get the documentation to prove it.

I paid good money to learn a specialized skill set not just anyone who can perform manual labor can do. Hell, before to much longer I'll hold a certification that has only been granted to 117,000 people WORDLWIDE. If you want my loyalty, and the skillset that I bring to the table, you have to compensate me.

[Beo]

It all depends on the type of employer, doesn't it? Private Company, Local Government, State Government, or Federal Government jobs. Private meaning like working for P&G or GE, a car dealership, or heating & cooling company, krogers, or cable tv or what have you. But in government jobs meaning police, fire, hospitals, electirc company, sanitation or whatever kinda jobs... I believe government jobs have a right to a cost of living raise to its employees.

[Alpine_Sapper]

I agree with everything you said except the word "responsibility". You are correct, union or not, you enter into an agreement with an employer. You exchange your time, talents and knowledge for some form of renumeration. Beyond that, the employer is only responsible to make a profit. Either as a return on investment for the shareholders or to reduce owner's equity if he owns the company (with the exception of businesses that have an eleemosynary purpose such as hospitals or schools). Everything else becomes a "social responsiblity".

I work for Alpine Brewery making Sapper beer. I'm a fork lift operator on the dock and I make $10 an hour. I also have a major medical plan that covers catastrophic illness only. It costs me $130 a month for the family plan and it does not cover dental or eye glasses.

I walk into your office, drop a printout on your desk and say, "I saw your posting on WSF last night and to be honest, I can't make ends meet at $10 and hour and I think the medical program costs too much for what I get in return."

What are you going to say?

What would you say if I were your brewmaster making $30 an hour? Or your Sales Manager making $100 per hour. You see the dilemma you encounter?

Social responsibilities can only take place in a company that has a sound financial basis and a growing revenue. If the true responsiblity of making a profit isn't realized then nothing in the social responsiblity realm can occur because the business can not sustain itself.

I see your point, and agree. Those decisions are going to be based on where his pay is at with the industry standard, and how he performs as an employee. Is he the best forklift operator we have? Can we afford for him to go somewhere else? Forklift operators are normally paid $12/hour...Is he worth paying the industry standard, or would the cost of training be worth letting him go elsewhere where they will compensate him fairly, and I pay some tradeschool kid who can drive a forklift $10/hr who'll be glad to get the pay raise from minimum wage, and will be able to be molded into an employee worthy of $12 an hour?

but as long as the company is doing well, if you want to continue doing well you have to take those social factors into account if you rely on employee's. If you have 5 people and can run the business by yourself if you have to? Let'em leave if they want. But if you can't run your business without your employees, you have to make sure they can survive, because if they can't, they will go elsewhere, and then not only do you have to hire new people who don't know the ropes and your company is going to lose money, you're also out the training cost of bringing those people up to speed.

[Rick]

Man. Good luck on those raises. I can tell you 2.5% to 3.0% is about the norm. And not many companies offer a raise for the successful completion of a class. If you have an employer that delivers those, stay with them because not many do. Especially in today's environment.

Just a bit of inside scoop for everyone. Have you ever gone to a job fair in hopes of landing a job? Ever filled out the applications that say, "What is your current salary?" followed by something like "Salary must be filled in to be considered for employment."?
Many companies attend job fairs solely for market research with no intention of offering jobs. They collect the salary data to determine where they are in relation to the industry. It's a cheap and very effective tool to find that out. It let's them know if they are paying their employees too much, too little or if they are on target.

I don't mean to imply that all companies do that or the only reason companies participate in job fairs is for research but you need to be skeptical of those requiring salary input to be considered. Just a bit of info you might be able to use. That might also be the reason you didn't get the call you were waiting on.

Another thing to consider is your credit score. More and more companies include your credit score in their back ground research on you. If you are not able to handle your finances in a responsible manner then you probably won't make them a good employee. So goes the theory.

[Rick]

Alpine - Agreed. It's terribly expensive to release an employee for any reason once they have surpassed the job's learning curve. You've invested time and money in training them so it's often less expensive to offer them a raise to keep them than it is to hire a replacement and suffer through the learning curve again. Many managers/owners focus only on the loaded rate per hour and don't realize the lost productivity costs associated with letting an employee go elsewhere.

Curious Beo, why do you think government jobs deserve a COLA? I'm not disagreeing just interested in your reasoning.

[Sam Reeves]

It's the employer's responsibility to ensure the wage and benefits he pays will provide a sustainable comfortable life for his employee's at that skill level.

Obviously you have never been self employed and employed other people. It's the employer's responsibility is to pay himself first.

[Beo]

Well lets take my job as a Deputy Sheriff for instance, you want me to scoop up all the crap bags running around the county but as the cost of living goes up you wanna pay me less than I need to live on for putting my life on line. Now I got 16 almost 17 years in so unless I really screw the pooch you can't just fire me, my FOP contract says I get a 3% 1st year, 3% 2nd year, and 4% the last two years of the 4 year contract but this year they say no raises for anyone in the county as the budget won't afford it. So how will the contract go? You gotta give me rasie or else who's gonna patrol the county and city? My training is to valuable to just get rid of, they've spent thousands of dollars on training me and still are (I'm on the hazmat team, SRT, a defensive tactics and taser instructor, and fugitive recovery team), they want me to work long extended hours of 14 to 16 hour work days and not give me cost living raise since the president screw'd the econemy and its going into the crapper.
Police, Fire & EMT, Hospital, and other emergency personal should get at the minimum a cost of living raise.
Just my humble opinion.

[Alpine_Sapper]

Obviously you have never been self employed and employed other people. It's the employer's responsibility is to pay himself first.

And obviously you don't know anything about me. I have my own company, and I make sure the people that help me run it are compensated as fairly as I am. without them, it wouldn't exist.