Raise the Minimum Wage? #SmartBusiness

money-money-money-21In some cases YES … In most cases NO. The idea that productivity will increase if you increase the minimum wage is ludicrous and I am not saying that you shouldn’t pay people fairly. You should pay people more than fairly for what they do, but why pay them for something they don’t do or are you suggesting a communist or socialist ideal?

So we need to do Smart Business and that means that each persons contribution should be measurable and they should be paid for what they actually do and not just paid because they were supposed to do something – which in many cases is the norm. Surveys from large consulting companies show that the average person is only 40 percent productive.

In most cases the justification is because some fat cat is earning a big salary – well that idea that people just earn money for doing very little is also changing rapidly and most of the studies I have mentioned are being applied to the top of the ladders first, as some studies have found that it costs a lot more than we seem to think to keep a top executive.

What is the Real Solution?

  1. LEADERS : We have established that most people are only 40 percent productive and this is mainly due to a lack of leadership or a leadership style that is self serving (serving themselves not the people). The leaders task is to look after the people by protecting them and having their best interests at heart, so that they can be as productive as possible (let’s say 90 percent at least).
  2. PRODUCTIVITY : Employees need to realise that when they are more productive, the companies they work for will be more productive, make more money and be able to pay more money. However let’s be realistic in most corporate environments only 2 in 10 people actually do what is expected of them. Managers are sometimes the cause of this as they tend to micro-manage (they want it don’t their way and not the best way – it’s a case of it’s always been done like that and that’s the way it needs to be done. Thus eliminating all innovation, creativity and job satisfaction.
  3. PAY : Get paid for what you actually do, not what you supposed to do. Everyone needs to start thinking like an entrepreneur (entrepreneurs only get paid for what they do, and more importantly they only get paid for solving problems). When you are the person or the team that provides the solution they need you and they pay you to make sure the job consistently gets done, and they pay you well because they would not make the money they do without you.
  4. JOB CREATION : Minimum wage ideas only mean less jobs, more entrepreneurs mean more jobs and the opportunity to work for something and that is better than nothing. Pay for productivity and rather set conditions for minimum quality standards, minimum deliverables and pay for work done – those who actually want to work will benefit and the lazy – well the lazy will always be lazy. Therefore give equal opportunities for those who wish to work. There is no free lunch and free ride.

Yes everything needs to change, starting with the way we think to the way we think we need to get paid. The main question we should be asking and thinking about is: Why do they pay me so much for what I do? Could I be paid more for doing this somewhere else? Sometimes the opportunities are where the opportunities are and not where we are.

So how are you earning what you earn? Can work harder or smarter? Can you add to the profit of the organisation you work for, or are you just there and feel entitled that they should pay you?

This is my opinion and I welcome your comments …

Photo credit: NickiMM / Foter / CC BY

About RichSimmondsZA

Retired but still Disruptive
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5 Responses to Raise the Minimum Wage? #SmartBusiness

  1. Bob Carpenter says:

    You’re right, Rich. In business every expense necessarily needs to contribute to increasing profits in order for the business, the job provider, to get ahead or even stay in business and continue to be a job provider. Unfortunately, among workers the status quo is “how little can I do and how much can I get for it.” That’s a problem usually traced back to leadership, as you said. Paying high wages for minimum production is not sustainable.

    Higher pay should be available as an incentive for workers to advance themselves. The sustainable reality is that additional value added if worthy of additional compensation. Minimum wage workers should focus on delivering more in order to get more.


  2. lebogang kopong says:

    This is really informative article, I am trying to figure out how it fits in a work environment where wages is not a matter of this person’s hard work but a matter of pay grades and where productivity is just a measure of someone else observation of your work. Managers in some organisations just say Job well done but wages remain the same, annual increases are the same as of those u know are not as productive, and incentives are just a matter of who is who’s favourite. Certain professions I thinks this doesn’t apply, like nursing. Minimum wages in certain work clusters should be raised.


    • RichSimmondsZA says:

      Hi Lebogang yes in certain professions I agree, however the problem is the lack of leadership (or simply just a selfish attitude of not caring for anyone else but themselves). We need real leaders who will see to it that people are recognised and rewarded for the good work done. Leadership is like parenting, it is nuturing for better performance – not demanding and expecting it!


  3. Jill Hazelton says:

    Spot on. Lack of leadership is extremely common and this affects so many people. In turn, this sends employees out to new jobs disheartened and suspicious of management’s intentions.

    Having said that, employees do need to try and understand what management is about. Read, learn, ask questions. Don’t just assume you know everything. If management are aloof, go and find them and ask questions, challenge them.

    40% productivity is so sad but doesn’t surprise me in the least! Is this stat based on survey in South Africa? Any idea about other countries?

    Thanks for interesting article.


  4. Great article Rich. You hit the nail on the head. Salaries and wages need to be tied to productivity and the role of a good leader is to ensure those under them are productive.

    In fact, a good leader who ensures everyone is productive is in fact, looking out for everyone’s survival.

    With enough production we might even be able to turn the economy around.


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