Wage Compression Poses A Financial And Management Challenge For Employers

870 Words May 9th, 2016 4 Pages
According to the Wall Street Journal article, “wage compression poses a financial and management challenge for employers.” (WSJ, 2016) While New York and California already approved minimum wages increases to $15 an hour, other cities are considering the same measure. The minimum wages increase has raised tension not only to the veteran but other experienced employees as well. Many of them feel unhappy because they spent months and even years striving to establish higher wages. “They felt that they were not able to get compensated for what they learned.” (WSJ, 2016)
Since the company cannot raise everyone salary, this has been a difficult issue for manager and business owner to tackle.
With the recently increased wages at Gap and Wal-Mart, store managers had to address employee questions on fairness and pay. Pay inequality has always been a sensitive subject and manager needs to respond in careful manners otherwise; it can cause disruptive workplace or employee leaving the company. A current sale associates at Gap said the pay hike prompted her to look for other work. She has been working for Gap since 2013 with starting salary of $9.25 per hour and eventually work her way up for small raised in 2014. She had hoped to earn $11 by 2015, but instead, she was given $10 an hour in June, same as the new employees. She asked, “Where’s is the reward for some seniority?” In 2014, when Gap announced that it will raise pay to the minimum wage of $10 for more than 60,000-hour…

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