Kathleen Dollison
Low Income Wages, Effects it has on Society
Siena Heights University
MGT 360--Human Resource Management
Dr. Ball; Winter, 2015
Income is a very big part of an employee’s life not only for how much they are making, but it also affects their family life. In 1999
the national minimum wage was introduced to help the people that are making the lowest wages hourly (Butcher 2005). This was to
help the lowest paid people, while the people who were making more than hourly wage still got increases as well. When this was
introduced the minimum wage did continue to go up, just not as much as people had assumed it would (Butcher 2005). The good part
about minimum wage was that the people making the lowest amount were now making more. The hard part is that families have a
hard time making it by with only making that little amount. In today’s society things are so expensive that it is hard for a family to
make it by. Many places will find that an employee is willing to leave their current position so they can make more, even if it is just
for a few more dollars. This is something that could be very important for a company if they want to keep employees around and
show that they do not have high turnover rates.
One thing that some companies have tried to keep employees happy is flexible work schedules. So the employees can keep their
family and work lives balanced. The only problem with this is that they are going to take hourly wage cuts (Swanberg, Jennifer 2005).
The good thing is that employees are happier and may work harder when they are working. The company also saves money on
wages. There was a study done on this and they found that even though employees were taking a small pay cut the fact that they
have flexibility to be with their families and management had to understand that they had a good relationship (Swanberg, Jennifer
2005). This also meant that people were working harder and that for certain companies it was just what they needed. So in this case
it was not so much about the lower wages that they were taking, but the fact that the stress had gone down about balancing both
work and family life was enough to keep employees happy. On the other end of this there also is the psychological factor that wages
can have on an employee. Some studies have shown that this can cause self-esteem issues and that can make a worker not work as
hard or can make them stressed at work (Goldsmith, Arthur H 1997). This is something that has been looked at to see how much of a
factor it can have on an employee. It is something that seems to affect age and gender. It seems that it is something that many
employees think about and they have self-esteem issues that can really affect their work (Goldsmith, Arthur H 1997). This is why it is
important to make the extra effort to make sure that employees are happy and maybe giving them just a little more hourly can help
them work harder. This will not only keep employees at work happy, but it will help them keep employees at their job.
“In efficiency wage models, firms choose to pay high wages to reduce turnover, eliminate shirking, increase morale, or in other
ways enhance productivity (Carter, Thomas J. 2012)”. The thought that some companies have is that if higher wages are given than
the output of production will be higher. There also would be less turnover and employees would generally be happier at work. This
is something that was not proven fully, but there is some correlation between the two. The one thing that the paper did find is that
wages are not too high, they are actually too low (Carter, Thomas J. 2012). This is something that can make for less output and can
make unemployment rates go up because the companies cannot afford to keep people working. People are not going to keep
working if they feel they are not being paid what they should be and they are not going to stay with that company.
One study examined how employees felt about their wages and how it makes them work. “They found that employees are less
likely to quit, are more satisfied with their pay, and report that they work harder than they have to (Levine, David I. 1993)”. This is
one way to help with employee satisfaction and make sure that the organization does not have higher turnover rate. This is
something that is very important in order for a place to show their customers or patients that they have a good organization. It also
would keep production going and keep from having such a high unemployment rate.
There is one examination out there that says that higher wages does not help with production. It states that a human can only
produce so much and paying someone more does not mean that they can always do more (Ryska, Pavel 2012). In their conclusion,
however, it was proven that for some places the higher wages did pay off. For Ford the higher wages showed an outcome of more
production daily by the employees. This paid off for them because they were able to produce more and keep the employees happy
(Ryska, Pavel 2012). For other places this may not be the case. As for maybe a place that is more based on sales or medical
organizations that may not come out with the same result. So this study finds that like many things it is a case by case situation and it
is hard to generalize every company into the same thing.
Another way to look at things is to give incentives for retirement and to make sure that employees will be satisfied with their
benefits. For some companies they may not be able to give the best wages, but they can have other ways to help employees out with
their future. Some companies are trying a different way and giving employees better retirement and pension (Lazear, Edward P
2014). They found that this makes up for the fact that they may not be getting the wages that they were hoping for. The down fall is
that many people want to retire quicker or they work longer to get their pension better (Lazear, Edward P 2014). Even with those
things happening it still showed that workers worked harder and were more likely to be loyal to their current place.
In the Human Resource book it discusses in chapter 6 about wages and how organizations should come up with the right package.
It talks about having the right package for each candidate and having evaluations to see if that employee will get better pay (Dias, L.
2011). This is something that is very important to not only the employee, but also to what the company wants. Like the book talks
about there are certain philosophies that each organization is going to have and it is important to stick to what is wanted.
I think based on my research and what I have found from it there are many things to think about when we look at wages. Not only
do higher wages make employees happy, but it can also help the economy because people will not only keep their jobs, production
will be up, but they will also be more likely to spend their money in the economy. So many people leave their job because they are
unhappy or they feel they deserve more and having an employee give a little more is all it might take. I did find it interesting that
there are other ways than just giving wage increase. There can also in incentives for retirement and pensions. These are things that I
liked to see are being explored by more companies. I think it is important to show loyalty to not only the employer, but the employer
to show it to their employees. There are many companies out there right now trying to do better to keep employee wages up and
production up so maybe they will not have such high unemployment rates. In conclusion the economy and wages are greatly related
and affect each other so it is very important to keep both things equal.
Low Income Wages, Effects it has on Society
Siena Heights University
MGT 360--Human Resource Management
Dr. Ball; Winter, 2015
Income is a very big part of an employee’s life not only for how much they are making, but it also affects their family life. In 1999
the national minimum wage was introduced to help the people that are making the lowest wages hourly (Butcher 2005). This was to
help the lowest paid people, while the people who were making more than hourly wage still got increases as well. When this was
introduced the minimum wage did continue to go up, just not as much as people had assumed it would (Butcher 2005). The good part
about minimum wage was that the people making the lowest amount were now making more. The hard part is that families have a
hard time making it by with only making that little amount. In today’s society things are so expensive that it is hard for a family to
make it by. Many places will find that an employee is willing to leave their current position so they can make more, even if it is just
for a few more dollars. This is something that could be very important for a company if they want to keep employees around and
show that they do not have high turnover rates.
One thing that some companies have tried to keep employees happy is flexible work schedules. So the employees can keep their
family and work lives balanced. The only problem with this is that they are going to take hourly wage cuts (Swanberg, Jennifer 2005).
The good thing is that employees are happier and may work harder when they are working. The company also saves money on
wages. There was a study done on this and they found that even though employees were taking a small pay cut the fact that they
have flexibility to be with their families and management had to understand that they had a good relationship (Swanberg, Jennifer
2005). This also meant that people were working harder and that for certain companies it was just what they needed. So in this case
it was not so much about the lower wages that they were taking, but the fact that the stress had gone down about balancing both
work and family life was enough to keep employees happy. On the other end of this there also is the psychological factor that wages
can have on an employee. Some studies have shown that this can cause self-esteem issues and that can make a worker not work as
hard or can make them stressed at work (Goldsmith, Arthur H 1997). This is something that has been looked at to see how much of a
factor it can have on an employee. It is something that seems to affect age and gender. It seems that it is something that many
employees think about and they have self-esteem issues that can really affect their work (Goldsmith, Arthur H 1997). This is why it is
important to make the extra effort to make sure that employees are happy and maybe giving them just a little more hourly can help
them work harder. This will not only keep employees at work happy, but it will help them keep employees at their job.
“In efficiency wage models, firms choose to pay high wages to reduce turnover, eliminate shirking, increase morale, or in other
ways enhance productivity (Carter, Thomas J. 2012)”. The thought that some companies have is that if higher wages are given than
the output of production will be higher. There also would be less turnover and employees would generally be happier at work. This
is something that was not proven fully, but there is some correlation between the two. The one thing that the paper did find is that
wages are not too high, they are actually too low (Carter, Thomas J. 2012). This is something that can make for less output and can
make unemployment rates go up because the companies cannot afford to keep people working. People are not going to keep
working if they feel they are not being paid what they should be and they are not going to stay with that company.
One study examined how employees felt about their wages and how it makes them work. “They found that employees are less
likely to quit, are more satisfied with their pay, and report that they work harder than they have to (Levine, David I. 1993)”. This is
one way to help with employee satisfaction and make sure that the organization does not have higher turnover rate. This is
something that is very important in order for a place to show their customers or patients that they have a good organization. It also
would keep production going and keep from having such a high unemployment rate.
There is one examination out there that says that higher wages does not help with production. It states that a human can only
produce so much and paying someone more does not mean that they can always do more (Ryska, Pavel 2012). In their conclusion,
however, it was proven that for some places the higher wages did pay off. For Ford the higher wages showed an outcome of more
production daily by the employees. This paid off for them because they were able to produce more and keep the employees happy
(Ryska, Pavel 2012). For other places this may not be the case. As for maybe a place that is more based on sales or medical
organizations that may not come out with the same result. So this study finds that like many things it is a case by case situation and it
is hard to generalize every company into the same thing.
Another way to look at things is to give incentives for retirement and to make sure that employees will be satisfied with their
benefits. For some companies they may not be able to give the best wages, but they can have other ways to help employees out with
their future. Some companies are trying a different way and giving employees better retirement and pension (Lazear, Edward P
2014). They found that this makes up for the fact that they may not be getting the wages that they were hoping for. The down fall is
that many people want to retire quicker or they work longer to get their pension better (Lazear, Edward P 2014). Even with those
things happening it still showed that workers worked harder and were more likely to be loyal to their current place.
In the Human Resource book it discusses in chapter 6 about wages and how organizations should come up with the right package.
It talks about having the right package for each candidate and having evaluations to see if that employee will get better pay (Dias, L.
2011). This is something that is very important to not only the employee, but also to what the company wants. Like the book talks
about there are certain philosophies that each organization is going to have and it is important to stick to what is wanted.
I think based on my research and what I have found from it there are many things to think about when we look at wages. Not only
do higher wages make employees happy, but it can also help the economy because people will not only keep their jobs, production
will be up, but they will also be more likely to spend their money in the economy. So many people leave their job because they are
unhappy or they feel they deserve more and having an employee give a little more is all it might take. I did find it interesting that
there are other ways than just giving wage increase. There can also in incentives for retirement and pensions. These are things that I
liked to see are being explored by more companies. I think it is important to show loyalty to not only the employer, but the employer
to show it to their employees. There are many companies out there right now trying to do better to keep employee wages up and
production up so maybe they will not have such high unemployment rates. In conclusion the economy and wages are greatly related
and affect each other so it is very important to keep both things equal.