Amazon Raising All US Workers to a Minimum of $15/hr Is The Simplest Business Decision Ever...

In case you missed it, Amazon announced today that it would establish a $15/hr minimum hourly wage for all 350,000 of its U.S. employees.

The new pay threshold will go into effect Nov. 1 and impact all full-time, temporary and seasonal workers across the company’s U.S. warehouse and customer service teams as well as Whole Foods, the company said in a blog post. It did not disclose what its current minimum pay wage is for U.S. workers, perhaps in part because there is not one set rate. Jeff-bezos-

You can say that it's the right thing to do, but beyond providing a livable wage for employees, THIS IS THE SMARTEST THING AMAZON COULD HAVE DONE FROM A BUSINESS PERSPECTIVE.

Why is that? Because the Amazon effect is on the cusp of being like the Wal-Mart effect of a decade ago.  Remember that vibe?  Wal-Mart put small, local mom and pop shops out of business.  Then they were accused of providing bad jobs and poor working environments.

We all love Amazon Prime.  But Amazon is eliminating as many jobs as Wal-Mart.  They just aren't as visible as the mom and pops that went out of business a decade or two ago.  They're putting big box retailers, malls, strip malls and e-commerce shops out of business.  Why?  Amazon Prime.  We love it.  It's changing a lot of things.

Meanwhile, click on the links below to learn about some reports of working conditions at Amazon:

Workers at Delivery Services contracting to Amazon claim deplorable conditions

Amazon Execs Admit "Employee Cages was a bad idea"

With AI coming on the scene and more disruption on the way from Amazon, the decision to pay all workers a minimum of $15 should have been easy.

If you work for Amazon in Kentucky, you're feeling great today.  If you are based in California, you're probably asking "where's mine?"  If you work for a contractor of Amazon in delivery, it doesn't impact you.

Amazon's going to have the same PR issues as Wal-Mart did within 2 to 5 years.

This move made perfect sense.  Way to get ahead of the coming storm, Amazon.

 

 


Asking for Salary Info: Your Latest Rundown of Which States/Cities Have Bans

Ok, kids - we're up to 10 states and 8 municipalities that have outlawed/banned asking candidates questions about pay history.

That's a lot.  Kind of sneaks up on you.

The laws are aimed at ending the cycle of pay discrimination and some go further than merely banning pay history questions. A few also prohibit an employer from relying on an applicant's pay history to set compensation if discovered or volunteered; others prohibit an employer from taking disciplinary action against employees who discuss pay with coworkers.

The best running updated list is found here - at HRdive.  Go check it out.

h/t to Jason Cimno at Kinetix for sharing the resource!

 


Dice 2018 Tech Salary Report: Are Tech Wages Really Flat?

One of the best salary surveys that you will find from a vendor is the Dice Tech Salary Report.  See the 2018 version - released last week - by clicking here.

We're in a peak economic cycle, so surprisingly, the report finds that average tech salaries are flat, and have been for a couple of years now.  For many of you, it doesn't feel like tech wages are flat, does it?  (note, email subscribers enable images or click through to see graphs).  Here's your chart of average tech wages:

Dice1

But the survey confirms what we all know below.  If you want to steal a tech talent of ever average happiness from another employer, the most important thing is still MORE MONEY (see survey responses about what's most important to tech talent when changing employer below.  It's not the juice bar or your "culture"):

Dice2

But of course, the average for all tech skills isn't 93K, now is it?  Here's your top 10 paying skills/languages below, count how many you had ever heard of before for fun.  I got to 7, and note that just because these are the top paying doesn't mean that candidate volume is high.  

Dice3

Finally, the Dice survey confirms what we probably already knew - the best way for a tech guy/gal to get paid more is to <shudder> manage people.  Like sports, that probably means the people in your development shop that get paid the most aren't the people with the best coding skills, they're the people willing to put up with all the bull** from people and attempt to find the best path forward related to all the personalities.  Biggest jump in the graph below isn't to simply lead a team, it's to be a manager for a group of teams in a bigger development shop.  Note the jump from that level to being in charge of the whole thing isn't much.  I'd chalk that up to the fact that being a "head of department" in a smaller tech shop is the same thing as being a "manager of a group of teams.

Dice4

Great data here by Dice, put together from direct responses from over 10,000 tech pros.  See the whole report - released last week - by clicking here.

Raise your hand if you feel like wages are flat.  LOL.  I trust the data, but all pain is local, right?


Amazon Flexes Muscles, Eliminates Occupational Tax in Seattle in One Month....

Here's what power looks like in an employer, my friends...

Less than a month after unanimously passing a contentious tax on big business, Seattle’s city council has voted to repeal the so-called “head tax.” Against the fervent protestations of residents and local coalitions—which were extended to a full hour of testimony—council members voted 7-2 to pulled the plug on what would have been a vital source of support for city’s growing homeless population. 

Let me break that down for you: The city council unanimously passed the tax, then one month later repealed it.  What happened?  The city's biggest employer, Amazon, said "what up", flexed it's muscles and reversed the whole thing in a month. Drevil

Before breaking down what Amazon did and being awestruck by the raw power, let's learn more about the "head tax" that was proposed from Gizmodo:

In the form it was passed last month, the “head tax” would shave off $275 per full-time employee at companies generating over $20 million in revenue, totaling an estimated $47 million per year for five years. Those funds would then be earmarked for homeless services and affordable housing. Seattle declared its homelessness a state of emergency in 2015, with soaring costs of living and congestion of public services considered the foremost catalysts for the rising homeless rate.

The repeal comes a day after the No Tax on Jobs campaign—a coalition which large businesses which would be affected by the “head tax,” like Amazon and Starbucks, pledged significant financial support to—announced it had gotten over 45,000 signatures, more than enough to generate a referendum to overturn the tax in November. Speakers on behalf of No Tax on Jobs at the City Council chambers repeatedly described the coalition as “grassroots,” however the Public Disclosure Commission of Washington reveals it gave over $246,000 to a firm called Morning in America for “signature gathering and verification” and an additional $20,000 to Cre8tive Empowerment for “campaign/volunteer/social media management.”

Mayor Jenny Durkan described the quick legislative retreat as a means to avoid “a prolonged, expensive political fight over the next five months that will do nothing to tackle our urgent housing and homelessness crisis.” Critics saw the repeal as a backroom deal to appease Amazon.
 
Put another way, the city council of Seattle forgot who is really in charge in Seattle.  Cliff notes - it's Amazon!

Among other things, Amazon reacted to the head tax by halting construction of office towers in downtown Seattle (click link to read more), which caused some freak outs about Amazon potentially leaving Seattle, a prospect that is surely strengthened by the fact that the giant online retailer has 20 cities on a list of finalists for a second headquarters.

"Hell, we'll just pick two places instead of one" is the clear message.

My city, the ATL, is in the running for the second HQ, and the Seattle head tax teaches us one thing pretty clearly - Be careful what you ask for when Amazon comes to town.


THE WORLD'S SALARY CAP: Labor's Share of GDP Across the Globe...

Here's some deep thoughts for today.

If you're a professional sports fan, you know all about the concept of a salary cap, which is defined by Wikipedia as follows in sports:

In professional sports, a salary cap (or wage cap) is an agreement or rule that places a limit on the amount of money that a team can spend on players' salaries. It exists as a per-player limit or a total limit for the team's roster, or both. Several sports leagues have implemented salary caps, using it to keep overall costs down, and also to maintain a competitive balance by restricting richer clubs from entrenching dominance by signing many more top players than their rivals. Salary caps can be a major issue in negotiations between league management and players' unions, and have been the focal point of several strikes by players and lockouts by owners and administrators.

So what? The concept of a salary cap can be transferred to the business world in a couple of different ways:

1--Your company has a salary cap.  It's called the headcount budget, and the cap is all the budgeted money in that headcount budget.

2--Countries across the world don't have a salary cap, but they have something close - it's called Labor's Share of GDP.

What is Labor's Share of GDP?  It's defined as the following:

The wage share can be defined in various ways, but empirically it is usually defined as total labor compensation or labor costs over nominal GDP or gross value added.

The wage share is countercyclical; that is, it tends to fall when output increases and rise when output decreases. Despite fluctuating over the business cycle, the wage share was once thought to be stable, which Keynes described as "one of the most surprising, yet best-established facts in the whole range of economic statistics." However, the wage share has declined in most developed countries since the 1980s.

So add up all the compensation to labor, compare it to Gross Domestic Product (a measure of a country's economy), and you've got Wage Share/Labor's Share of GDP.  Which also serves as a floating salary cap of sorts for your country.

It's interesting to note that Wage Share/Labor's Share of GDP goes up and down and has been falling since the 80's in developed countries.  Take a look at these graphs from France, the UK and the USA from a paper on Labor Share in the G20:

Labor share

If you look at those graphs, you'll see the history of Labor share in those 3 countries, which also gives you some history to which national economies have endured the most change, which economies have a bigger safety net for labor in the midst of global change, etc.  France started at an 80% labor share of GDP and after a brief dip, is right back there.  The UK and the USA started a similar places, but safety nets in the UK have held the line lately at a 70%+ labor share, while the USA is in a bit of a free fall towards a 60% labor share.

Is that healthy for the USA?  Gordon Gekko would say yes, but rational, normal people would have to say no.  Thinking about all the changes that have occurred in our economy - global outsourcing, offshoring, tech deployment in place of human capital - and it's clear that we've been one of the most aggressive developed countries in those areas, and that's left our labor force with a much smaller share of our GDP, and likely has widened the gap between the "haves" and "have nots".

Note - I'm a moderate republican.  I'm not hating on the fact that America has less regulation than other countries - but - this type of change related to Labor Share of GDP has consequences for any economy/society over time.  You can't ignore that and it's worth being educated about the differences.

So America has a salary cap of sorts - call Labor's Share of GDP.  It's not a hard cap, it's been falling for a time and when you think about it from a sports perspective, it basically means this - in America, a higher percentage of the money in the economy goes to owners of capital rather than employees.

By the way, if you're wondering what labor's share of revenue (salary cap) is for American professional sports, a quick scan shows 47% in the NFL and 53% in the NBA.  Major League Baseball doesn't have a salary cap.

Mommas, don't let your babies grow up to be Cowboys - or unskilled labor.


How Your HR Coordinator Can Steal 200K From Your Company...

HR Coordinators who read my blog - don't do this.  No matter how dumb you may feel the person/organization you work for is, you'll eventually pay the price.

Of course, you'll have some nice vacations leading up to that.  You'll also probably have a nicer place as well.  In addition, wait... I'm off track.  An HR Coordinator in Hoover, AL has robbed a WalMart location of 200K across a span of three years.  More on this shifty coordinator from AL.com:

"A former employee of a Hoover Walmart is expected to plead guilty to defrauding the company out of more than $200,000. Angelia Steele entered an agreement with prosecutors in Otfederal court last week in which she will plead guilty to one count of computer fraud, court records show. She was also ordered to pay $201,488.96 in restitution.

According to a report by Alabama Media Group, Steele worked at the Walmart store in Hoover between 2000 and 2017 as a personnel coordinator. Between May 2014 and March 2017, investigators learned at least one assistant store manager's credentials were being used to approve time card adjustments for Steele's account, which added 10,681.52 hours of reporting pay to her payroll for that time period.

Court records show that in 2014, Steele added 939.6 hours for a total unearned income of $16,827.04; in 2015, she added 3,817.34 hours for $70,239.12; in 2016, she added 4,964.65 hours for $96,339.76; and in 2017 she added 960 hours for $18,083.04.?

How did this happen?  It's pretty easy to see.  It could happen in a lot of places:

1.  The coordinator was responsible for payroll.

2.  There's enough OT flowing through the location that the coordinator could use someone's sign in to approve OT for herself and due to the volume of OT, it was a small % of the total.

3.  She started slow. Then she realized no one was watching and got ballsier every quarter.

4.  The operations and HR leadership side was busy enough that they never had a reason to catch it.  It just slipped through for a long period of time.  I'm guessing the ballpark payroll for a Walmart Supercenter is in the range of 10M annually.  Do 10% OT and that's 1M.  That means her 16K and 18K numbers could slip through.  But the 70K and 96K numbers she put in for OT.  Savage.  Testing, 1...2...3.... Is anyone out there?  Anyone watching?

But as with all good things, the free OT party came to an end.  My guess is that the coordinator got tagged in a wave of change.  New leadership came into the store or HR (possible she was the primary local HR contact for the store in question) and said the following:

"What is up with the OT at this store?  Angelia, run a report for me of all employees over the last 3 years with their hourly rate, the total annual amount of normal pay, the total annual amount of OT, etc.  Need it in 10 minutes and want a stamp from the system.  You know what, I'll just walk with you back to your cube and you can run it for me then..."

At which point Angelia threw up at her desk.  And then went on a Leave of Absence - approved the same day!  By... you guessed it! The same manager she was using to approve the time cards with phony OT for herself.

She was trying to wean herself of the fraudulent OT and almost made it!  Single points of failure.  HR's not immune.

Read your OT detail quarterly, HR Leaders...


Bitcoin 401K Rollovers - What the #### Could Go Wrong?

This appeared in my gmail as a paid ad today (Email subscribers, click through to see the poison below):

Bitcoin_11

I'm not a financial advisor.  There's probably money to be made in Bitcoin, although the SEC has issued investor warnings.

The vast, vast majority of your employees aren't qualified to evaluate Bitcoin as an investment option.  When ads like this pop up, I'm assuming they aren't offering Bitcoin as a speculative 5% of someone's portfolio - I'm assuming they want to cram all 100% of that rollover in Bitcoin for various reasons that have to do with money.

Many of your employees have 401ks parked with a previous employer.  25% know about Bitcoin and are interested in the hype.  1/5 of those would consider this ad.

It's worth you getting in front of this with a HR comms piece -  to let people know that ads are rolling encouraging 401k rollovers straight into Bitcoin and there's some danger via the SEC.  

Respect the game.

 


Can the Young Star Ever Earn Less Than the Employees They Manage?

Capitalist Note - Got an email about this from a young gunner over the weekend, and sent her this post.  Felt like I should share again.  Cliff notes - you play to win the game, not win today.

-------------------------

In a word, yes.  It's rare, but it happens.

Here’s my take - most star managers on the upswing of their careers have usually faced the prospect of either managing someone who has either:

a) earned more than they have, or

b) earned close to what they have. 

It happens more often with rising stars who are relatively young in an organization, because they tend to aggregate additional responsibilities beyond their years.  You’re aggressive with the star within the definition of “aggressive” within your company, then the department of the star has to grow, you move people around internally to work for them and BAM!  You also experience the reality that in order to hire people with the skills to work for the young star in the growing department, those new hires need to come in at or around the salary you have the star at…

Is that a problem?  Many would say yes.  To anyone (this message is for you, young star) who finds themselves in that situation, I would say "have patience, young grasshopper".  If you are that star who finds themselves managing people who earn more or close to what you earn, you're right, there should be more of a divide.  However, note this - you got to where you are because you are viewed as a high, high potential asset to your company.  There's probably only one way you can mess that up if you continue to perform - by not handling the situation with class.

If you make it about the money, some people will chalk that up to maturity, and you might see theMo money upward arc of your career slow down a bit.  If you find a classy way to bring it to someone's attention without demanding any immediate action, I can guarantee you one thing: You're going to make a LOT more money than the people you're currently managing over the course of your career.
 
To the stars of the world who find themselves in this situation, I say: "Be the ball, Danny".  Don't let pride or some shortsighted advice from your Uncle Tommy drive your reaction to this situation.  You've managed to be different than everyone else to this point.  Keep being different. 

Play to win the game, not this possession.


Subscription-Based Org Charts Are an Interesting Recruiting Tool...

If you're a consumer of news, one of the things you've seen in the past is that there's a trend towards the best news outlets creating paywalls and trying to get you to pay for a digital subscription.  The game plan at the Washington Post, New York Times and other outlets is to give you something like 10 free articles a month on your phone, then stop access and make you pay.

Have you paid the fee?  Me either, but I'm always doing the math in my head if I should.  If the content is good enough (and maybe more importantly if the SEO moves the source to the Information top repeatedly), I'm always inclined to consider paying.  Another trend in digital journalism is to create a deep, deep coverage level of a small niche and then ask the readers with hyper interest in that niche to pay for the coverage.  That's the plan at a source called "The Information".  Here's a description of that news outlet:

Jessica Lessin, a 33-year-old former Wall Street Journal reporter, has created a tech news site, The Information, which could become a new digital model at a time when ad-supported Web news is in need of an economic lifeline. 

The Information has gained notice for its contrarian, old-school approach to digital news, which includes a no-joke $399 paywall, relatively scant attention to social media (at least when compared to other digital-first news sites), and a newsroom ethos that encourages reporters to write fewer, deeper stories, as opposed to a constant drip of quick, often thinly reported hits. The Information’s sweet spot is the serious pursuit of business news: Snap Inc.’s IPO plans, the boardroom travails at Uber, an investigation into the founder of Nest Lab.

I'm interested in The Information because there's a lot of interesting HR and recruiting stories in the valley.  In addition, one of the recurring features they have is basically underground reporting of the top 2-3 levels in any company, which is a bit of a an org chart on HGH - below is a picture of how they teased the org chart of the people who matter the most at self-driving car company, Waymo (click through if you don't see the image below):

TheInformationOrgChartDive

If you're a recruiter in a niche industry, my sense is that you would pay $399 a year for the an org chart like this every two weeks alone - to say nothing of the other features and deep reporting on an industry you're trying to rip talent from.

The question is whether sources like The Information can survive in a world of free.  See the box top left - $400 per month across 10,000 subscribers = 4M in revenue.


The Elon Musk Test For Whether You Deserve a Raise....

You're going to love this one...

In his 2015 book, "Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future," Ashlee Vance shares the story of how Musk stopped working with his longtime executive assistant in early 2014. Elon musk

According to Vance, the assistant, Mary Beth Brown, asked Musk for a significant raise after she'd been working with him for 12 years. In response, Musk told Brown to take two weeks off, during which he would assume her responsibilities and see whether she was critical to his success.

When Brown returned, Musk told her he didn't need her anymore.  

Whoops.  

OK, couple of things.  While Musk generally is on the record as saying this book is accurate he strongly denies the reporting of this encounter.  Brown also denies the reporting that she lost her job through the rigid efficiency study conducted by Musk.  Also, after Brown was no longer in the role, Musk says he needed the position, as evidenced by the fact he hired 2-3 specialists (PR, etc.) rather than a generalist executive assistant.

Still, where there's smoke, there's fire.  My take is that Musk probably did consider whether the position still worked for him based on the way his business has changed.

Add this to the list of things to be careful asking for.  The most common error employees make is taking an offer to their boss expecting a counteroffer.  The boss, rather than countering, wishes the employee luck in the new position.

Want a raise?  Interesting.  How about you take a couple of days off while I determine how vital you are to the organization?

Elon Musk.  The most interesting man in the world.