Here starts a long, semi-embellished rant: Businesses appear in general to be run on a “Me-First” or Pay Yourself First Principle. By this ground rule, the Owners and next, Executive Management are the first to take what they want from the income of the business: the next level gets what they want, as long as it does not jeopardize what those at the top can take and so on down the line to the minimum wage earners. Today employers tend to keep a newly hired employee within the level of that worker’s previous job or close enough, if hired into an equivalent position. As such businesses try to become competitive by holding the pay scales stable. This is how I think the compensation process developed historically.
Early in the life of companies each one tried to figure out the maximum amount of money the highest level or executives can take with enough left over to entice the lowest earners to accept that wage and keep the company viable. Clever thinking at the highest levels figured out how to standardize this principle so the money will be enough to satisfy enough people to continue to take the bait; and they shared this information among their high level colleagues in other businesses. As the years rolled by, these practices became the way to practice business. A bonus is the left over money after the now standardized compensation model has been applied. This too was applied using the same principle of paying the leaders first except that the name varied between incentives, bonus and raise, depending on actual or projected left over money.
Sometimes it is a challenge to keep the upper levels to what they are accustomed when government regulations or union agreements interfere with the established principle. When the money is not enough to apply the standard principle they charge more for the same products or by reducing services but not price; or they fire people strategically or with bias.
Of course the CEO and top recipients of the higher salaries and benefits use rationalization to help them accept what at some points becomes unconscionable. They comfort themselves and others who are critical basically with the assertion: “That’s the system…” They fail or refuse to see they can stop contributing to “the system“ as it stands. As an analogy, one could say prostitution also represents the use of the same system; but these CEO and upper echelon earners would not allow or accept their daughters’ participation in the system in that way or to that extent. They would not want their children (or for that matter, themselves) to participate because there is something totally unacceptable about contributing to perpetuating that aspect of the so-called system. Prostitution and all other forms of exploitation should not be allowed. In other words “the system” is not infallible and needs to be fixed. And this also means the topmost salaries need to come down and the minimum wages need to go up. End of rant, serious talk begins.
In stark contrast to greedy entrepreneurs and their CEOs are philanthropic organizations, set up with the benevolent intention of giving away from the resources of kind and unselfish benefactors.
Is Increasing Minimum Wage a Drain on a Business?
Some have said that paying low wage earners more money ruins the business’ profitability. This sounds like a code for: Higher minimum wage threatens to reduce what the highest earners can take for themselves. Inverting the Me-First Principle by paying more to the lowest earners first would unacceptably upset this compensation principle of business since increasing the wages of the lowest earners means all those above will have to be increased, which in turn means there could be less financial resources by the time the pay hikes reach the top. This reverse process does endanger the expectations of the highest levels, where the largest part of the profit is usually paid out.
Because there are many more people below than above, by the time the up-line increases reach the top the share left could be inconceivably less than the proportion of money that is customary between the highest earners and the rest of the employees. This cannot be tolerated! As a result the reaction becomes emotional! If you increase only a lower level, the top guns reason, then those immediately above will resent that, which could greatly disrupt business and profits. Therefore all in all, raising the minimum wage is bad for business.
But look, no matter how they argue the point it is hard to believe that $15.00 per hour (= $3600/month @ 8 hours/day) paid as the minimum wage is destructive to the business whereas a wage at the highest salary levels does not. In Canada in 2013 the average salary of CEO’s was $8,000,000/yr = $666,666,000/month, which works out as $166,666/week (= $23,809/day @ 8 hours/day) and, rounded up, $3,000/hour. How is it that $15 an hour for minimum wage can kill the business but $3,000 an hour (which rises every year) does not cripple the business? In fact by a reasoning that is the reverse for lowest wage earners, these excessively high salaries and bonuses are said to be good business! If a high salary makes a business more profitable why not raise the $15 much higher?
It is a myth, a mere distraction that raising the minimum wage is like unearned Welfare or Handout payment. No, it is an instituted law set in place to make businesses pay no less than a certain amount the employee’s service is worth at the very least. And how are the massive tax exemptions allowed to highest earners not free Welfare or Handout money?
Admittedly a Small Business earns much less and needs to take into account fair employee compensation versus the business’s viability. Many factors contribute to a business going bankrupt however, among which owner or operator’s competence, size of customer base, adequacy of start-up and rainy-day capital and type of business play a significant role. In fact a business can fail based on negative effects of just these matters alone. Reduction in number of employees or in their wages cannot be used to make up for deficiencies in these areas. Therefore paying employees fair wages will not be the reason for the death of such a company or business.
Who decides on the employee’s worth?
On which principle or philosophy is the hierarchical compensation system based? So if the desired goals and outcomes for a business organization determine its compensation policy and the prime goal of that entity’s existence is making a profit shouldn’t the members who directly contribute the most get paid the most? Consider this. Let’s say a CEO says to the HR manager: “Your reports indicate the IT division can do with a minimum of 5 more people who should start no later than October 1, at levels 12A and 13B pay levels. Go ahead; make it happen”. So the people are hired and as a result the month-end report shows the company’s profits increased by a whopping 30%. Who should get that month’s bonus? If the CEO gets a share is it because he read the HR manager’s reports? And if he gets a higher bonus than the manager is it because he is the CEO and the manager is not? Is any of this fair? Who made the policy that guided the CEO’s payment allocation action, anyway?
Regardless, whose happiness is important: employee or employer?
We all want a successful life and so we are always on the lookout for ways to achieve this. In that regard it is considered totally reasonable to aggressively seek more power, influence, higher earnings or other personally advantageous benefits. We encounter a bad example of this common trend for example, in the political arena where, tragically, the way to show competence and/or attract favorable attention is to be combative and adversarial rather than to cooperate for the common good. In news media organizations it seems justified not just to report news; but to slant, spin and otherwise manipulate information to sensationalize, ultimately to increase or enhance audience. Indeed in the world of business, especially in large corporations, the only goal is to make more money by any means.
Nonetheless the motivation for everyone engaged in a variety of economic enterprises seems to be the pursuit of happiness whether inside or outside an organization. In today’s world the common understanding is to acquire financial prosperity as of first priority in achieving happiness. So clearly compensation is an issue that is seen as contributing if not encompassing the happiness or peace of mind that people seek. As a result, in our topsy-turvy world we have come to define eligibility for happiness as based on greater scarcity rather than the happiness everyone seeks determining how the principle guiding compensation may apply.
CEOs can negotiate a compensation package that promotes their inner peace. Not so for the lowest wage earners! The less scarce a type of individual the less important that person’s happiness is considered to be, as reflected in the compensation an organization pays. The principle guiding this transaction however is clearly stacked against the minimum wage earner despite that we all agree everyone deserves to be happy. So is there a principle or philosophy of life a society can implement, which will be fair to all and guarantee the happiness of everyone? Yes, the practice of Inner Peace itself exemplifies such a model of life.
What is inner peace (IP)?
IP results whenever we adjust or transform our mental and emotional reactions to achieve pleasant non-disturbance. The awareness of this state is essentially what happiness is. It is the same as peace of mind (PoM). Awareness of the state of IP/PoM may be momentary, brief, intermittent or long lasting and may range in intensity from shallow to profound.
Why do we need Happiness? What are the benefits of IP/PoM?
Biologically, happiness comes with a suite of emotional responses that help us respond to circumstances in us and in the world. We naturally, instinctively enjoy being happy and so we seek to preserve this need for non-disturbance in the ways we are taught or it is modeled to us from an early age. Because almost everything we think and do is due to or related to our emotions our happiness therefore depends on our emotional wellness. If medical health education, dental, sex and even death education are important for wellness then inner peace education is critical for emotional wellness.
Being happy along the lines of IP/PoM is universally understood and uniting. Although a person or a group can have joy about the “wrong” thing, when they come in contact with other people (unless medically damaged) they will experience the lack of agreement, which will set off feelings of disharmony in themselves. They will then apply the principle of happiness to regain their previous preferred pleasant state of mental and emotional non-disturbance. Also, we need IP/PoM because the use of perception of situations often becomes the guide for determining and acting against unfairness, as it does for many other ills of society. As we are now however, it is easy for insanity to creep in if it is the view or perception of the majority that guides rational versus insane behavior. The majority can be wrong!
Is there a risk insanity can rule the world?
Let’s examine the matter of insanity to see how it can infiltrate even a whole community when the principle guiding behavior is how people see things. A common factor in all insanity appears to be a conflict between reality and perception. Because perception is accepted as reality we all believe (individually) we are reacting to the real world as we engage in our everyday thoughts and actions, whether we really are or not. The more people who see something the same way the more convinced we are that this is proof of its objectivity or that it is not problematic. The error in using only the majority at large to confirm this understanding is that engaging in a certain activity or way of thinking will not be called insanity if most people do so in line with their perception. So for example a whole isolated community that consists of 98% alcoholics may accept this as normal, whereas the rest who, for example are visitors and non-drinkers, operating by an opposite perception, may be seen as weird.
Thus the idea that the majority is always right is faulty, as in this case the perception of the majority does not accurately represent objective reality. But this is true only if there is an entity called insanity that can be verified by means other than the views of people. Now although neuroimaging can detect abnormal brain patterns, which indicate some form of insanity, the hypothetical community has to know about and believe in it to accept its verdict about their attitude to drunkenness. So then in many situations potentially unreliable subjective perception becomes the guide for defining insanity, even if ignorance or denial is its basis. This means the wrong or misguided opinion of the majority, which represents insanity, can be mistaken for reality or the truth. Then, yes, insanity can rule the world! And it is completely understandable if you’re thinking of the recent Helsinki Summit between Trump and Putin.
On the other hand, the global experience of the power of happiness can be accepted as a better barometer of balanced thinking because IP/PoM is universally well known and self-correcting when it goes wrong. Reliance on happiness not only can correct economic errors as in the case of the problems inherent in the current worldwide compensation principles but also promises immense benefits when viewed as a necessary foundation for the success of all policies, projects, creations, practices and relationships. Happy people produce more and maintain better relationships than when they are unhappy.
To acquire IP/PoM, basically we all need to learn what to do about healing our fear, anger, sadness, shame, guilt, discontent, ego and the many feelings that block or take away mental peace. We will then know how to go with the flow, be ourselves without any falseness, give forgiveness, show compassion, and be more trusting of one another. With these teachable skills and qualities in everyone, oppression, corruption, abuse of all kinds, and many other disagreeable behaviors and activities that rob us of joy in life will end. PoM/IP then will become a solution to the unfairness inherent in the topsy-turvy application of compensation in the business world. Universal IP/PoM will introduce a way of bringing universally acceptable alignment to our broken economic system! The items themselves that constitute IP/PoM are the checks and balances of this principle of life wherever it is applied.
Ponder these ideas and start working to achieve your own IP/PoM. Your first step is to share these views; then the next step is to search for ways to learn how to develop your own IP/PoM. There are lots of free instructional sites on the Internet (for example http://www.findinnerpeace.co/ ); books that teach about IP/PoM (for example “TO YOUR HAPPINESS: A Self-Healing Guide to Peace of Mind“, obtainable on the Publications tab on the above website) and courses to take (such as https://www.coursera.org/learn/the-science-of-well-being ) taught by Yale University. Once you start to enjoy the liberating effects of even partial happiness that’s under your control there will be no turning back. If you are gifted or influential in any way (financially, educationally, personality-wise), taking on the dissemination of happiness as your own project will move its beneficial effects that much faster around the world.