By Tommy Paulk
Proposals to increase the minimum wage have recently gained momentum, with some companies (and some states) taking it upon themselves to implement their own, internal minimum wage increases without waiting on the U.S. Congress to act. Piecemeal increases on a statewide or company basis pose a unique danger to those companies and states who risk choosing to act unilaterally—a danger not posed by a federally mandated, nationwide increase: that of a competitive disadvantage to those states and/or companies who act alone.
Before I retired in 2012, I was for some 18 years the CEO of a company with over 2000 employees. Our company believed that our productivity was greatest when all of our employees had an opportunity to be financially secure to the degree that they could provide food, clothing, shelter and medical care for their families. One look at a typical family budget showed then, and continues to show today, that basic needs for a family of four, with both parents working full time at minimum wage, could not be met, no matter how frugal their lifestyle. The same is true for a single worker with no family. It cannot be done.
So we set out to provide a company-wide minimum wage of $12.00 per hour, after a minimum tenure requirement had been met, for all employees. We saw immediate gains in productivity and a steady increase in labor quality, as measured by absenteeism, tardiness, job-related injuries, etc. Unfortunately, we quickly ran into a problem in one of our company divisions, a problem that rendered the wage increase impossible at that site. The division was a food processing plant with some 200 mostly unskilled employees. Because our competitors did not share our belief that wage increases would pay for themselves, they had no reason to follow our example, and we lacked the confidence to act alone and risk losing our market share. So we exempted that division from our own wage policy, and it continues to be exempt today. A federally-mandated wage increase offers the only hope those employees have for earning their way out of poverty while working full-time for that particular division of our company.