Biblical Business Radical: Another Take on Not Cheating Workers of Their Wages

 James 5 is one of those scary passages. My paraphrase for the first few verses: If you cheat workers of their wages, there's a special place in hell for you.

As I've thought about this, there are many ways we do this, such as performance appraisals, and I'm always on the lookout for other unacknowledged ways. One of the things I've realized is that I'm don't think it's a good idea to let the marketplace determine what I pay my employees. Their motivation is not my motivation: minimal labor costs, maximize net profits, attracting mediocrity, etc. Their operating values are not my values. Their perception of their employees' contribution to the company's success is not my perception. All kinds of soft characteristics are different too, such as rewarding for loyalty, engagement, innovation, results, etc. And then there's a sense of financial security that leads to an emotional peace that allows employees to be fully focused on their work rather than distracted with unpaid bills. And that's where the PayPal CEO clearly summarizes why he abandoned marketplace determination of wage ranges.

He also looked a new metric for all his employees: net disposable income (NDI) and realized in a sense he was robbing his lower paid employees of some wages. Health insurance benefits, he realized, are regressive when the company contributes equally (i.e. same dollar value) for everyone; lower wage employees pay a higher percentage for their portion of health insurance. The CEO wanted to raise the NDI from 4% to 20%. One of the ways he did this was to reduce the lower wage employee's portion of the health insurance premiums by 58%.

So instead of letting someone else determine what he pays his employees, he let the employees determine it. I'm not sure I'd take this to the extent of letting individuals determine their own pay. Lifestyle choices would play into it. There used to be (I hope it's obsolete) an old practice of paying men more than women for the same work because they had families to support. Married men got paid more than single men. Employees with large families received larger raises than childless employees. And why would I want to support a hypothetical single person's 5 BR, 3 bath house with a large mortgage because they see it as an investment but refuse to have roommates to offset the monthly payments. Average cost of living data won't work for large corporations spread over many geographic areas. However, smaller companies located in a single geographic area should have some idea of average housing expenses, food expenses and other deductions leading to an employee's NDI.