Saturday, February 06, 2016

Retaining Employees: How Much Does Money Matter?

In their report on high income and emotional well-being, Nobel Prize winners Daniel Kahneman, Ph.D., and Angus Deaton, Ph.D. (former and current Gallup senior scientists, respectively) discuss whether "money buys happiness" and examine the relationship between experiencing daily emotions and annual household income. They found that experiencing significant amounts of happiness or stress on any given day improves with income, but only up to an annual household income of about $75,000, regardless of geographic location. That is, people with annual household incomes of more than $75,000 don't have commensurately higher levels of this type of emotional well-being, though their general life evaluations continue to increase.
Put another way: Money can improve daily emotions, but only up to a certain point. Once employees reach that plateau, this element of their emotional well-being doesn't get commensurately higher, no matter how much more they make.
The problem for employers is that most workers aren't aware of the income ceiling on emotional well-being. Gallup finds that 44% of employees say they would consider taking a job with a different company for a raise of 20% or less.
Money is a powerful draw for workers. Yet there are tangible actions -- other than simply increasing pay -- that leaders can take to keep workers around.
Article here:

Thursday, February 04, 2016

Low-Skilled Workers Flee the Minimum Wage

Monras’s statistical model predicted that if labor demand is sensitive to wage changes, low-skilled workers should leave states that increase their minimum wages — and that’s exactly what his empirical evidence shows.
According to Monras,
A 1 percent reduction in the share of employed low-skilled workers [following a minimum wage increase] reduces the share of low-skilled population by between .5 and .8 percent. It is worth emphasizing that this is a surprising and remarkable result: workers for whom the [minimum wage] policy was designed leave the states where the policy is implemented.
Article here: