What does your pay raise look like this year?
PlastiCert starts budgetary planning in the Fall, but we do not process pay raises until the latter part of January each year. Why? We want to see the annual inflation rate announced, to set our system up to reflect it.
Announced January 2022, the annual inflation rate for the United States is 7.0% for the 12 months ended December 2021 — the highest since June 1982.
As such, we set that number as the framework for our annual merit increase system.
To some management types, that number might bring a little sticker shock. Some might argue that 7.0 is a number for the past 12 months and you should look at the CPI (Consumer Price Index) Average which is 4.7%.
Either way, the cost of living went up the most it has in almost 40 years. Since back when I just ran the company (for a remote owner) I have been trying to raise our wages. In a “discussion” with the prior owner, when I proposed raising our starting wage to a new number, I was admonished, “do you realize how much that is?!” I replied, “yes, for a family of 4 it is below the poverty level”.
My whole career, pay systems have been a thorn in my side. At one of my early engineering positions, when I was offered a higher wage at a different company, my manager said that personnel acknowledged they would have to pay that same higher wage to replace me but would not be at liberty to just award it to me. At that next company, for one of my annual reviews, my manager confided in me that his boss, the VP of Regulatory Affairs proclaimed (seeing my proposed increase), “he’s too young to make that much money.” At the company following that one, they had determined our increases in the prior Fall’s budgeting. So, when presented with my ratings and the resulting increase calculation, I pointed out an error in the assessment. Upon revising that assessment and increasing the rating, he also revised another section, DOWNWARD, as such ending up with the same resulting increase. When I contested that assessment, the next revision showed that correction, but ANOTHER section was revised downward, to STILL arrive at the same, originally predetermined salary increase. I ended up not signing my annual review and was called before the VP of Human Resources.
According to the Economic Policy Institute (EPI), a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions, the CEO-to-worker compensation ratio was 21-to-1 in 1965. It peaked at 366-to-1 in 2000. In 2020 the ratio was 351-to-1. Most important, the ratio was far higher than at any point in the 1960s, 1970s, 1980s, or 1990s. I include a measure of ours at PlastiCert in every annual calculation. It is now at its lowest ever, just 2.8.
Since our management buyout, our wage increases have been ahead of our region’s average. That despite our ongoing multimillion dollar investment in replacing all our capital equipment AND adding an addition to our building. This year I believe will be no exception. Our average tenure is upwards of 15 years despite growing our staff, and our leadership team is at a similar number. Our people are loyal, engaged, and dedicated to our mission and values statements. How is your molding supplier looking these days?