For Wages, a Trump Slump

If the Trump economy were so wonderful, why would the speaker of the House feel the need to traffic in disingenuousness? Because the Trump economy isn’t actually so wonderful. For most Americans, it is downright mediocre, and it has deteriorated somewhat since President Trump took office, despite the healthy G.D.P. and unemployment statistics.

.. Let’s start with the good news. The unemployment rate keeps falling, and economic growth is solid. These headline numbers are the ones that Republicans emphasize

.. As a result of the growth, nominal wages — that is, the numbers people see in their paychecks, before taking inflation into account — are growing. You can see the pickup in the gentle upward slope of the chart’s solid gray line. Over the past year, the average hourly nominal wage has risen 2.7 percent.

.. Prices matter, too. When the prices of good and services are rising faster than nominal wages, people end up with less buying power. And that is exactly what’s happening now.

.. Events in the Middle East, Russia and Venezuela have reduced the supply of oil, even as a growing global economy is increasing demand. Trump has aggravated the situation by pulling out of the Iran nuclear deal, further raising oil prices.

.. My best guess is that real wages will do modestly better over the next year, barring another oil spike or an unexpected recession. But there is no reason to think that most Americans are on the cusp of truly healthy pay increases

.. They face too many obstacles:

Right now, Trump is presiding over precisely the wage growth that he deserves: zero.

How do you encourage the workforce without incentives?

Numerous studies have shown time and again that money is an extremely poor motivator. Drive: The Surprising Truth About What Motivates Us is a well sourced book which dives into the topic. The author, Dan Pink, has a really nice animated version of a talk he’s given summarizing the findings.

While monetary incentives are a poor motivator, instead people are primarily motivated by Autonomy, Mastery, and Purpose.

Autonomy — Our desire to be self directed. It increases engagement over compliance.

Mastery — The urge to get better skills.

Purpose — The desire to do something that has meaning and is important. Businesses that only focus on profits without valuing purpose will end up with poor customer service and unhappy employees. [wikipedia]


Based on your description, it looks like the company has a lack of Autonomy and Purpose (your question doesn’t mention much relating to Mastery).

The employees aren’t self-directed and in control of their own fates. They’re being asked to work overtime because things are off schedule, again cutting into their autonomy.

They likely don’t feel like there is much purpose to the work they’re doing, which is evidenced by their resistance towards additional overtime.


So, how do you solve this problem? There’s no “easy fix” and no “one size fits all” approach. Especially as you’re already between a rock and a hard place.

It may help to communicate the reason behind the contract, what it means for the company, what it means for the customer, what it means for the customer’s customers, etc. There may be some employee engagement activities you can organize to help them understand the reason their work matters. This can’t be superficial, or trite either, that will backfire. Honestly, the company/project purpose needs to be defined and ingrained in the culture. If you have done that yet, now it’s the time to start, but don’t stop as soon as the current fire burns out. (Thanks to the commenters for pointing this out)

It may help to solicit feedback from the employees about how to proceed. Give them an opportunity to right the ship themselves. You likely have a bunch of smart people who understand the work, customer, environment, etc. and likely have lots of ideas they may not feel comfortable sharing that could help.

If you’ve been running in overtime mode for a long time, it’s quite likely that things like new opportunities, moving teams, changing technologies, etc. are being sacrificed in the misguided notion that “we don’t have time for that”. Happy employees are always better, more productive employees.

.. Perhaps if managers were held accountable for agreeing to unrealistic customer requests and you consulted your workforce about whether they’d agree to perform some overtime to help the company before agreeing to customer demands, the employees would feel more like team players. – David Schwartz 2 days ago