Tuesday, October 19, 2010

Wages Down Sharply for Part-Timers

Today's Washington Post (front page, top of the fold) cover story reflects something we've seen over the last two quarters: hiring is steady and picking up, but wages are flat or down. But what makes this front page news in one of the nation's largest publications? The Washington, DC area has largely been insulated from the devastating effects of the recession due to the dependence on the Federal sector and high supply of and demand for highly-skilled workers.

Some key figures:
  • Median income for part-timers was down double digits in every jurisdiction in the region from 2007-2009
  • Median pay for women who work part-time in the region fell from the highest in the region to 4th place (men fell from 2nd to 7th place)
  • From 2007-2009, median pay for women working part time fell 22% in The District and a whopping 24% (the worst in the region) for women in Fairfax County, my own backyard (compared to a 10% decline in Va. Beach and a 9% decline in Atlanta)
Drawing back to statistics class I know that the averages are dragged down by the predominance of hiring in the last fiscal year in minimum wage jobs (construction, retail, service-related) but it's also hard to determine if these part-time wage earners are working part-time by choice or are under-employed due to economic circumstances.

Although you can't watch CNBC for more than 5 minutes without hearing Santelli describe all of the cash Corporate America is sitting on, I don't think employers are being nefarious here, just cautious, but maybe so cautious that they're shooting themselves in the foot as we climb out of the recession.

Here's the thing, hiring manager, don't go cheap. Sure you can get a bookkeeper who will debit and credit all day long for $35/hour, but in 6 months, after you've spent 3 months bringing her up to speed, she's going to leave you for a $40/hour job and it's going to cost you somewhere between 1.8-3x the annual cost of that employee to backfill and re-train. Those are well-proven, hard-tested numbers and will only prolong this economic uncertainty.

Truly can't afford a market wage? Offer a non-financial incentive to join your firm and stay. Women, particularly, value time over money in many instances and schedule flexibility is free for employers and priceless for employees. Alter work hours (e.g. 7am-4pm), allow regular telecommuting (e.g. Wednesdays, the worst traffic day in the Washington, DC region) or any other combination of schedule flexibility that will bring you the best and the brightest who will stick with you through the recession and beyond.

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