Bigger job, same salary


Question: My boss recently laid off a lot of people. As a result, she's given me much more responsibility – but no raise and no better title. Is this fair? She says she won't promote me until she sees how I do.

Answer: Call it a wild guess, but we're betting your boss didn't lay those people off just to be mean. We agree that in a perfect world, an increase in responsibility should be accompanied by a bump in pay. But today's economy is anything but perfect. When organizations are forced to reduce their payrolls, many prefer to minimize layoffs rather than cut even more jobs to increase the compensation of workers who remain. In making that tradeoff, employers aren't behaving unethically, even if some employees (like you) may deserve a raise.

As for the promotion, though, we're on your side. Assuming the payroll's frozen, your boss should try to reward you in other ways. A better job title is a good place to start.

Questions? Email Money Magazine’s ethicists – authors of “Isn’t It Their Turn to Pick Up the Check?” (Free Press) – at FlemingandSchwarz@right-thing.net.

34 Comments | Add a Comment | Email

I love many of the comments towards "you must prove yourself before you're paid/recognized for the additional responsibility." Let's apply that concept to new-hires. Should a new-hire be expected to execute accurate tax-accounting at janitorial wages for a certain "introductory" period? No, of course not. So why should an existing worker that the company knows MUCH better than an interviewee not get the same benefit-of-the-doubt? After all, they got rid of the others and chose to keep him/her, so they obviously have a positive view already. Otherwise they would've chosen someone else to keep and to "reward" with the additional unpaid responsibility.

It's attitude. Are you personally "management" or are you "labor?" And for those who think that such a rigid demarcation doesn't exist, I point to the one metric that says everything: the difference in salaries between the average top-paid spots within companies vs. the average hourly worker's over the past 3 decades. That ratio went from a range of dozens (from average hourly workers' salaries to management's) around 1970 to HUNDREDS today.

Most people don't quite realize that if that trend were fully reversed, exactly how much more money would be released to keep the "average Joes" employed. You can blame a portion on the Evil Globalization, but don't forget the three-decade long "padding of pockets" by our Management teams. And besides, what happened to those days when laying people off in-and-of-itself was widely accepted as a failure by management?

My advice? Ride through this economic downturn where you are, keep your skills constantly improving, and always, always keep resumes in the mail and accept all the offers for interviews you can. Live a constant job search, even at those jobs you're "happy enough" with, and don't be shy to jump at an offer of higher salary.

Nothing will get you a raise faster than having a job offer in-hand … whether that raise is at your current company or a new one.

Posted By Jon, New Orleans, LA: June 25, 2009 8:05 am

Jeff From Dublin…… You are saying "let them all fail"…. Well, did you ever think that one of "them" might be a place where a friend, family or you, for that matter, may hold a career?! You, my friend, are ignorant….. The businesses of this country, good and bad alike, are our economy. If you sit in here and preach "Let them fail," it's like preaching screw the economy (great attitude by the way!). If we screw the economy, we deepen our recession. Who is going to be the bigger man in our current situation?

Posted By RB Omaha, NE: June 2, 2009 10:41 am

Your "pay raise" is "not a pay cut." You new "title" is "Still employed."
Try complaining about no pay raise and no new title to those of your co-workers who are no longer employed. I don't think you will get much sympathy from them.

Posted By Don, Omaha, NE: June 1, 2009 5:04 pm

I have seen this happen to friends as well. Here is my advice: Strategically insert yourself to gain new skills, growing responsibilities and visibility. Meet with your boss at least twice per year where you ask how am I doing? If it is mostly positive, point out that you are interested in growing your career and appreciate the new responsibilities. Is a new title possible? Is it possible for an increase in pay or variable? As things improve and you do not get either and are doing a good job and handling your role responsibly, take the skills you have learned and start looking for a new job. Often the best steps to career growth is to go to another company periodically. DO NOT burn bridges. It is a very small world.

Posted By Boston, MA: May 20, 2009 4:39 pm

Start looking for a new job. If you stay, even when economic times improve and raises and promotions return, you'll still be working for people who decided it was OK to screw you.

Posted By Bob, Chicago: May 20, 2009 4:18 pm

We are living in a free society. You have the choice to quit your "low pay" job and find a better one. If you can find a better job, then maybe the market decided this is the fair compensation. There is a price to pay for being free: Your high pay job could go to someone else, such as people in China/India. This will continue until the compensation level in the world equalizes.

Posted By GM, Marietta, GA: May 20, 2009 2:10 pm

The hounds blame the little people for the country's implosion – yet it is their programs, products and marketing programs that led the people down the wrong path. Yes, I am talking about our corporate oligarchy. Change is being forced upon us because of years of business and government irresponsibility. Okay – it’s the people’s (our)fault – fine. Let's stop giving corporations our money. Let them all fail! We will be better off in the long run because "we" will get our country back once they are gone.

Posted By Jeff – Dublin, CA: May 20, 2009 1:37 pm

Companies are taking advantage of the workforce and financial conditions. The threat of your job going overseas or to a junior person for less money is there all the time. In my industry, salaried workers have always been expected to work 42-45 hr/week. For the last 2 years, it's avg. 58-62 hr/week. You can't say no to addtional work or you'll be put on a list to go. Pretty close to slavery. Keep in mind that for salaried workers — anything over 40hrs is free for the company.

Posted By Kenny, Chcago, Illinois: May 20, 2009 1:02 pm

Are you people nuts… the employee is dying… people are just surviving in a place that they hate… corporate America is a place for cattle… people need hope,not a new title… people get soft… where are the men in this country?

Posted By Matt Villalobos, Edwards CA: May 20, 2009 1:02 pm

I know we all hate to be in that situation, but our choices are very clear: (1) Leave if there are better opportunities elsewhere (2) Stay if there is not. Sure you can fuss over the title, pay, etc. But all "fairness" aside, we all come down to those two choices.

Posted By Peter, Greensboro, NC: May 20, 2009 12:59 pm

Although I'm an employee and cannot say I'm happy with my boss 100% of the time, I'm also sick of this mentality of people that society owes them something. As other people mentioned, you shouldn't get raise/promotion until you've proven yourself. Some people are cynical about how we have to sacrifice so the "top dog can eat better". Guess what. If the top dog didn't open up the business, you wouldn't have a job. So, maybe he does deserve to eat better. If you don't like it, go find another job, or open up your own business. Just whining and expecting handouts is not how America was made.

Posted By Employee, NY, NY: May 20, 2009 12:58 pm

I bet the ceo, vice presidents, owners — if it's a small company — took a pay cut. They are really hurting. You should be happy to give up some of your pay in addition to working harder, so the top dogs can eat better.

Posted By paul hardick, carlisle, pa: May 20, 2009 12:37 pm

Boss probably got rise because he showed his bosses excellent productivity… you can enjoy third world country exploitation right here in U.S.A.! This is exactly what globalists, traders, bankers want: you earn less for more work until you're no more than a slave for them and never compete with them in capital markets.

Posted By sam, sw: May 20, 2009 12:34 pm

If you don't like your situation, find a new job.

Posted By gary, michigan: May 20, 2009 12:22 pm

I've worked for one company for 29 years. It's always been that way here. If you're given additional responsibility, you prove yourself before getting promotions. It's been that way in this company in every kind of economy. Why should a person be rewarded for something they have not yet accomplished?

Posted By Greg, Westminster MD: May 20, 2009 12:20 pm

With this economy, work your ass out even for no raise.

Posted By Gabe Gilbert, AZ: May 20, 2009 12:11 pm

It is disappointing that Fleming and Schwarz fail to provide more backbone on employment issues. Caving to the unfair and immoral leverage of the employer might be the best strategy for a single employee, but it is disastrous for the national economy and for the growth potential of the employer (yes-lower profits!). That is because it trains the supervisor and the company that employees can be abused at will, and that the market value of their labor is arbitrarily small. Instead of cultivating human capital for long term success, this is evidence of disastrous short term thinking and exceptionally poor and uncreative management. The right answer is that a key responsibility of a supervisor is to take care of their employees, and that is the message that needs to go up the management chain. All it takes is for all employees to gently, but confidently, push back, and a systemic change can be realized. The question is how do we start and how can we align employees to act.

Posted By Gaurav, Austin, TX: May 20, 2009 12:03 pm

Now is the time….find what you really like to do and find a way to do it. Cut back on expenses, go lean for a while, and find your heart in your work. You will be much happier for it, even if it doesn't pay as much.
I took a huge pay cut, but I enjoy my work soooo much more. I know it's hard and scary to go after what you want, but the end result is so much more than you expect.

Posted By Steve, Denver CO: May 20, 2009 11:57 am

Be patient with your boss she is probably pressured from above to do what she is doing. It is indeed a macro economic event. As reported earnings of the S&P 500 are down 92%, adjusted for inflation, that's as low as at the bottom of the Great Depression.

In the last 8 years wages and salaries as a share of gross domestic product GDP) dropped from almost 50% to 46.2%. That's means workers are collectively getting about $500 billion a year less than if their share were at the average of the years 1947-2000.

Labor's share of GDP strongly correlates with the top marginal tax rate and the capital gains tax rate. As tax rates go down so does labor's share in the economy. Apparently, the lower the rates the greater the incentive for CEO's to squeeze workers in order to pump up short term profits and their own compensation.

Low tax rates have a poor economic record. In 1925 Coolidge cut the top rate to 25% while leaving the capital gains rate at 12.5%. Four years later we descended into the depression with these tax rates. Our crisis began four years after Bush in 2003 gave us the lowest capital gains tax rate since the depression. Since Reagan's famous tax cut, the top tax rate averaged 38.5% from 1982-2008. In years the top rate was below that average (1988-1992, 2003-2008) GDP averaged growing 2.5% a year. When the top rate was above the average (1982-1987, 1993-2002) GDP averaged growing 3.3%. In the 28 years before Reagan's tax cut GDP annualized growing 3.5%.

Don't be upset with your boss be upset with a system designed to reward existing wealth rather than create prosperity. The way to tell if a tax cut advocate favors existing wealth or prosperity is whether they support lower tax rates or higher tax brackets.

The key to sustained growing prosperity is to have a high enough top tax rate that the wealthy have strong incentive to put the marginal dollar into a business where it can be deducted or depreciated as opposed to taking the dollar as personal income. While having a high enough tax brackets that the average tax rate is low so that the most productive among have a dramatically above average after tax income.

Reagan was right the 70% tax rate for income above $215,400 was way to high. If he had raised the bracket so only the portion of a persons income above say $25 million was taxed at 70% growth in the 28 years since the tax cut would probably been stronger rather than weaker than the 28 years before the tax cut.

Posted By John Amarillo, TX: May 20, 2009 11:32 am

Does it feel fair with lots of new responsibilities asked of an employee? No, of course not. However, the manager's position is equally difficult.

Let's say they give you the pay bump, promotion, etc. and all the extra duties and then you completely fail to perform the new duties? Then the manager is either forced to fire you or decrease your pay, remove the promotion, etc. and that is probably a huge headache for them.

At my job, to earn a promotion I have to perform as if I hard earned the promotion for 6 months to prove myself. Then, I get the promotion because already I've proven that I can do the work. My bosses won't just give me a major raise, because if I can't do the work they would've lost the money because of my lack of performance.

Sit down with the manager and discuss the situation. Are you willing to accept the new responsiblilties? If so, will you receive extra compensation for those new responsibilities? Perhaps a trial period to see if you are capable of the new position and duties for X weeks. Then, with satisfactory performance you get the promotion, etc. Any decent manager should be willing to discuss the situation and try and set things up to make the change reasonable for the employee in the long term.

Posted By Steve, Alexandria, VA: May 20, 2009 11:28 am

This trend to better or fancy job titles, is just malarkey.

Using semantics, to compensate people, is really silly. Call the job what it really is, and let people accept that title.

No one is getting raises, and darn few are getting promotions either, in today's job climate. Get over it, and be glad you haven't been laid off.

Posted By Rick McDaniel / Lewisville, TX: May 20, 2009 11:27 am

Just be happy you have a job and they have not also cut your pay, given a furlough, or cut your benefits on top of the new responsibilities.

Posted By Fisho, Fletcher NC: May 20, 2009 11:19 am

But, but, unions are evil, right guys?

Posted By Ben, Iowa: May 20, 2009 11:01 am

You have to remember that we're supposed to be experiencing lower consumer prices which means you can afford more on the same salary….maybe you didnt get a raise in wage but according to the indexes, your buying power has increased. Just think, it could have been you who got the axe. Anything goes in this day and age!

Posted By Lindsey, Minneapolis, MN: May 20, 2009 10:56 am

You weren't cut when the company made a lot of cuts. That shows that the boss values your work or you probably would be unemployed now. People are getting cut and you want a raise? Get over it and be thankful that you have a job.

Ask what you can do to help out during these times then work with the boss to attain those goals. Make sure to look for ways to work more efficiently. Don't hunker down hoping not to be cut or you will be.

Look after yourself and your career. Make sure to add value whereever you can and be sure to get proper credit. Continuously communicate with your supervisor about goals and meet them at a minimum. Network like crazy inside and outside the company. Be as upbeat as possible and make sure to present a good attitude.

Have a career long view during this downturn. Take advantage of any training and any networking you can do on the company dime. Where there is chaos, there is opportunity.

Posted By Roger, Raleigh, NC: May 20, 2009 10:46 am

This is just another example of US business destroying the middle class that was the foundation for US business success in the 20th century. From the standpoint of the working class, there are 300M Americans and 6.2B everybody else. That 6.2B will work for a tenth what US workers have come to know. US executives will not be happy until US workers are paid global-rate wages, thus destroying the middle class and US businesses with it in the long term. In the short term, executives are just focused on getting theirs while the gettin' is good.

Posted By Jim R, Minneapolis: May 20, 2009 10:37 am

Welcome to my career, this has been happening in manufacturing for the last twenty plus years. There were over 4000 employees at our plant when I started, now we have 218 people left, this is all about the “New World Order" that both the Democrats and the Republicans have supported since Nixon. All these jobs have been moved to India, Mexico, and China, remember Ross Perot? What you are hearing is that large vacuum sounds of our jobs leaving this country for good. We are very close to being extinct as a nation folks, time to wake up and fight for your freedom.

Posted By The Lonely Libertarian of Liverpool NY: May 20, 2009 10:36 am

In this economy, I'm happy to simply have a job. My department is in the process of going from 3 to 1 person (me).

My company doesn't give annual cost of living increases. We don't tell our prospective employees that, however.

Who in their right mind would take a job where the possibility of a raise isn't ever brought up? While we do go through the exercise of annual reviews, they are not related to annual increases in compensation.

It usually takes about 2 years for employees to catch on and then move on to a different company.

Senior Executives, however, enjoy their quarterly bonuses on time, every time. They also enjoy common executive perks such as fully paid company healthcare and gym memberships.

That is how the system works, and of course, employees are always free to "become successful elsewhere."

Posted By Fun in the Sun: May 20, 2009 9:58 am

I work at a company that has let 20 percent of the workforce go in the past 6 months, and we were already lean to start with. In addition I took a 10 percent pay cut. Should I complain, though? I am still employed at 90 percent of my pay, get a few extra (unpaid) days off, and have the opportunity to make contributions to the organization that I would otherwise not. The way I see it, the more valuable I can be to the company the more likely I will survive to better times. Take a look outside – In my opinion, a bit more work and responsibility is definitely preferable to the unemployment line!

Posted By Mike, near Indianapolis IN: May 20, 2009 9:42 am

I have to agree with Ben Ranklin's primary idea that what is happenning now is an attempt to push the rate of compensation down. Business in the US has long complained bout wages being to high, especially in manufacturing. but is fair compensation that had allowed for the growth of the middle class. The unintnded consequence of this drive is to backfire as it did. Over the last several decades the ecomony was fueled by consumers. And most recently because of this approach to cutting wages we manged this through borrowing. We need to strike a balance.

Posted By Chris; Boston, MA: May 20, 2009 9:10 am

Yes, more work and lower sallary. In fact, it wont stop until we're all living in dormatories at the edges of ourcities, commuting to work on mopeds while wearing smog masks. Then and only then will you be competitive with your Chinese replacements.

Welcome to globalization,

ed fardos

Posted By Ed Fardos, Redwood City, CA: May 20, 2009 9:02 am

Wow, you must work for Hewlett-Packard because that's EXACTLY what they have been doing for me than a year now. And get it in writing that she'll promote you after you do well. I didn't and I got screwed.

Posted By Tom, Cincinnati, OH: May 20, 2009 8:29 am

Dr. Fleming's answer completely misses the point of the question. By treating an employee in this manner, the boss is demonstrating a lack of support for a subordinate. Employees don't care what you know until they know that you care. By laying off co-workers and increasing this employee's responsibility, the boss is telling the employee what to do and how to do it. This is meta-management, not real management, and never works in the real world. The phrase "until she sees how I do" is simply code-speak for "until you make me look good in front of my superiors." If the boss really cared for this employee and was competent in her own position, she would offer to pitch in to help this employee. Instead, the boss has simply chosen to engage in an iterative process of redefining the employee's job responsibilities until such time as the employee has all the responsibility and the boss has all the authority.

Posted By BJ Thomas, Jr. Atlanta, Georgia: May 20, 2009 7:40 am

Many employers are running with the 'econ news' and have the employees by the reproductive organs…

The practice noted in the article is all too common in business in America today – it's all part of getting the American pay rate down to equal the 'Global' pay rate…

Bottom line, all workers in this country need to form either a national labor union, or get Congress to reverse the antiquated labor laws, and drop " Exempt " employment status for all employees except Corporate Officers – this way if the company abuses you and treats you like an indentured servant as cited in the article, you'll at least get paid!!!

Posted By Ben F Ranklin, Boston, MA: May 20, 2009 7:31 am
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Do the Right ThingMoney Magazine's ethicists, Jeanne Fleming, Ph.D., and Leonard Schwarz, are the authors of "Isn't It Their Turn to Pick Up the Check?" (Free Press, 2008).
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