OVERCOMPENSATING

Posted in Rants on July 9th, 2013 by Ed

If you've shopped for or purchased a new car, you notice that window stickers are a decent source of unintentional hilarity. In an effort to make each car seem as feature-laden and fully loaded as possible, manufacturers will often list items so basic that no car could be sold without them. Steering wheel. Bumpers (front and rear!) Radio. Windshield wipers. Cupholders. It's certainly fair to point out that the car has these amenities, but as a consumer, you're interested in what the car offers beyond the bleedingly obvious. So that's what car dealers emphasize. You already know it comes with seat belts and a dashboard, so the dealer is going to sell you on satellite radio and rear view cameras. To do otherwise would be suspicious. Let's put it this way: if their sales pitch is "This car has a windshield!", as a consumer you would assume (justifiably, no doubt) that this is a pretty lousy car.

I think of this example every time I receive a pay stub. My current and most recent former employer both embraced the new "management theory" trend of giving employees lengthy statements of benefits or "Total Compensation" figures. For example, the pay stub lists not only my salary and what I pay to get health insurance, but also what my employer contributes monthly to the cost of my insurance. As the cost of health plans is quite substantial, this adds many thousands of dollars in additional income. Er, "compensation."

In a sense, I think this is a great idea if for no reason other than to show Americans the behind-the-curtain costs of our ridiculous system of health care. In every other sense I find this practice somewhere between irritating and insulting.

When I say my employer gives me a list, I mean a list. There must be 30 things that I am told are part of my overall "compensation". This includes some items of real economic value – contributions to insurance and TIAA-CREF, for example – but is lengthened substantially by things of minimal value (discounted tickets to university sporting events?) or almost none (free notary service!) Most irritating are the things that one cannot avoid having on a university campus – e.g., use of the library or rec center. The university must have these facilities. Allowing me to use them costs my employer absolutely nothing. How does this constitute "compensation"?

I object to this practice because it is little more than a smoke-and-mirrors trick employers are now using because Americans have finally begun to notice that their wages – you know, the actual money we get paid – hasn't changed in the last few years. Statistically, adjusting for inflation real wages have actually fallen for most Americans since 1970. These statements of benefits are intended to (over) compensate for the semi-annual "By the way, unfortunately there is no money for raises this year" letters and emails. You're not getting a raise, but look at how much we already pay you. It's way more than just your salary – it's also free use of the university parking deck on weekends!

Stop complaining already, you ingrates. Look at how much we do for you. It's almost admirable, the amount of the balls it takes to pursue a strategy of telling employees, "You don't understand your own compensation" in salary negotiations, as if landlords and banks will accept free library checkout privileges in lieu of cash.