With states like California and New York lifting the minimum wage, it’s interesting to see that startups are also working to provide better compensation for employees.
http://www.cnbc.com/2016/04/05/some-gig-economy-start-ups-already-paying-15-an-hour.html
I was surprised to hear that there are start-ups willing to pay their employees such high wages but the strategy does make sense. Having a higher wage will increase employee satisfaction and thus decrease the turnover rate and training/hiring cost. However, I don’t think this is a great solution for all startups because in many of them having quality employees isn’t necessarily what attracts customers, it is often the low cost such as Uber that draws in clientele. I wonder how sustainable having such a high wage is across the board for other types companies and whether or not it actually only works for select type of company.
It makes sense that the startups that offer a higher minimum wage ($18/hour) are getting better employees. I am not convinced that the blanket assumption that $15/hour minimum wage across the board necessarily works though. The startup paying $18/hour currently has an advantage in attracting better employees. If all companies are forced to pay close to that wage, the startup must now offer more money to keep that advantage. I think that leaving the wage choice to companies themselves makes more sense. If a company wants to pay $18/hour to attract better employees, let them do it. If a company wants to pay less, that should be their choice.