Wealth gap

I say this every year at budget time. Call it my annual screed: A flat percentage salary increase across the whole pay scale widens the wealth gap. The rich get richer, and the poor end up with comparatively less buying power.

This year, the town’s 3% across-the-board pay raise will put an extra $900 (before taxes are withheld) in the pocket of an employee making $30,000 a year. Employees making $200,000 receive an extra $6,000. Because of the state and federal tax cuts — that in reverse Robin Hood style take from the poor and give to the rich — employees on the high end of the pay scale get to keep more of their raises.

I have in the past, and again this year, suggested that employees making the equivalent of the Area Median Income (about $80,000 right now) or some other reasonable cut-off point (maybe everyone earning less than six figures) receive a 3% raise, while those making above that amount get a 2% raise. Or perhaps take a fiscal “leap year” periodically in which everyone receives the same $1,000 pay raise to hit “pause” on the widening wealth gap.

Every year, council votes it down.

Council members who support applying a flat percentage pay raise across the spectrum argue that highly paid employees would feel dissed if they received a lower percent or the same amount as their lower-paid co-workers. The highly paid employees might start looking for jobs elsewhere, those council members say.

Maybe. But people who are drawn to government work (and nonprofits — I say this as a former nonprofit and government worker) generally are motivated more by the ability to make a difference in someone’s quality of life than they are by getting rich. If they left for a municipality that paid more, it would be to a bigger town with more bureaucracy and less personal working conditions. And if someone is working only for the money, he or she may not go the extra mile that someone who believes in the value of the work occasionally will.

Unlike in the private sector, no one in municipal government generates revenue. Every pay raise comes at the expense of taxpayers, who are the only revenue source government organizations have.

From an economic vantage point, those on the lower end of the pay scale are more likely to spend their raises and stimulate the economy. Those on the higher end will be more likely to stash the extra income in an ever-growing brokerage account, benefiting further from decisions made by businesses to increase shareholder returns, which often involve keeping wages low and hiring the fewest number of employees to run the organization.

As taxpayers, we are investing in our employees to run a healthy organization. We need to invest in all of our employees, not just the ones at the top.

— Nancy Oates