With inflation in mind, 2Life Communities, which provides affordable housing for seniors on six campuses, has taken a new approach to increasing compensation for its 165 employees. Rather than giving its usual base raise of 2-2.5% across the board, the nonprofit used a formula that gave the highest share to those earning the least and higher percentages smaller as you move up the income scale. At the same time, 2Life raised its minimum wage to $40,000 a year, with workers previously below that amount getting increases of 7-17%.
“There’s no question that inflation and what’s happening now is only hurting the bottom end of the pay scale more, so let’s be very clear about that,” said chief executive Amy Schectman, who along with the rest of the management team. , skipped a pay rise this year in order to give more money to lower earners.
Schectman knows that $40,000 still isn’t enough for people to live comfortably in this expensive state, but as a nonprofit whose income comes from government-controlled rent prices, there are limits to what can be done, she said.
“I wish I could give everyone a 30% raise,” she said. “One of my biggest pains…is that the market dictates different levels of compensation for different types of workers.”
“The good thing is that nobody would suffer, nobody would have anything less than a very good living wage.”
John Bjorklund, a maintenance mechanic at a 2Life property in Newton, felt the sting of rising costs all around him. He rents a house in Natick, where he lives with his wife and adult stepson, and he drives a lot – to work, to watch over his 90-year-old parents in East Bridgewater, to help his 37-year-old son with a brain disorder . paralysis in Raynham – accumulating around 300 miles per week. Gas prices have fallen recently, but are still up nearly 26% from a year ago.
He and his wife are also making more trips to Costco than before and trying to shop the sales.
“I never had a lot of money in my life, so I always had to shop around, be careful what I buy,” he said.
Bjorklund and his wife, both 62, are considering retirement. But their modest savings account has dwindled and he may have to work longer than expected. His job is physically demanding – flipping apartments, fixing equipment, cleaning sidewalks and stairs in winter. “I can’t see myself shoveling snow at 70,” he said.
Bjorklund, who also plays guitar in a rock band, got a 4.2% raise in April – more than he normally gets, but less than others.
“I’m not complaining,” he said. “When they say inflation is like a 7% or 8% increase, the 4% increase really isn’t a lot of money. But I’m grateful to have it.
“I try to be the glass half full guy,” he said.
According to a September survey commissioned by Bankrate.comalthough more than half of them said their incomes had not kept up with the increase in household spending.
But even those whose salaries have risen more than the rate of inflation are in a hurry. 2Life custodian Alex Bonifaz was raised to $40,000 a year in April, a 12.3% increase, but the price hike is taking a huge bite out of it. Bonifaz, 64, lives with his two sisters, one of whom is retired, and a niece and nephew in Lynn, and is the only member of the household currently working. In addition to paying for gas, he has to maintain his car for his long drive to Newton. He has noticed the price of meat and clothing rising, and he is worried about the payment for fuel oil, which is up nearly 69% from a year ago. Bonifaz, who was recently diagnosed with diabetes, also faces a direct payment of $700 for two dental crowns.
“It’s a lot,” he said in Spanish, through an interpreter. “Dentists are asking for a lot more money than before.”
Hourly workers have seen their base pay rise more than salaried workers this year — 6.7% on average for hourly workers, who typically earn less, compared to 5.2% for salaried workers, according to a new report. Mercer Poll — a more pronounced gap than usual, and bigger bumps for both groups than in 2021.
Raising wages for low-income workers is a good strategy for both employers and the economy, said Alicia Sasser Modestino, an economist at Northeastern University. Those jobs are harder to fill right now because workers have so many options, she said, and increasing their pay may convince them to stay put. Focusing on those who are really struggling – as opposed to high earners – will also help employers control costs so they don’t have to raise prices, and potentially drive up inflation further.
“If I was an employer, I would raise wages to the lowest,” Modestino said.
But higher paid workers are not immune to rising inflation. Rose White, housing finance specialist at 2Life, was shocked to get estimates of $30,000 to replace the leaking roof on her Somerville home – 20-30% more than a year ago, said she declared. “I was terrified to pull the trigger on a new roof,” she said. “Hopefully things will calm down a bit in the spring.”
White, 47, has spent an extra $50 to $100 a week on groceries for her family of four, including a 12-year-old daughter and 14-year-old son, who play sports and often have friends over to eat. “The volume of food is incredible,” said White, who has taken more trips to Costco — and bought less meat — and recently started growing vegetables to help fight high prices. She is also worried about her children’s education funds and soaring electricity costs, and is seriously considering investing in solar panels.
When White and her husband get raises, they typically put the raise into their retirement savings. But White didn’t do that with his 2.5 percentage increase this year for “cash flow reasons”.
She didn’t mind getting a lower rate than her colleagues, she said, and she’s proud that 2Life is tackling pay equity. The message wasn’t that she wasn’t appreciated as much, she said, but rather, “We appreciate the work the entire staff has done…and the disparity isn’t fair.”
Katie Johnston can be reached at [email protected] Follow her on Twitter @ktkjohnston.
