A manager from Minneapolis called into the “EntreLeadership” podcast recently to ask entrepreneur and personal finance expert Dave Ramsey how to handle employee concerns over a pay gap between his union and non-union teams. The caller, AJ, oversees about 10 staff members at an engineering company split evenly between union field engineers and non-union project managers.
Same Company, Different Paychecks
AJ explained that while the two groups do different types of work, some staff are beginning to question why union field engineers now earn more than the project managers who oversee them. "My project managers are now less [paid] than my field engineers," AJ said. "They kind of are distributing workload to them, whereas the project managers receive the projects and then assign a field engineer to their project."
Don't Miss:
- The same firms that backed Uber, Venmo and eBay are investing in this pre-IPO company disrupting a $1.8T market — and you can too at just $2.90/share.
- Kevin O'Leary Says Real Estate's Been a Smart Bet for 200 Years — This Platform Lets Anyone Tap Into It
Ramsey was confused, so AJ quickly pointed out that they are not doing the same job. "The union is more like the field crews, and the non-union is more of the project management type," he said.
Ramsey then told the caller that "It doesn’t matter if they’re union or not. It’s just they get paid different because they do different jobs."
AJ noted that the pay structure used to be the opposite—with project managers earning more—but that has flipped due to market shifts. Ramsey acknowledged that this kind of flip happens across industries: "Somebody in this place made more than someone else and that flipped because of the changes in technology."
Trending: 7 Million Gamers Already Trust Gameflip With Their Digital Assets — Now You Can Own a Stake in the Platform
Market Rates Set the Standard
Ramsey emphasized that what matters most is what the marketplace pays for each role, not what employees feel is fair.
"Project manager pays this, union field engineer pays that," he said. "Are you qualified for the one that pays more? If you are, you’d probably go do that one unless you just don’t like that type of work."
AJ mentioned that in his case, both union and non-union roles are paid above market rate. Ramsey said that in that case, “you got no gripe.”
"I’m not trying to bust a union,” Ramsey added, “But I’m just thinking from a business perspective, why am I paying more if I can wave a wand and not be union and pay less, and that’s what my competitor is doing."
See Also: Wealth Managers Charge 1% or More in AUM Fees — Range's AI Platform Does It All for a Flat Fee (and Could Save You $10,000+ Annually). Book Your Demo Today.
To answer AJ’s original question on how to discuss the pay differences with his team, Ramsey kept it simple: "That position pays this. This position pays that. The positions just pay different. It’s not a personal thing. And I didn’t do it and the company didn’t do it. It’s what the marketplace pays."
If someone still complains, Ramsey suggested it might not be a pay issue. "I don’t have to explain that to
somebody. And if I do, there’s other issues with that person, of maturity and other things going on," he said.
Read Next: From Chipotle to Red Bull, Top Brands Are Already Building With Modern Mill's Tree-Free Wood Alternative — Here's How You Can Invest Too
Image: Shutterstock
