13 June 2024
Fixed-growth mindsets hinder low-wage worker compensation

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Understanding Fixed-Growth Mindsets in Compensation for Low-Wage Workers

In early 2022, New York City Mayor Eric Adams faced criticism for his remarks suggesting that low-paid workers, such as those in the restaurant and retail sectors, lacked the academic skills necessary to hold high-level positions. These comments sparked a debate on the perception of low-wage workers and the importance of their compensation. Assistant Professor of Marketing Shilpa Madan from the Singapore Management University delved into this topic, highlighting the prevalent notion that individuals in low-paid jobs are often underestimated in terms of their skills and intelligence.

The Impact of Low-Wage Workers’ Compensation on Society

It may come as a surprise that a significant portion of the American workforce, approximately 44%, is engaged in low-paid jobs, struggling to meet basic needs like food and shelter. Many individuals working in restaurants rely on tips to make ends meet, painting a stark picture of financial insecurity. Professor Madan emphasizes the detrimental effects of poverty on individuals, including increased stress levels, higher risk-taking behaviors, and impaired cognitive functioning. The research underscores the importance of addressing issues related to low-wage workers’ compensation to promote overall well-being and societal progress.

Examining Fixed and Growth Mindsets in Compensation Policies

Professor Madan’s study, ‘Support for Increasing Low-Wage Workers’ Compensation: The Role of Fixed-Growth Mindsets About Intelligence,’ explores the influence of fixed and growth mindsets on attitudes towards raising the minimum wage. The research posits that individuals with fixed mindsets tend to oppose increasing compensation for low-wage workers, believing that these individuals lack inherent skills and intelligence. On the other hand, those with growth mindsets view low-wage work as a result of external circumstances rather than personal attributes, leading to greater support for wage increases. The study involved a diverse range of participants and highlighted the importance of mindset in shaping perspectives on compensation policies.

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Implications for Business Practices and Social Change

The findings of the research suggest that fostering growth mindsets about intelligence could be instrumental in gaining support for enhancing wages for low-wage workers. Despite concerns about increased business costs and productivity, Professor Madan argues that providing fair wages can lead to improved employee well-being and retention, ultimately benefiting businesses. By shedding light on the role of mindsets in shaping attitudes towards compensation, the study advocates for a shift in organizational practices to prioritize the financial security and dignity of all workers, irrespective of their job roles.

Links to additional Resources:

https://www.brookings.edu https://www.epi.org https://www.cbpp.org

Related Wikipedia Articles

Topics: Minimum wage, Wage disparity, Growth mindset

Minimum wage
A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. Because minimum wages increase the cost of labor, companies often try to...
Read more: Minimum wage

Gender pay gap
The gender pay gap or gender wage gap is the average difference between the remuneration for men and women who are working. Women are generally found to be paid less than men. There are two distinct numbers regarding the pay gap: non-adjusted versus adjusted pay gap. The latter typically takes...
Read more: Gender pay gap

A mindset is an established set of attitudes of a person or group concerning culture, values, philosophy, frame of mind, outlook, and disposition. It may also arise from a person's worldview or beliefs about the meaning of life. Some scholars claim that people can have multiple types of mindsets. Some...
Read more: Mindset

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