Executive Poverty

Want help with your hiring? It's easy. Enter your information below, and we'll quickly reach out to discuss your hiring needs.

Banner of what work should do

WHAT WORK SHOULD DO/Photo: Michael Moffa

“You can’t always get what you want, and if you try sometime, you find you get what you need.”—Mick Jagger, in “You Can’t Always Get What You Want”

The splash of Slurpee fairy-tale colors in this photo taken at the July 31, 2011 Vancouver Gay Pride Parade catches the eye first, but then there’s the BC Hospital Employees’ Union banner: “Work should lift you out of poverty, not keep you there.” As your eyes shift from looking to reading, your recruiter reflexes kick in, You think, perhaps predictably, “Ah, that’s about lower-paying jobs—the kind I never deal with. My candidates and their prospective employer agree on at least one thing: the job to be filled doesn’t pay a living wage, because it pays a very livable salary instead.” If you are an executive recruiter, you are pretty sure that the jobs you are offering never keep anybody in poverty, because your candidates are not minimum-wage workers, temps or other contract workers who cannot command anything like the salaries you negotiate or communicate.

In a stable economy, that kind of reasoning is reasonable. Historically, white-collar incomes meant white-collar lifestyles and obligations that ensured—as they necessitated–sufficient white-collar effort to repeat the white-collar cycle—endlessly, smoothly, like the flow of Slurpees in the 7-Eleven just behind that banner unfurled for others, not for you or your candidates.

Poverty: Relative and Unexpected

The problem is that not only is poverty relative, these days it often is also totally unexpected—engulfing families as suddenly, completely and calamitously as any tsunami, natural or financial. If the applicant nervously perched on the chair opposite you, like a hope pinned on a moment, was earning six figures, but has lost not only that annual income, but also a comparable amount in equity on his house because of plunging real estate values, he is going to feel and be poor—if not today, then very soon, if he doesn’t get this job, or one like it very, very soon. When his kids get yanked from their nice private school, they are going to feel poor—at least until and if they are lucky to discover their new public school is among the good ones and feel equally good about that.

Clearly gross or net income alone is not a reliable measure of poverty, if that candidate and his family are going to feel poor because they can’t sell a house they cannot afford to sell, or have had to liquidate assets or borrow to make up the loss of that hefty income. Nonetheless, “poverty” is not likely to be the term that comes to your mind when contemplating the situation of a solidly middle-to-upper class executive like the one just described. After all, “poverty” implies “a lack of the resources for reasonably comfortable living” (Merriam Webster). Well, how about an imminent lack of those resources, of the resources necessary to deal with a life-crushing non-negotiable debt-to-equity, debt-to-income ratio?

As for, “reasonably” comfortable, although that notion is as vague as “what a reasonable person would believe or do” is in law, it is safe to assume that it does include having a roof over the heads of everyone in your family, or the creature comforts that correlate with the reasonable expectation that what one has had, including lifestyle, will not be lost or seized.

If the harder line is taken that, poverty presupposes clear-and-present danger—to health (physical, if not also mental) and safety, then since virtually no one in America has to flee roadside bandits while searching for a place to stay or to choose between swatting the flies gathered on the nose of a hungry child or eating them, it follows that poverty in America is virtually, if not absolutely, non-existent. Questions of an additional consideration, loss of “dignity” or “self-respect”—another correlate of a living wage in the eyes of some, cannot cross this hard line without being dismissed, since, after all, a loss of dignity is not a loss of health or safety.

Were it so comfortingly simple.

Impoverished Executives?

Unfortunately, given the financial and emotional realities of candidates like the unemployed executive described above, you, as his designated pinch-hitter, if not savior, may, in some instances, have to consider and ponder the possibility that the salary you are getting for him and his family may be just enough to keep him in poverty, rather than lift him out of or save him from it.

The question is, how can you know and, prior to that, how can you find out, while using what yardstick to determine and measure “executive poverty”?

Just now, another recruiter reflex probably kicked in: “Executive poverty” is an oxymoron, you think. “You can’t be an executive and poor. Sure, maybe a man was once was an executive a long time ago, when the drinks he raised in clinking toasts were in fine crystal rather than in brown paper bags and Dixie cups. But anyone I’m interviewing must have recent enough experience to not only qualify for the job, but also to not yet be poor.”

Mentally scrambling to conceptualize the possible plight of the back-to-the-wall executive you are interviewing, your brain comes up with the right concept: “indigence”, a euphemistic term that implies a lack of luxuries that one formerly enjoyed (Ibid.) He’s not “poor”; he’s just “indigent”. That’s a relief.

But to whom, except you?

An Issue of Facts, Not Fairness

To fairly gauge whether the salary you are negotiating or offering will lift or sink him, you don’t have to get dragged into any internal debate about “fair” pay or recite free-market mantras about equilibrium wages. All you need are the facts and not just on his behalf, but also on behalf of the prospective employer.

The B.C. Hospital Employees’ Union does attempt to frame a concept of a “fair” wage—using both cost-of-living estimates and a kind of workers’ rights yardstick. On its website, it answers the question “What is a living wage?” this way, with a clear emphasis on imposed unfair opportunity costs as one manifestation of an unfair wage, strongly suggesting that workers should have the right not to have to make forced choices between necessities:

“No full-time worker in B.C. should have to choose between sending their child on a school field trip or purchasing a bus pass, buying nutritious food or paying their hydro bill.

What is a living wage?

It’s a calculation – higher than the legal minimum wage – that enables families to meet their basic daily needs, such as food and shelter. But it also allows families to fully participate in their communities, escape poverty and severe financial stress, and ensure healthy child development.

Every British Columbian deserves to earn fair, family-supporting wages with benefits in order to live with dignity, self-respect and equality.”

Getting down to specifics in dollars and cents, the union states, “Working families need living wages to survive and prosper. And a 2011 report Working for a Living Wage, released by the Canadian Centre for Policy Alternatives (CCPA), calculates Metro Vancouver’s living wage at $18.81 an hour. In Victoria, it’s $18.03 an hour.” (In May 2011, the provincial government raised the minimum wage from $8 per hour to $8.75­.)

Your task is, in fact, simpler than that undertaken by the HUE. You do not have to find out what a living wage is in general or what is fair for a given candidate. Nor do you have to grapple with deciding what a “fair wage” is in general. All you need to do, as a recruiter, is find out what his situation is, in the event that there is some indication that he or she is in financial distress (that is not self-inflicted). Importantly, in doing that, you also don’t have to worry about anyone’s accusing you of being “soft” or pro-labor and anti-management. Here’s why.

A Pro-Success Attitude, Without Taking Sides

If the salary you are going to offer or he is going to accept is going to perpetuate, if not exacerbate his family’s misery, you will be putting not only him, but also his prospective employer at grave risk. In addition to the obvious peril of his accepting a salary that can’t save him and his family, there are the added dangers of substandard performance caused by the unremitting stresses of financial pressures and the likelihood that he will have to keep looking for something better to make ends meet, or have to moonlight (with a probable impact on his job performance in both jobs), if he doesn’t “go postal” first, and bring things to an end, before he can bring the frayed ends together in some way they can meet.

Irrespective of how you ultimately choose to define “poverty”, or even “indigence”, the invariant and undeniable reality is that if he must earn more than the job will pay in order for him and the employer not to incur these risks, your vetting of his credentials and circumstances will have to include more than noting his most recent and previous salaries, and their pattern of advance,  regression or fluctuation.

Think and Ask Like a Banker

You may want to somehow find out how much he needs, much as a lending officer in a bank would before authorizing a line of credit. The only difference between you and the loan officer is that you are not extending the candidate and employee-to-be money credit: You will be advancing him performance credit—crediting him with having what it will take financially as well as professionally to get his new job done and done well. Moreover, like a loan officer attempting to qualify an applicant, you are the middleman or middlewoman trying to vet and close a deal that is good for both parties, without fear or favor.

Asking About Needs as Well as Wants

In a lifetime of interviews, as a candidate, I’ve never been asked anything remotely related to how much I need—just how much I want. Sure, if I were certain that the offered salary wouldn’t at least cover what I need to stay afloat, if not prepare for a tsunami, I would, as a last resort, cry poor mouth and explain why I needed more—even though generally not a smart tactic, since, as candidates, we are selling our skills, not our needs, even when trying to land a job with a real charity.

The brute fact is that recruiters and employers are not Marxists: “From each according to his abilities, to each according to his needs”, as Karl (in)famously intoned. They are more like “semi-Marxists”: “From each according to his abilities, to each according to what we decide—after he tries to get according to his wants, if not just his needs.” So, they don’t ask, “How much do you need?”—settling instead for “How much do you want?”

The Subtle Wisdom of The Rolling Stones

The common assumption is that since people always want more than they need, you ought to ask them about the latter, not the former. Unfortunately, it is a flawed assumption: As Mick Jagger noted, “You can’t always get what you want, and if you try sometime, you find you get what you need.” On one interpretation, this means that needs are a subset of wants, the latter including needs, without being limited to them. However, on another interpretation, Jagger’s dictum means that wants and needs may completely diverge, as is the case of a drug addict who wants crack, but needs rehab.

Hence, when you ask a job candidate what he or she wants, can you be sure that the answer you are getting is the inclusive one, in which in virtue of wants encompassing needs, the dollar amount desired will be large enough to meet the needs of the applicant and his family and maybe then some? Or may it be that the salary “wanted” is the one that the candidate believes is acceptable to you or the employer, while quite possibly being disconnected from and insufficient to meet the real needs of the candidate and his family?

The implied point is this: You are far likelier to get a revealing and important answer in an interview if you include the question, “How much do you need?” You can still ask the conventional question, “How much do you want?”—but make it more insightful by asking the other question too.

With practice and insight, you will see that sometimes, in an interview, you will need to ask that question.

….even if only one of you wants it asked.

Read more in Cost of Living

Michael Moffa, writer for Recruiter.com, is a former editor and writer with China Daily News, Hong Kong edition and Editor-in-chief, Business Insight Japan Magazine, Tokyo; he has also been a columnist with one of Japan’s national newspapers, The Daily Yomiuri, and a university lecturer (critical thinking and philosophy).