Why Hiring Bonuses May Not Be More Than A Quick Fix For Low-Wage Workers Employers from Amazon to Disney World are offering big hiring incentives right now. While they're a great tool for employers, they're not always as good for workers.

A $500 Sign-On Bonus To Deliver Pizzas? Here's What To Know About Hiring Incentives

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Time now for a quiz - what do Amazon, Disney World and Dickie Jo's Burgers in Eugene, Ore., all have in common? Well, they're all offering $1,000 sign-on bonuses right now. That kind of cash payout may sound tempting, but NPR's Andrea Hsu says that for low-wage workers, it may be little more than a quick fix.

ANDREA HSU, BYLINE: With a record 9 million jobs open in the U.S., AnnElizabeth Konkel has noticed more and more job postings with the words hiring bonus in them.

ANNELIZABETH KONKEL: I mean, it's eye-catching.

HSU: Konkel is an economist with the Indeed Hiring Lab. She's found such postings on Indeed's job site have doubled since a year ago. Employers are clearly desperate for workers and offering cash to lure them.

KONKEL: Just in the nursing category, it goes from 100 to $30,000. That is a tremendous amount of money.

HSU: After all, these are not Wall Street jobs, where big bonuses are the norm. For employers, sign-on bonuses can be a great tool. For starters, Konkel says...

KONKEL: It's a one-time cost.

HSU: In other words, you're not stuck paying a higher wage week after week, year after year. Also, it's flexible.

KONKEL: Once they get enough staff, they can drop the hiring incentive if they choose.

HSU: Now, those reasons are also why hiring incentives are not always so good for workers.

SARU JAYARAMAN: We are not fans of one-time relief. In general, wages need to go up.

HSU: Saru Jayaraman is president of the advocacy group One Fair Wage. They've been calling for higher wages for workers who earn tips. She says, think about it. For someone working in food service, a one-off $1,000 bonus is hardly life-changing.

JAYARAMAN: That might cover maybe groceries, maybe a part of my rent for a month. And then I'm back where I started. And so if I thought this job didn't work before, in a month, it's still not going to work.

HSU: You're much better off negotiating a higher starting wage. But David Madland of the Center for American Progress says that's not something low-wage workers can typically do.

DAVID MADLAND: Almost by definition, low-wage workers have very little bargaining power.

HSU: Sure, you can ask for a few dollars more an hour instead of the signing bonus. And who knows? Maybe in this labor market, you'd succeed. But traditionally, Madland says, employers have not been open to such negotiations.

MADLAND: They don't want to set a precedent because then they will - might have to raise wages for the next person who comes along in the job or the people who are already in the job.

HSU: What workers can do and have been doing this year is refuse to take a job at the wage being offered. That's forced employers to bump up the hourly pay. A survey of small businesses found a third of employers raised pay in May. But if you are considering that big signing bonus, here's another thing to know. You often have to stay in a job for months before getting the full amount. Tiana Mitchell (ph), a restaurant server in Miami, recently took on a second job at a fancier restaurant that was offering a $1,000 bonus. But she quickly realized the tips at the new place weren't better, and it was too many hours.

TIANA MITCHELL: It was severely understaffed. That's why I was working so much.

HSU: So after two months, she quit, forfeiting half her bonus - $500 - which she would have gotten at the three-month mark. Now she's back to working one restaurant job.

MITCHELL: But nothing as far as searching for the next signing bonus.

HSU: Instead, she's using the time to study. She wants to get a license to sell insurance. It's a move Paolo Varquez would approve of. He's a career counselor at Coastline Community College in Orange County, Calif. He says, yeah, signing bonuses might sound great, but your focus should be on the long term.

PAOLO VARQUEZ: You know, is this job going to provide me with relevant experience and skills for my career goal?

HSU: That, he said, should be the motivating factor, not hundreds of dollars of cash.

Andrea Hsu, NPR News.


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