E-4 and Holding

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During my six years in the Army National Guard I raced up the ranks from Private (E-1) to Specialist (E-4). Once I achieved the rank of Specialist, which is the pay rank of E-4, I went into chill mode. The rank just above Specialist is Sergeant (see chart). My unit was full of soldiers with the rank of Specialist and we had a shortage of Sergeants. Why?

  1. The amount of work and responsibility is much higher for an E-5 Sergeant than an E-4 Specialist.
  2. An E-5 made just a small amount more in pay than an E-4. Not enough to compensate for the increased duties.
  3. Most of us were in college and had no desire for careers in the military. If we wanted a career, we would have been in the regular army and not the reserves.

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Today Starbucks got served with a $100 million judgement because the tip jar proceeds were shared with managers.

A San Diego judge on Thursday ordered coffee giant Starbucks to pay more than 100 million dollars in tips and interest owed to staff across outlets in California.

If the lawsuit sticks, it will have an E-4 like effect. The best baristas will avoid promotions and shun management. Why do extra work and lose all your tip income? And it may even have the effect of good managers resigning their commission so they can continue to collect tips. In the end the market will be forced to pay managers more money and we know that will eventually come from the customer in the form of higher drink prices.