Audrey, a coffee shop owner in Jefferson City, Mo., recently told me about her surprise when she gave a really good employee a raise, and the worker seemed disappointed. Audrey’s surprise turned to dismay when she gave the employee a second raise a few months later. The employee quit.
“She was such a good employee that I did not want to lose her to another business,” Audrey said. “But when I gave her a well-deserved bump in pay, her new, higher income made her ineligible for subsidized child care, so her family was actually poorer than before the raise.”