Tag Archives: finances

Business and Finance, Culture, Home and Living, Politics, Society

Arguments Against Minimum Wage Hikes

May 20, 2015 Andrew Leave a comment

This is by no means a formal thesis on my stance against increasing minimum wage. Sorry, no statistics, no numbers, no conclusive studies from universities. Just reasoning, common sense, and personal experience.

As always, I have to give a stupid disclaimer. No, I do not think that everyone who earns minimum wage is an idiot, or lazy, or a bad person, or deserves a shitty life. That’s not my opinion. But it doesn’t affect my stance on the issue one bit. Sorry, pulling no punches this time.

Why am I against increasing the minimum wage? Read on.

Employees are Expensive

When people think employment they think of words like company, enterprise, corporation, which all have negative connotations and stir up imagery of monstrous evil entities with gazillions of dollars just laying around. I work for a corporation, and it employs two people, my mom and me.

Expensive personFor many businesses, labor is a HUGE expense. I don’t know percentages. And it doesn’t matter what percentage of operating costs are for labor, but it’s big, and relevant. How do I know? Go to any small mom n’ pop business in your local neighborhood. How many people do you see working there that aren’t owners? 1? 2? None?

If labor costs were the drop in the bucket that Wage Hikers make them out to be then every business on Mainstreet would be flooded with employees. But they aren’t. Because employees are fucking expensive.

And were not just talking their hourly or salary, but also their benefits, their PTO, workers compensation, and then paying unemployment once they no longer even work for you. Then, you add on top of it that employees these days are usually lazy and check their social media accounts for 4 hours, spend an hour in the bathroom, and do a half ass job the remaining hours, you realize that you’re paying your employees 8 hours for 2 hours of work.

Labor Costs Outpace Consumerism and Revenue

The big “counter attack” to the point above is “Well if employers pay workers more, then they can afford to buy more and then more people buy from that business and the business makes more money, and so then it all works out.”

The premise is horrible for a multitude of reasons.

It assumes that business revenue will increase. Big assumption. Higher labor could mean higher product costs, which could very well result in less customers, less sales, and therefore less revenue.
It assumes that business revenue will increase immediately. Labor is an upfront cost. Meaning even if business will improve weeks, months, or years later, business can’t write I.O.U.s to their employees and wait for that increased revenue to come in. I have to pay my staff NOW. For many businesses they simply do not have money laying around to pay their workers more. It’s not a matter of fairness or equality. It’s a matter of accounting and budgeting.
It assumes that business revenue will increase for every business. Even if certain businesses do see an increase in revenue, it will not be all businesses. The only businesses that will do better are those which hire low wage workers and whose consumer base is also low wage workers. So for example, fast food joints and movie theaters. Businesses that hire entry level workers but attract well-to-do clientele will not benefit from this at all. So the majority of businesses that cater to homeowners, the housing industry, contractors, real estate, will see their labor costs go up without a coinciding increase in volume or revenue.

People are Hired Based on Merit, not Circumstance

Yeah, yeah. Such-and-such lady is a single mom with two kids and she works four jobs and still can’t make a decent living at the current minimum wage, feel bad, yada yada.

And? Since when are people paid based on their circumstances, and not on their merit? What difference does someone’s sob story make? If and when I ever hire someone, the only thing I will care about is what can you do for me? How are you going to make me more money? Why should I pay you X amount? Now prove it.

If anything else mattered, people wouldn’t send in resumes and applications when looking for a job. Employers would ask candidates “How shitty is your life?” and then pay then commensurate with how shitty of a life they have. But that’s not the way it works because it doesn’t matter.

People Aren’t (Always) Worth Minimum Wage

LA recently increased their minimum wage to $15 per hour. A landslide victory for underqualified workers!

Sometimes I consider hiring someone to help me out with simple tasks like writing thank you cards. My penmanship is absolute shit. I can barely read my own handwriting so that seems like a task worthy of being outsourced. Plus, it takes me forever. Why spend 5 hours writing thank you cards which is maybe $10 work, when I can writing policies which is $200 work?

Okay, so a card writer to work for three hours tops. What qualifications do they need?

Good penmanship
A pulse

That’s it.

Why the hell and I am going to pay someone $15 per hour to write thank you cards?

It Ruins the Pool of Candidates

Building on the previous point, not everyone is worth $15, $20, or even $10 per hour. Fact.

But having a lower minimum wage made it easier to distinguish between different tiers of workers when looking for someone to fill an opening in your business.

A $10 job attracted $10 workers. A $25 job attracted $25 workers.

Let’s say I was looking for an entry level position, again, to write thank you cards day in and day out. That’s their only job. It’s a $10 job, meaning the job is so simple that there’s no benefit to me to pay more than that, regardless of how qualified someone is. I post an opening on Craigslist and get a dozen or so people interested in the position. Let’s review the competition:

Candidate 1 – Very Overqualified: One girl is a grad student who expects $20 per hour. She’s got a bachelors in business administration and very qualified in her own right. Fair enough. She is worth $20 per hour, but my labor is not. I won’t pay $20 for $10 work. Pass.

Candidate 2 – Slightly Overqualified: This girl is still in college working on her undergrad. She doesn’t have a whole lot of experience but she’s working at it, and has good handwriting. She’s also bilingual. She’s worth $15 per hour. But again, I have a $10 job, so she is slightly over qualified. Pass.

Candidate 3 – Quality Match: Then comes some woman, 40 years old. Never graduated high school. Dropped out and had 2 kids. No college. Monolingual. But she does have great handwriting and low and behold, she has a pulse! We have a winner! But, oh shit, I forgot. Minimum wage is $15.

Now I am forced to pay someone $15, even if it is to do $10 work.

You would think this is a victory for the Wage Hikers. They think, “Aha! Andrew is now forced to hire this woman worth $10 per hour to work for him and pay her $15 per hour! Buahahahah! Our misguided plan has worked, and now low skilled people can get jobs paying higher wages! BRILLANT!”

But hold on one second… that’s not exactly how it works…. Read on.

It Screws Low Skilled Workers

You can pass a law that increases minimum wage, but you can’t snap your fingers and improve the work force in a flash.

Minimum wage or not, I’m not going to hire a $10 worker for $15 per hour. For $10 per hour, Candidate 3 would have been a great choice, and she would have got the job. She’s worth $10 per hour, and I was willing to pay her $10 per hour.

Gun to my head, if I am forced to pay someone more money, I am going to find a worker who is worth it. Which means sorry Candidate 3, I’m stepping over you and moving straight to Candidate 2. True, I didn’t originally need to someone with college experience and who speaks two languages. However, if I am going spend a certain amount of money I am going to get every ounce of employee I can and sure they are worth every dime.

Example: If I was forced to spend $50,000 on a car, I would not have bought my $25,000 Nissan Xterra. I would have made sure to get a car that was worth the $50,000, such as a Land Rover, or fully loaded Jeep Cherokee.

The minimum wage changed. The candidates did not. When you raise the minimum wage, employers are going to stop hiring entry level workers and go straight to more qualified people who in their eyes would have been worth $15 per hour prior to the wage hike.

Employers are not going to suddenly stop thinking logically, and pay more money for the same labor. If they’re forced to pay better wages, they’ll get better workers, and they’ll fire their current work force without hesitation. Every candidate whose labor is worth less than the new minimum wage is going to have a very hard time finding a job and keeping it.

Conclusion

The long and short of it is that increasing minimum wage might help some people get paid more. But others will lose their jobs and either be replaced, or the employer might just decide to do without their position. It hurts the very people it intends to help. So it’s bad for employees.

It will also reduce consumption, and making hiring more difficult, so it’s bad for businesses.

Prices for goods and services will go up, so it’s bad for consumers.

When someone is bad for everyone, I don’t

Business and Finance, Politics, Society

You’re Worth What You Can Get

September 20, 2014 Andrew Leave a comment

If you know me, or have argued with me online, you ought to know that I’m a fiscally conservative dude. People hear “conservative” and they imagine Scrooge McDuck hoarding and counting his endless piles of money while Little Timmy freezes and starves to death outside. The truth is that being a “fiscal conservative” only means that you don’t play fast and loose with your money. You avoid impulse buys, and put more consideration into purchases and decisions that might affect your financial situation. You don’t spend money on a whim. It also does not mean that you are rich.

All of that needed to be said and for good reason. I’m not a huge fan of new regulations to drastically raise the minimum wage. But no,it’s not because I’m evil.

While many people who are against raising the minimum wage claim that “Burger flippers aren’t for $X per hour! This is outrageous!”, my stance is very different. I think you’re worth whatever you can persuade someone to pay you.

If Joe Teenager can convince his manager to pay him $50 an hour to flip burgers, then by all means I support it and applaud it. Sincerely. The key word here though, is “convince”.

I don’t like the idea of strong arming someone into paying you more, especially when your employment there is voluntary.

All transactions should be mutually agreed upon by both parties; the buyer and the seller. Imagine you’re selling you car and someone offers you far less than you’re willing to sell it for. You have the right to not sell it. Employment is no different. As an employee, you are selling your services in exchange for an income, or benefits, insurance, etc. The employee naturally wants to maximize his income, and the employer naturally wants to minimize his payroll, but unless both parties can reach an agreement, there should be no transaction. Forcing a wage on your employer is no different than forcing your neighbor to buy your car for more than he’s willing to pay for it, simple as that.

The gut-counter-reactions to this might be “But people need a job to live!” True. you may need a job, but don’t forget that businesses are not in the business of hiring people that need jobs. They’re in the business of making money. Whether you need a job or higher pay is not the business’ concern – it’s yours.

Before you sharpen your pitchforks, hear me out. Just because I’m against raising the minimum wage does not mean I’m against higher pay. Just because I’m against rape, doesn’t mean I’m against sex. Just so long as each is consensual.

I don’t mind people getting paid more. I don’t mind burger flippers getting paid more. I try to avoid Walmart which pays a “starving wage”. I frequent businesses like Costco and In-N-Out which voluntarily pay well above minimum wage. I also tip well (when deserved). I vote with my wallet. I encourage everyone to vote with theirs. If enough people do it, it could cause some shifts.

Who works minimum wage though? Who should be? Lower paying jobs are usually entry level positions that don’t require much experience or a heavy hitting résumé. Ideally, they are for teens and young adults looking to gain experience and build their résumé in order to advance to a better job.

Entry level jobs are self explanatory. They are jobs for people entering the work force. By their nature, they are meant to be short lived. You get one, grow, learn, and move on to the next level, and the next person takes your place. It’s kind of like kindergarten. They can support a lone wolf, but probably aren’t suited for supporting a wolf pack. So teens be warned! Having kids on a McDonald’s paycheck is probably not a great idea.

Here’s where “fiscal conservative” finally comes into play. Making more money is one thing. Making decisions that result in less expenses is another. People need to think of life in terms of finances. the car you drive, the neighborhood you live in, the clothes you wear, and even when and how many kids you have are all financial decisions.

Would you buy a car if you couldn’t afford the payments?

Would you buy a home if you couldn’t afford the mortgage?

Would you buy a puppy if you couldn’t afford the food?

If no, then you shouldn’t have a baby unless you can afford to raise it. Again, simple as that.

Actual ad from a NYC teen parents awareness campaign.

Simple as this is. Straight forward as this is. No-nonsense as this, a lot of people hear that and are offended. They’re repulsed at the idea of children being a financial decision instead of a “life decision”.

What many fail to realize is that almost every decision is a financial decision, or at the very least will result in a different financial outcome. Life isn’t free, and so long as that’s true, life decisions are financial decisions.

That’s a whole other conversation and blog post, so let me stop there. Steering this all back on track, the point to all this is simple, so let me wrap this up.

Minimum wage jobs are meant for teens and people with few obligations – not for families.

Instead of regulating businesses to take care of people, people should regulate their own actions to better take care of themselves. If you’re 40 with three kids and on minimum wage, you *probably* made some poor choices, even if it was simple having more kids than you could afford. If you meant to have one child and ended up with triplets, then clearly you’re an exception to the rule.

No matter how old or young you are, if you’re in the work force or entering soon, always be improving yourself and making yourself more commercially valuable.

If you’re a voter, vote with your wallets before you rush to the ballots.

If you’re an employer who can afford to do so, try to help your staff out a little bit. Generosity goes a long way, and happy employees work better.

No matter who you are, remember that every decision is a financial decision, whether you life it or not.

All transactions should be mutually agreed upon by both parties.

Finally, you’re not worth what you think you are. In fact, you’re not worth what others think you are. You’re worth whatever you can convince someone else to give you.

Business and Finance, Politics, Society

Is Where You Choose to Live an Entitlement?

September 12, 2014 Andrew 7 Comments

My interest has been piqued lately by a resurgence of the wage debate. Unions and labor forces across the U.S. have been staging protests over how much fast food workers should be paid per hour. This wage debate is nothing new. It’s been going on for years, decades, even centuries. See the French Revolution. In the U.S. this debate seems to flare up every couple years, and not coincidentally before election season.

A friend of mine recently posted on a link on Facebook about a recent San Diego fast food workers’ protest, which prompted a quick and furious online argument on his wall about the issue. But I am not here today to talk politics, or weigh in on this issue.

What caught my attention was that in the midst of all the arguing, my friend made a peripheral point that if people cannot afford to live on their current wage, that there are a number of solutions to their problem. If they cannot increase their wage, they can decrease their expenses, proposing that they move to an area with a lower cost of living. Mind you, this protest took place and my friend and I live in San Diego, California, so that narrows down the list of “Cheaper Places to Live” to practically everywhere else on the planet.

He was instantly hit with backlash. A friend of his shot back at him with, verbatim, “wait, living in San Diego is a privilege? that’s fucking ridiculous – if you were born there or your parents just ended up there before you, yanno, grew up, that’s a privilege, and you should move?”

I didn’t reply. But my answer to him is “Uh, yeah dude.”

He asked the question as if the rhetorical answer was “Well, um gee, when you phrase it that way, no I guess not.” But the answer is apologetically YES, YOU SHOULD MOVE.

This guy’s thesis is: Once you are born somewhere, living there indefinitely is a RIGHT, not a privilege.

Which is total bullshit, and let me break down why. I won’t use numbers and figures and charts and stats. Let’s break this down using real world practicality.

Personal Experience

I for one have always wanted to live by the beach. The cool weather, the quick job to the beach, the smell of ocean, the drunk college kids puking on my front lawn. Okay, aside from that last part, I’ve always wanted to live by the beach, but I couldn’t because it just wasn’t practical. Okay, you only live once, blah blah. But at the end of the day, paying an extra $200 per month on rent just wasn’t financially practical in my college years. By the age of 24 I had already learned that living where-ever-the-heck-I-want is not a right, was is in fact a privilege.

Micro Level

On a very micro-level, every responsible person chooses where they do and don’t live, based on what is financially feasible. If you have ever been on the market for a new home, and been hunting for the right house with a real estate agent, you know what I mean. One house is perfect. Maybe it has the big garage you’ve always wanted, it’s got a great view of the canyon, a pool, it’s in a good school district, or maybe it’s a 5-mile commute from your office. But reality kicks in. “Honey I’m sorry, it’s just out of our price range.”

Macro Level

Now, shit’s about to get real. Show of hands, whose ancestors were born in the US? Most of our relatives at some point or another migrated here from abroad. Every year thousands of people leave their countries and migrate to the United States to call this country their new home. Some come from as close as Mexico like my grandparents did. Some come from as far as Russia, Asian, Africa, and the Middle East. Why do you suppose this is?

Entitled people who refused to leave their home town. (Sarcasm)

I don’t suppose they moved here because they thought the U.S. would offer them a worse life. They moved here because they thought they had more opportunity, could get better pay, land a better job, go to school, send their kids to school, or maybe avoid ethnic persecution. Whatever the reason, they all have something in common: They moved from A to B, because they thought it would bring them a better life.

These people quit their jobs, packed their bags, uprooted their families, moved thousands of miles, across oceans towards a new country, said goodbye to friends, relatives, neighbors, and their homeland, all of whom they’ll probably never see again, all for the shot at a better life. Some of these people cross treacherous deserts and risk death to illegally get hear, which albeit illegal still shows guts, determination, and sacrifice.

These immigrants can do all this, and yet some entitled U.S. born assholes still think living in San Diego, or this city or that city, is a right? Some people still think moving 300 miles out of state, or just to another city with a lower cost of living is unconscionable?

Excuse my French, but that, oh friend of a friend, is in fact fucking ridiculous.

Can You Believe That Guy?!