What’s Your Labor Worth?
This week I’ve been blogging about minimum wage and the cost of doing business for the small business owner. Let’s look at the other side of this pancake and explore the labor side. What is an employee’s labor worth?
What’s your labor worth?
Most people feel they have value. They have skills, expertise and education they feel entitles them to a shot at better opportunities. I could not agree more. Employers are always looking for good people. And, in most cases, want to compensate them fairly for their work. But there are extremes for both sides.
Hiring an employee is a huge step for any business. Even hiring a minimum wage employee brings a burden to small businesses. Here’s why. You advertise a job that pays $10.00 per hour for 30 hours each week. That employee will take home about $7.50-$8.00 per hour after taxes.
First the business has to justify paying that much for the work needed. In addition to the $300 a week paid out in payroll costs there are other costs for the business owner to evlauate.
Other costs the business must generate pays for rent, utilities, insurance, taxes, vehicle costs, inventory, legal fees, accounting fees, software, healthcare, office equipment, and maintenance, just to name a few. And, a few dollars for the owner to take home for his or her family to live on.
There’s no way you can justify paying someone any hourly rate or salary unless the addition of that employee will contribute enough value so the business can continue to pay all those expenses plus the $300 gross salary. If that happens everyone goes home happy. But there is also an employee extreme we must consider.
How valuable are you to a prospective employer? What is the price of your labor? If you have no work experience or marketable skills you are probably going to enter the workforce at the lowest level — minimum wage.
Minimum wage, as we all know, is not a living wage nor is it intended to be. I think we all have a price point we will not work below. Most of us are not going to tar rooftops in 90-degree heat for $2 an hour. So what are your parameters, as an employee, when you are considering a job?
Your salary might be the deciding factor. You might agree to work for less if medical, dental, vision are included in the package. More flexible work hours might be a consideration. The point is that most of us have work experience of some kind and we should not discount that expertise, we should exploit it.
Some Final Thoughts
Employment should be a win-win for both employer and employee. It’s should not be a slave – plantation owner scenario. Employees trade value for pay. The employer trades pay for value.
When you agree to perform a service to another for a specified reimbursement you should live up to that agreement until it’s no longer satisfactory. If the job description has changed then the amount of compensation should be reevaluated until both parties are satisfied. That’s how free markets work. Both parties must benefit in order for both to be successful. There is no way I’m going to work building someone else’s dream unless that work is also helping build my dream.