I remember around 2000, $10 an hour was not consisered good hourly pay, even for entry level jobs. Right now I make a little over $15 ab hour with good benefits, and very good health benefits. Even so, I think I am paid very low; I mean $15 an hour today means between $10 and $11 in 2000, and I could always get a job that paid at least that much easily.
Anyway, it seems as if people do not think$15 is really low pay in the same way that they thought $10 was 14 years ago. Have standards changed, or do people not understand the concept of inflation so well any more?
That is certainly an obvious factor, but there have been recessions before - I guess to some extent I am wondering if the “new normal” is really such a broad dramatic shift in expectations, or if this is something more confined to the circles I travel in personally.
I think that the change is that today we have a group of people who not only don’t think that $10 or $15 is low, but think it is ridiculously high and that if we had real capitalism companies should be allowed to cut it further.
That inflation is low means that 0% raises are more tolerable, which means that it is easy for skinflint companies to give them.
Who thinks $15 an hour isn’t “low”? I mean other than people who make $12 an hour? It’s only $30k a year which is a good $10 k - $20 k lower than the median income.
2000 was the tail end of the 90s economic boom. We are on the 6th year of a recession that followed an 8 year economic slump where median wages stagnated.
People line up to work for $12/hr with no benefits now.
I thought what you were saying here was true - it’s part of what I myself was basing my ideas of what low wages are on. I looked it up just to make sure; and also because other posters in the thread seem to think 15 is not all that low in this economic climate. Apparently, 30k is the median, give or take a couple thousand.
Maybe this explains why so many people in a thread last week thought the young nephew of a poster was absolutely crazy to pass on a 42K per year job.
If my numbers are wrong, let me know - I only went to Wikipedia.
The OP has a wildly-distorted view of reality. To the best of my knowledge, I do not know anybody who makes as much as $15 per hour. There are many millions of Americans who would kill for a job that paid that much.
Of course people understand inflation. People understand that the fifty cents that got you a bus ride in the 1970s went a lot farther than the fifty cents that buys you a Blow Pop today. But that’s the thing. The 1970s feel like a long time ago. The early 2000s only feel like yesterday. I think most people readily appreciate that the cost of gas has gone up since, say, 1999. But the increase in everything else isn’t talked about as much, so it’s easy not to notice it.
I think people have lowered their expectations a lot over the past decade. A decade ago, I was in my mid-20s and it seemed like everyone I associated with who was around my age was talking about real estate. Twenty-somethings today are talking about finding a job that will allow them to pay off student loans. It wasn’t that common for a 20-something in the early 2000s to live with parents. Nowadays it’s pretty typical. Of course $30K sounds reasonable if you’re still living with parents and you’re only concerned about getting out from under loans rather than buying a house out in the suburbs. That’s a pretty low bar American dream.
For people without a college degree or trade skills, $30K no doubt feels like a “dream” as well. Why wouldn’t it? When you hear about Ph.D’s commanding the same salary working in the produce section at Whole Foods, a high school graduate pulling in the same amount probably feels like they aren’t doing so bad.
I think most of the people I know have at least a masters level education, probably more than half have Phd’s. Actually one of the best paid people I know does not even have a bachelors degree, but is a union worker. With only a bachelors degree, I am less educated than most people I hang out with socially, so perhaps that is why my view of things is off.
I also started looking at it another way; if I worked 70 hours a week like a number of professional people I know, with overtime I would be making approximately 66,000 per year - and that would put me above the median for a master’s degree holder and not really that far below the median for a PHd holder. :eek:
Your 15 per hour is a cost to your employer of between 19.50 and $21 per hour, depending upon the state and city you live in. The difference is called the “Labor Burden” and the above is based upon a burden of between 30-40%.
You say you have good benefits and very good health benefits. That has to be paid for so there is your range of 30-40%, easily.
Yes the standards have changed as it is within my memory of a labor burden in the range of 20 to 25%, and this is a figure that is going up and will really go up once Obama Care fully kicks in.
Want an answer as to why wages not rise much, you have to take labor burden into account.
I know the monetized benefits to the penny for me; it is about 20%. Are you trying to say total salary has gone up and matches inflation but base salary has become less of a proportion of total salary because of the increase in health care costs paid by the employer? I’m not exactly sure if I am reading your post right.
I think I am confused by your use of the term labor burden in the situation. Labor burden includes taxes, insurance, benefits, it can even include the cost of doing payroll. I think a more digestible comparison would be total compensation vs. base salary because labor burden introduces a lot numbers that are not as relevant to the analysis.
When I worked for Bell Labs 25 years ago we did headcount budgeting based on what we called loaded rate, which included salary, benefits, office, computers, etc. It was a lot more than 40%, and it didn’t prevent them paying decent salaries, a lot more than $15 an hour.
Also, you can’t just compare $x with $x + $n for $n worth of benefits. Since some, like Social Security and health insurance are required, you really have to compare $x+n with $x -$n - which is conservative since companies get better deals than individuals.
That would explain a large part of it. For the country as a whole, it looks like only a few percent of people have a master’s. And of course, not too many people are union members anymore.
Our company is in the midst of unionizing. I think if we unionize, the first thing we should do is push for higher wages, I think we are getting paid a pittance compared to other union workers, and we have to work fairly hard. Nobody is interested in bargaining for that. I feel as if they are all suckers, we could easily get another 4-5 dollars an hour as skilled labor - it takes 4-6 months of training for people to get up to speed even if they have similar experience.
I think in the grand scheme of things, it would not be hard to get that kind of pay increase. I think it will actually not even be that much of a loss for the employer who is trying to stop us from unionizing - the turnover is high and if they would pay more, people would stay longer and I think the increased productivity would balance out the increased pay.
It’s all falling on deaf ears though. A lot of my coworkers do not really feel like they deserve more money, that is their mentality. They don’t really share my view of the situation, and from what I can tell they are not very financially literate. So, I feel that if we bargain for higher wages we will get it because management already has that scenario figured out and it will not make the company significantly less profitable.
It sounds about right. I was actually thinking of medium household income which is about $50k and more often than not includes two incomes.
I mean it’s all relative for your location, industry and personal situation. A young person in his first job out of school? Yeah, you would be stupid to pass on 30k-42k if your alternative is zero. But $30k was also a fairly decent starting salary when I graduated college in 96, so it’s not really that much these days.
My perspective is a bit warped though. I work in Manhattan in the post-MBA world of high tech, finance and whatnot. So going by the various trade blogs and magazines I come across, apparently you have to be some sort of failure idiot if you aren’t making $250k right out of business school and aren’t retired by 40.
Which ties in nicely with another thread about why NYC is the unhappiest city in the country.