Min wage hike passes house... How will you get ready?

Discussion in 'Business Operations' started by kemco, Jul 18, 2019.

  1. kemco

    kemco LawnSite Silver Member
    Messages: 2,689

    Well in TN min wage is $7.25 we follow federal and do not have a state min wage. Currently I pay pretty close to $13 an hour anyway and $15.50 for my crew lead. Roughly double the current min wage. Our largest expense is labor by far. Wow. A lot to consider here. Well I can assure you that my laborers won't be the only one making more as this goes into effect over the next 5 years. My billable per man hour rate will need to pretty close to double. Price of lawns will need to increase a minimum of 40% just for the company to continue to bring in what it's bringing in now after increase in labor expenses. And I will also be increasing my own pay to keep Pace with the coming inflation. I can easily see a 50% or more increase in prices to my homeowners across the board. That's just to keep up.
     
  2. starry night

    starry night LawnSite Gold Member
    Messages: 3,780

    The bill will not be passed by the Senate.
     
  3. Oxmow

    Oxmow LawnSite Bronze Member
    Messages: 1,091

    Kemco, this does present a predicament. When we raise our prices, it’s going to make a lot of customers rethink our services. I know it’s only natural to do that and most will understand why we are going to have to raise them.

    However...what this brings about will be the proliferation of the cash guys in the residential field. Not to mention the commercials that pay through their “maintenance” allowance (that amount they allow for incidentals throughout the month that doesn’t necessarily go on a budget line item). This is usually accessed by a credit card maintained by the facility managers. I have commercials that pay that way, and have never been 1099’d from them.

    Back to the “cash guys”. They will still continue to charge what they were “before” the raise because they are primarily solo operators. They can still survive on the “before” cost of doing business.

    My billable rate won’t go up double, because I already pay almost 14+ for laborers and 17+ for foremen. I have hired an “intern” that is learning my job and will be taking over my hands on and I haven’t approached what his cost will finally be.

    I don’t think the bill will pass.
     
  4. Mark Stark

    Mark Stark LawnSite Bronze Member
    Messages: 1,033

    The biggest problem is customers don't really comprehend what it means to pay our people more money. Our minimum wage here in NY is already high and will be $15 next year I think (it's being phased in).

    Many clients vote for politicians who support & vote for higher wages. Then, when the business raises prices, the clients all of a sudden don't want to pay! I see it here all the time. It's frustrating. You CAN'T have higher minimum wage without prices going up. Everything ends up costing more and the people they claim they want to help end up right back where they started.

    Here's the real rub....higher minimum wage means higher payroll taxes. Uncle Sugar likes this because he wants more money. I'm not convinced that Uncle Sugar cares for the downtrodden whatsoever. I'm convinced Uncle Sugar wants ME (the super rich business owner *wink* *wink*) to pay way more in payroll tax so they have more to eat at their slop trough. :nono:
     
  5. Cam15

    Cam15 LawnSite Gold Member
    Messages: 3,307

    I sure hope not. People already complain about my prices....
     
  6. OP
    OP
    kemco

    kemco LawnSite Silver Member
    Messages: 2,689

    Yes. I feel very bad about those in states with their own progressive taxes on top of federal minimum. In my state you are absolutely correct it will double payroll taxes. Then for those in states like NY where the federal mandate will be $15... What will yours be $23 or higher for min wage. So the 16 yr old kid with no experience gets $23 possibly an hour for asking "do you want fries with that" really effin brilliant. It is unsustainable in a 5 year period and will result in hyperinflation.
     
  7. Mumblingboutmowers

    Mumblingboutmowers LawnSite Senior Member
    Messages: 935

    Exactly. Just a way to get more tax money. Won't help the workers.
     
  8. JFGLN

    JFGLN LawnSite Bronze Member
    Messages: 1,655

    Do people actually work for $7.25 an hr in TN?
     
  9. JFGLN

    JFGLN LawnSite Bronze Member
    Messages: 1,655

    "The Raise the Wage Act would bring the federal minimum wage up gradually from $7.25 to $15 by 2025."
     
  10. JFGLN

    JFGLN LawnSite Bronze Member
    Messages: 1,655

    If this bill passed I don't see how it would affect you much.
     
    stomachbuzz likes this.

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