Raising the minimum wage...

Discussion in 'General Industry Discussions' started by impactlandscaping, Mar 15, 2006.

  1. impactlandscaping

    impactlandscaping LawnSite Silver Member
    Messages: 2,332

    We found out last week our state legislators want to increase the minimum wage in WV mandatory at $ 7.75 per hour by 2008. It's hard enough to find good help in WV, no matter what business you are in. With large increases this year and next, some smaller companies may be squeezed with the gap closing between min. wage, and above avg. wages in WV. I have trouble finding semi skilled laborers at $ 10.00 per hour, which is $ 4.50 more per hour than the going min. wage jobs in the state. Their reason is to "attract the attention of the US Govt. in order to raise the rates across the board in all 50 states". With the increased labor rates(inc work comp. premiums in WV), which is everyone's greatest expense, the margin for attracting laborers into the landscaping field is going to be even wider than it is now. With no extra tax incentives to business owners, how can you keep the state market flourishing? What's it like in your state??
  2. LB1234

    LB1234 LawnSite Gold Member
    Messages: 3,208

    Pay peanuts get monkeys...

    Pay minimum wage, get minimum help.
  3. procut

    procut LawnSite Bronze Member
    Messages: 1,852

    The same thing is going on here in Michigan. It is going to be a major blow to our already not so hot economy. I have heard many disscussions about it, and ultimatly a higher minimum wage leads to inflation and unemployment.
  4. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    I don't hire help.

    No problems, none at all.
  5. impactlandscaping

    impactlandscaping LawnSite Silver Member
    Messages: 2,332

    That is what I am thinking here as well. We are in a great economic area of the state, booming housing market, plenty of jobs, and more than enough work...but, the bottom portion of WV is a mixed area of industry, poverty, coal towns, and areas of depressed economy. With a statewide wage hike, some of these areas are going to be overcome. The second problem is the younger generation wants everything handed to them, and that's the way they will see this increase. Of course there will be no increase in work ethic or productivity from them. We will have to start hiring at $ 2-3 more per hour in the next year or so, which will give us more than ample time to increase rates accordingly. But in the end, it's the companies and mom and pop places that can only afford to pay $ 5.15-5.50 per hour for help now, who will end up paying the price for it in the end. Thanks Tim and Joe Manchin:hammerhead:
  6. T.E.

    T.E. LawnSite Senior Member
    Messages: 799

    The answer to the min. wage question to me is simple. A person needs to acquire skills that warrant a wage higher than min. wage, and they will make more than min. wage. Min. wage is so a person with no skills can make a certain wage, and a lot of time they're not qualified to make the min. wage.
  7. Brianslawn

    Brianslawn LawnSite Silver Member
    Messages: 2,002

    lower the price of your services, now.
  8. Richard Martin

    Richard Martin LawnSite Fanatic
    Messages: 14,699

    Actually if the minimum wage had kept pace with inflation since I started working it would be $7.82 an hour. When I started working back in 1972 the minimum wage was $1.65 an hour. Since then the Consumer Price Index has risen 474 percent.

    You need to remember that economic conditions are not the same in all areas of the nation. While some areas like yours and mine usually start even unskilled, young labor at over the minimum there are areas where people are trying to pay their household bills at the minimum wage. With the prices of goods and services rising faster than wages they are slowly, but surely, going backwards.

  9. Evergreenpros

    Evergreenpros LawnSite Bronze Member
    Messages: 1,154

    We're $7.63 in Washington State with built in increases every year now. Minimum wage has two purposes:

    1. Get people elected
    2. Destroy rural areas

    There is not a single economic advantage, micro or macro, by having a price floor on labor.
  10. brucec32

    brucec32 LawnSite Platinum Member
    Messages: 4,403

    First of all, I realize that min wage laws have been proven to cause more problems than they solve.

    That said, I have to chuckle at some of the attitudes I hear from contractors here. Someone wanting a job that is very physically demanding and unpleasant, with few benefits, advancement possibilities, etc to actually pay enough to have a minimally decent life is "wanting something handed" to you? And yes, someone will still have a poor work ethic if they are only paid $2/hour more than now. It's still a poverty level wage! Why would you expect any hard working person to work for that wage when they can do much better elsewhere? The wages are so darn low now that it's amazing you can find anyone to work at all, even immigrants.

    While the rest of America has experienced nice gains in standard of living, real inflation adjusted wages for service industry laborers have fallen since I was of the age these "lazy" workers are. Heck, I made $8/hour in 1980 as a completely unskilled construction worker who basically did odd jobs and cleanup. My guess is that job would pay less than that today! I remember apologizing to employees working for me at a previous employer when I could "only" offer them $5.50/hour. This was almost 20 years ago. I guess that would be about $10/hour today. But even then, only a college kid would work for that. Nobody who had to actually pay bills would. We didn't get many people over 20 working there.

    If you're paying a wage that is even remotely affected by the prevailing minimum wage, you are showing signs of becoming a bottom feeder in the labor pool. Why not try the opposite approach? Why not try to find a way to use better equipment, training, and pay to attract better quality and more productive help?

    I see examples every day.

    - 12 guys with shovels out planting trees and shrubs on a subdivision entrance that one guy with a Dingo and auger and one helper could do. It's 95 degrees out and they're obviously hurting. Gee, I wonder why they don't show up the next day and go find work elsewhere? Is it "laziness" to not want to work till you puke for chump change?

    - LCO's dropping off 3 day laborers with 21" mowers to do lawns one man with a good compact ZTR could do in the same time.

    - hand wheelbarrowing materials around jobsites when there are plenty of powered models on the market. If you treat employees as expendable units you can work till they burn out, they will leave. I rarely see any investment in improving employee's comfort or fatigue levels. Only when it saves time and puts money in one's pocket do we see guys buying better tools. What they don't realize is that a happy employee is a long term employee.

    - Continual hand weeding of planting beds where the appropriate use of pre emergents, mulch, and landscape fabric could have eliminated 95% of it.

    - two man crews pushing human powered spreaders around properties and dragging miles of hoses where one man on a motorized sprayer/spreader could do a better, more precise job, faster.

    - I pulled up next to a guy with two cheap belt drive wb fixed deck off-brand mowers. Two workers in the cab with him. Maybe if he bought better equipment he could hire one worker to run it at $14/hour rather than two at $8/hour and pocket the difference as added profit.

    In most industries they have made great strides to use technology to make what economists call increases in "productivity". This "productivity" increase is what makes our society affluent. It means each person is producing more work per hour, so they get a share of that increased productivity in the form of higher wages. Only in this field and construction and a few others do we still do things the stupid way. Using manpower rather than machine power or smarter ways of doing things. Today one accounting clerk handles more data than an office floor full of bookeepers using paper ledgers did 40 years ago. He also makes more money doing it. Imagine if they still made cars with all human welders instead of robotic ones? Or room fulls of typists using white-out on manual typewriters instead of word processing software on pcs?

    Other examples.

    They can build homes in factories now, use modular technology to make things fit together almost like lego or "snap on" toys, yet we are still out there stick-building homes.

    When you place an order at a fast food restaurant (or any other, actually) you have to read the menu, then tell the living dead/sleepwalking/suicidally depressed "fast food worker" at the register what you want and he pushes the buttons on the touchscreen with pictures on them since he can't read well enough to push buttons with the name of the food on them. Why not just have the customer enter his order directly into a terminal and then either pay there via card or cash or pay a cashier when he picks up his food? I hear this is right around the corner, btw. Grocery stores and retailers are already doing this in some areas. Why not pay one clerk $14/hour to watch 4 checkout lines rather than 4 workers $7/hour?

    The availability of an endless stream of cheap labor is actually hurting us by holding back advances in productivity through improved methods and technology. There is not a "labor problem" in the industry, there is an "innovation problem" by management. Unfortunately, the more innovative personalities seem to gravitate into other fields. Part of the skill set of being a landscaper is often a sense of being very practical and conservative.

    I think that once industry leaders and larger companies figure this out and go to a "high paid/highly trained , low number of employees" business plan to solve their labor problems, the rest of us will be able to follow and maybe the industry can regain some semblance of respect in the public's eyes. Some jobs will always require old fashioned manpower, but there is a lot of room for improvement.

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