When the Congress reconvenes in September...

Discussion in 'General Industry Discussions' started by DFW Area Landscaper, Aug 8, 2006.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Messages: 2,116

    it looks certain that they will raise the minimum wage around 50%.

    How will this impact your bottom line?

    Most interested in hearing from residential lawn mowing companies with respect to non-driver positions.

    DFW Area Landscaper
  2. JB1

    JB1 LawnSite Fanatic
    Messages: 5,904

    curious , who even pays that low of a wage anyhow.

    FATWEASEL LawnSite Senior Member
    from NC
    Messages: 326

    None, I'm solo!:)

    Seriously though, I don't think it's supposed to be all at once but phased in over 3 years. It's really not that high of an increase had it been done like a costs of living raise which would have put it at nearly the same wage but it's going to be a sticker shock for alot of small businesses and the customers that buy their goods or use their service.

    My parents have a small restaurant and employ maybe 8-10 employees. My mom has never paid minimum wage, probably closer to what the new wage will be and she often times matches tips on slow days.:rolleyes: But she has some employees (cooks) that make several dollars more than the wait staff. My parents have some wiggle room since they pay more but the dilemma is if you increase your lowest paid employees, do you increase your higher paid employees as well? How many places can afford to do that across the board?

    I see middle income America just getting closer to becoming low income America. The lowest wage earners get a bump but the middle and higher ones stay where they're at. Product prices increase which reduces everyones buying power. The wage increase becomes a wash and the middle guy gets the shaft.

    Optimistic, ain't I???:laugh:
  4. stuffdeer

    stuffdeer LawnSite Bronze Member
    Messages: 1,617

    I know in Michigan...Its a big jump. Its going from 5.15 or something like that, to over 7, and then go up a little every year.

    I seriously think it will hurt the Youth trying to get jobs in our economy.

    For Example- 2 dollar a difference per hour, would you rather have an adult that couldn't find a job, and has expirence work at 7/hr, or a 15 year kid at 7/hr?

    And like weasel said, there isn't going to be a middle class anymore...Its going to be the poor and the rich. Which neither of those help our economy, our economy is run off the middle class citizens.

  5. dkeisala

    dkeisala LawnSite Senior Member
    Messages: 911

    Well, Washington and Oregon already have the highest minimum wages in the country and they're adjusted every year. On the federal level, it won't have an impact for me.

    I think the problem with minimum wage, besides the fact that $5.15 per hour is an embarrassingly low wage, is that it drives wages up for for more than just those working for min. wage, there's a ripple effect. Washington's min. wage is something like $7.35 an hour. The closer it gets to $8.00/hr, the closer my $8.00 an hour employee gets to working for min. wage. I need to either be OK with that or raise his wage as well.

    Contrary to popular belief, I don't think min. wage laws have as much of an impact on small businesses as they do medium to large businesses. In lawncare, the bigger companies can pay relatively low wages because they don't necessarily need all of their workers to be highly skilled, they have strength in numbers. Me, as a smaller operator, need my workers to be relatively skilled and cross-trained so I already pay a slightly higher wage than the bigger guys in hopes of attracting better applicants.

    Regardless of the impact, it all eventually gets passed on to the customer anyway. And if you think about it, low wages cost customers more than higher ones do. If someone works for fed. min. wage, they're grossing just under $900 per month. You can't live on that so they've got to get housing, food and healthcare subsidies to get by. So wages are either subsidized through payments to business or payments to government. By raising the min. wage, government is merely trying to shift the burden from them to us and I'm OK with that because people should be able to support themselves more and suck off the system less.
  6. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Messages: 2,116

    ++++the dilemma is if you increase your lowest paid employees, do you increase your higher paid employees as well?++++

    A guy making $8/hr in the heat operating a line trimmer can go get an easer job for $7 & change. It was 106 degrees here on Sunday. The $8/hr guys are going to want a bump to $10, aren't they? Then the drivers will want more too.

    That is why I started this thread. What are other owners thinking about this...the ones with crews?

    DFW Area Landscaper
  7. AL Inc

    AL Inc LawnSite Bronze Member
    Messages: 1,209

    I don't see the impact on my business. Even my entry level guys are making far more than minimum wage. I really don't believe it would be possible to get someone here to do landscape work for minimum wage, for the exact reason DFW stated, they can find something easier for the same money.
  8. dkeisala

    dkeisala LawnSite Senior Member
    Messages: 911

    I've never been one to raise wages across the board. I already pay more than min. wage. Raises are given on merit, ability, proficiency, attitude, longetivity, etc. Whatever the fed wants to do with min. wage, this will still be the case.
  9. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Messages: 2,116

    +++Regardless of the impact, it all eventually gets passed on to the customer anyway.++++

    I am not convinced the residential lawn mowing industry is smart enough to do that. When fuel went from $1.50/gal to $2.75/gal, we dropped prices from $25 to $20 in my area.

    DFW Area Landscaper
  10. dkeisala

    dkeisala LawnSite Senior Member
    Messages: 911

    Did the market drop your price? I don't let what everyone else is doing dictate what I do. However, if the market is that competitive and you can't compete, maybe it's time to get out, market your business differently or find ways you can compete.

    It's no secret there's a bunch of boneheads in this business and those that are undercutting aren't really in business. It's a lot easier to absorb a 40% fuel increase when you're not paying taxes.

    Nobody like to raise prices, especially the way the economy is going. While I'm having a decent year, I've failed to add very many new clients which is probably due to the higher fuel costs. People are spending far more money on energy these days and it's cutting into their disposable income which is where lawn care money comes from, it truly is a luxury for many. The fear is, by raising your prices you'll lose clients, negating the price increase. However, the clients you retain will be more profitable. You'd just be losing money on the clients that cancel so it actually makes more sense to raise prices than to not.

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