Reason? Money.

It seems to her that we are unfair because we don't pay her a "Living Wage."

What is a "living wage"?

To give some background, she is a single mother of 2. When she joined us, she had absolutely no experience. We started her at $7.50 an hour because we knew what it was going to cost us to train her. The Government pays all but $25 per week of daycare for her children. Today, we are paying her $9.00 an hour and we pay 50% of all of her insurance. She has near total flexiblity as to what time she comes in and leaves as long as she puts in between 35 and 40 hours per week. She works in the sign department running vinyl cutting equipment; and, applications to be applied in-house.

I accept that as a just goal for all businesses except for the fact that government has burdened all of us with too many regulations and taxes, part of which seems to have compensated your employee.

I don't know Glenn where to come down on your situation, you know better what you can afford. The only time I see red is when I hear business people claim it is their right to get the maximum potential out of their employees at the lowest possible cost. We are talking about people not economic units.

I wish her the best in finding a job that pays her what she is making now and offers her the flexibility in working hours.

We could pay the salary she is making along with the benefits but we couldn't offer (read that wouldn't) the flex time option. We would, however, pay the full going rate for her medical insurance.

General shop help in our area wouldn't/couldn't/shouldn't expect to get paid much more than want she receives now. Especially with only 2 years experience and that being all supplied by you.

Wages from area to area are going to vary based on the cost of living. My opinions are based entirely on what it costs to live in Western New York.

It's a real shame that she is going to leave your employee. It's a pity that the "loyalty" factor lost out to money. You might consider picking up the balance of her medical insurance as an incentive to stay. I am only considering what it is going to cost you while you search for and train a new employee.

the income level for poverty according to the 2001 charts is $14,630 for a family of three.

http://aspe.os.dhhs.gov/poverty/01poverty.htm

Maybe she can move to Niagara Falls - where you can buy a house for less than $30,000. Maybe I should move out there and work for you, Glenn. That's more $ per hour than I make here.

I don't think there is an easy answer. You know what you can afford to pay in your shop. We can't tell you from a 100 or a 1000 miles away what would work best for your area.

Whatever happens I hope it is on an amicable basis, since the schedule flexibility will be tough to match in a new job and she might have to come back in the future.

Sure everyone will vary from time to time but keeping that in mind is this person making you that kind of money? If she happens to be making you 5 or 6 times what you pay her maybe you are the one at fault here.

Here are the figures as I know them at this point.

We pay her $9.00 a hour ($360.00 per week).
We pay $350 per month of her insurance.

4.3 weeks = a month.
This translates to $1898 per month or $22,776 per year(not including what we match in her taxes - FICA, workman's comp and so on).

We also provide 3 days of paid sick leave and two weeks of paid vacation after working one year. We also gave a week's pay as a Christmas bonus.

Last year, we were part of a program at East Carolina University's Masters program. A team of Masters students had the task of doing a study of our business and the industry for our region.

According to their study - in our town, we paid more per hour than any other sign shop. The average pay for someone in my employee's position was about $7.83 per hour. Starting pay averaged $6.00 an hour. No benefits.

For "electrical" sign shops, the pay and benefits were slightly higher than what we were paying.

A new employee that we took on just a few months ago used to live in Maryland. She worked at a unionized sign shop for 9 years. Before she left, she was earning $17 an hour plus full benefits handling the vinyl end of things (no digital stuff). She paid back $1200 per year in union dues. During those 9 years, she was layed off when business slowed down and rehired when it picked up. She was unemployed and drawing unemployment for roughly about 2 months out of each year. The shop she worked at averaged about $10 million in gross sales per year. Which brings me to my next question.....

What percentage of your gross sales is spent on labor costs - 15%, 20%, 25%? And, what criteria do you use in determining what constitutes fair pay?

After a person works for us for one year, we look at the last 6 months of production (the gross) and pay that person roughly 20% of what they produce. In the last 12 months, she generated about $90,000 gross. This means that for what she produced, her labor costs were 25.31%. According to the ECU masters team that did the study, her labor costs should not exceed 20% of what she produces. Another 5% of labor costs goes to other labor expenses - secretary/receptionist, owner's pay and so on.

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Cheryl, I want to pay my team more. I'd like to pay all of them $20+ more per hour. But, to do so, I'd have to raise my prices way beyond what my market will bear at this time. And when you consider the fact that the monetary value of vinyl signs have steadily dropped over the last several years....well, you see my point. I've tried training her to do other types of work, but she hasn't been able to do it. (That is not to say that her desire wasnt' there. It was. But she was physically unable to do it.)

[ January 01, 2002: Message edited by: Glenn Taylor ]

If she didnt like what you are paying her or she felt she was worth more, she should have come to you earlier and explained the situation. BUT she didnt come to you so tough cookies.

Now on the other side, I'd laugh at $9/hour too. Fast food joints are hiring at $7.50 or more and if you sign up for the crappy shifts you can make $8 or $9 easily.

Don't take her actions personally, and don't question yourself too much. The figures you are quoting "feel" right to me. It's a good pay, especially with the flex time.

However, she's right. It is not a living wage for a single mom with two kids. I think she's a fool to leave, though, unless she has another (higher paying) job "in the bag."

You are an extremely kind person and working for you must be a joy. Be careful not to let her make her reality your reality.

Just remember you are both right on this one, and chalk it up to experience.

Next time, why don't you salary your employee? Don't mention hourly rates. Just talk in annual figures. This way the only thing the employee can compare the wages to are other positions offering salaries, which are usually more executive level jobs. It will make your employee feel more valuable.

I've spoken to my boss (Mom) about it. Right now she's against salarying (spl?) anyone. She had tried it back in the late 80's and production went down and expenses went up.

Something I'm toying with is some sort of performance based bonus system. For sake of discussion lets say that we have to gross $28k per month to keep our doors open. What I'm thinking about is giving them 10-15% of the gross of what they generate beyond the $28k baseline divided by the number of people who work production. The problem is in working out the details. One thing is that of the gross, at least 15% must be net profit. Otherwise there would be no funds to pay the 10-15% bonuses and the additional taxes they would incur.

[ January 01, 2002: Message edited by: Glenn Taylor ]

Don't feel bad. Personally I'm sick of the attitude that, "Things are expensive. Especially being a simgle income family" cop-out I read above.

It's not your fault she is a single mother...you had a job opening for shop help, you told her what the starting wage was going to be, and I assume what she could expect to make after improving her skills at your expense, and it sounds like steady work for an uneducated person.

Should you have offered a male $9 an hour to start, but a single mom $12 for the same job just because she put herself in the situation she is in? I think not.

I'm not trying to be callous, and I don't know her situation...maybe her husband died...maybe she got pregnant and her boyfriend left her...who knows...but who cares? You have a business to run. The job is worth "X" dollars whether you're male, female, have a family or not, are black, white, pink or rainbow colored.

I have to say that my business is a "sideline". I design graphics for OEM RV and Boat builders for my career as well as freelance art. I don't have employees, but if I did, I would be compassionate and do what I could yet still realizing that a certain job is just not worth more than a certain wage. It sounds like you were plenty helpful to her....full time job, health perks, vacation, bonus....

What does she think her job is worth? $30,000, $40,000? Nah...I say you're a fair man who was plenty lenient and kindhearted to this gal....let her go seeking better opportunities and wish her luck in her future endeavors.

I fully expect to be flamed on by Socialists that expect the government and employers to do everything for them without taking any steps to better themselves.

I look at it this way....Glenn: You are taking all the risks being in business for yourself...and it seems you have a nice operation going....let her step out and take a risk and go into business for herself and see how she would fair.

I then explained I was paying her top dollar for what my little shop was able to afford. She knew my long term outlook, I wasn't looking to get rich, I was there to satisfy my exsisting clientelle for the timebeing and to accept new work if it didn't mean overtime etc., because my new son was my top priority for now. She accepted those terms.

She ended up staying on eventhough another shop offered her more $$$. She enjoyed the flexibility I gave her plus the incentive of bonuses plus the responsibility and free reign she had. She could also take her holiday pay one day at a time or all together; it was always her choice. She was a weekend camper and this suited her well! Money isn't EVERYTHING.

She ended up quitting anyway, due to her pregancy. But she left happy. If they plan to move on, they probably have something else cooking in the fire we aren't aware of.

Then again, if she would stay on for more $, have a sit down with her and ask her what her expectations are. If she's a vaulable asset, see if you can put her to part time with her desired wage, but ensure she's 100% productive at your hourly rate. Easier to do if she's part time... you have more time on her days off to line up extra work for her to output.

Bottom line - a single mom with 2 kids needs more money than a single teenager living at home. She'd probably give up ALOT in order for the higher income, so she can provide for her kids. That's not soley your responsibility to provide that, however if she's valuable enough, it may be worth your while to try a temporary hefty raise and document her productivity to see if it flys, with her knowing it's a trial. All depends on how valuable she is to your shop.

I don't consider my job a joke. I carry alot of responsibility, especially when sitting in the dispatcher's chair with an officer out in a possibly life-threatening situation. Not only that, but I have been trained in several departments to be able to cover people on a moment's notice.

I don't think it's fair for people who can easily afford to pay more, to belittle those who can't. I would like to make more, but I also realize that I work for a non-profit organization. I have to weigh everything associated with the job, not just per hour monetary compensation.

That's why I pointed out about the schedule flexibility. Wish I had that. I have to work every Saturday. No choice. Which means I finally hook up with a Letterhead... and can't go to Letterhead meets because of work. That was a sticking point in whether or not I took the job. Then to get bugged by someone here awhile back because we were unable to go to his meet (supposedly I was just making excuses) - but that a TOTALLY different subject.

I pay my help a "small" hourly rate and then an added amount for how much and what quality they produce. It has left the income amount and quality of their job up to the employee. If they work hard and take pride in the work, it shows and they get compensated well, and promotions are in order. If they are slackers and don't care about their work, they usually don't have much reason to stick around long. Nobody pays me for doing nothing and likewise I can't afford to pay someone else for doing nothing or next to nothing.

I just lost an employee, who was a good worker, but had too much flexibility and not enough self-motivation. He was making as much as $850/ wk. CLEAR when he worked steadily and as little as $120/ wk. when he could not get himself to work before noon, leaving before five, and working when he felt like it. He listed the reason for leaving as wanting a more stable income.

Like I said, the ball was in his court, there was plenty of work to be done, and once the work was done plenty of compensation to be had. See Ya...

Will more money be all it takes to make her happy? I worked for a large company for 8 years. I hired on making $5.75 an hour. I was promoted 4 times in 6 years. I was salaried for the last two years making almost $65,000 a year as a Human Resources Manager. I WAS STILL NOT HAPPY! I was not where I wanted to be in life with the job. I had my own plans for myself. That was a big part of the reason I left. My job was consolidated to Atlanta, my function was no longer needed in Birmingham. They offered me other jobs within the company or cash. I took their hand off grabbing the money.

My point being have you talked with her about her future? Is money her driving factor no matter if she is happy with what she is doing or not? If that is the case their will always be a job somewhere that she can make more money. Maybe you'll feel better about your decision in the end either way if you know.

Employees are people, everybody is different. It could be that she don't really don't want to leave, but financially doesn't have a choice. I know if I where in your shoes I would feel better if I knew the entire situation before I made any choices. Decide if you can possibly help change the situation or not. You must care about the employee or you would have never asked you would have just let her walk. Does she have another job lined up, or is she just going looking. Jobs are extremely hard to find around here right now, it may be the same everywhere.

You must be "nuts" talkin about my privates.
Ok, let's compromise...I'll untwist my jockstrap if you unsinch your girdle. All's I'm saying is that just because someone is divorced or whatever and alone with a child doesn't give them any special priveledges (sp?) in my book. Same pay for all, for the same job description.

The harder you work, the luckier you get. Do a good job, and improve your skills through higher education, apprenticeships, etc. and I'll bet a person will find themselves worthy of commanding more money.

For cutting vinyl and weeding it??? I could train a monkey to do it for free. Heeheehee....well I might have to give him a couple bananas.

Sure, I'd figure in the "compassion for humanity" ideal...I'm not totally heartless...but it would be for a loyal employee going over and above the call of duty not a low level employee just whining about money. That type is never satisfied. They think you owe them the shirt off your back.

Now, if this girl told Glenn, "I need to make more money. What can I do to make myself a more valuable employee to gain a wage increase?", now that's a different story. More skills and responsibilities equals higher wages. I didn't see from Glenn's post that she was interested in doing anything different to earn more money.

Now excuse me, whilst I go slip a "cup" under my jockstrap...I suddenly feel "unprotected". Teeheehee

[ January 01, 2002: Message edited by: Todd Gill ]

[ January 01, 2002: Message edited by: pierre ]

Actually, I think he said "girdle", not "girlie."

************

I wasn't being condescending...just like to pass-the-plate when people start talking about my jockstrap.

Glad to see you're a 1911 user...although I'm partial to my SVI Infinity 1911 and Washburn.

She is her early 20's. Yes, she had the two children before we hired her. She was a waitress at her previous job.

We also helped set her up with the daycare program. As part of the program, she pays according to what she earns. While the children are in the program, they (the children) recieve complete healthcare coverage. Again, she is only charged according to what she makes.

When we hired her, it was our policy to start anyone with no experience at $6.50 and then after a 30 day trial period we adjust the pay accordingly. We started her at $7.50 instead with the understanding that there would be no 30 review.

Six months later, we upped her pay by paying 50% of her insurance. Most employees cost us about $32 per week in insurance. She cost us almost $82 per week because of some "choices" she had made in the past. Last February, we bumped her pay to $9.00 an hour.

As I tell all prospective employees, pay is based on performance. The more you make for the company, the more the company can pay. This means taking initiative to learn new things. I like to cross-train where ever possible.

As part of my management style (if there is such a thing), I like to keep things on a casual level, but with known expectations. We have regular meetings and encourage everyone to participate. Each person is responsible to maintain their particular work area and are allowed to run things as they see fit as long as profitability don't drop and mistakes don't increase.

Is there a chance to make more money? You bet. If they sell a job on their own time and be responsible for handling the customer, we pay them 10% of the gross just like we would a salesperson working on commission. A few weeks ago, she sold a $1000 t-shirt order. She spent maybe an hour for the entire time she spent with the client (her children's principal). I don't think $100 for an hour or two's worth of work is such a bad deal. Not only that, but she gets the the same commission if the same customer places repeat orders even though she may not be involved.

[ January 01, 2002: Message edited by: Glenn Taylor ]