What's Your Responsibility to Employees?
Posted Jun 24, 2014, Published June/July 2014
One of the reasons lab owners prefer to fly solo is that they have no appetite for dealing with the challenges that come with personnel management.
There’s no doubt that more people mean more issues. However, there are also as many, if not more, positives for having employees, key among them is that they play a critical role in a business’s ability to grow and prosper.
Listening to recent news discussions for or against raising the federally mandated minimum wage to $10.10 has me wondering: What do you feel your responsibility is to your employees? What obligations do you feel you have toward the people who help build your business? What considerations play a role in how much you pay them for their time and contributions?
Most of the time lab owners tell me they pay entry-level employees the wage necessary to attract them in their regional area. We also know from our Wage Surveys that average laboratory pay scales exceed the current federal minimum wage. So I throw this question of responsibility out to you from a philosophical perspective.
How far are you willing to go to protect your employees’ best interests? Is paying a living wage a moral mandate? What are you willing to sacrifice to ensure they have job security when business is down?
The recent protest for higher wages by McDonald’s employees is in the back of my mind as I ask these questions. Just in case this story hasn’t made it to your ears, here’s a brief recap: At McDonald’s annual shareholders meeting last month, employees were among the protesters who showed up with picket signs demanding a minimum wage of $15 per hourª.
The average McDonald’s employee is 29-1/2 years old; the corporation has 150% turnover. We can all agree that it’s extremely difficult to live on the current federally mandated minimum wage of $7.25 per hour. On its website for employees, the corporation suggests ways to live on this salary: one suggestion is to hold a second job; another is to sign up for food stamps; a third explains that if employees break food into small pieces, they’ll eat more slowly and feel more full.
Of course, our community is not in the ballpark with McDonald’s; as small business owners, we maintain pretty close relationships with our staff members who, in many cases, are also family—or feel like family!
Nevertheless, I was curious to know the take-home pay for a minimum wage earner so I did the math. These are wages that often need to cover the fixed—and basic-needs—costs of housing, food, transportation, childcare, utilities and other miscellaneous day-to-day expenses. Like a picture, the math—based on 52 40-hour weeks—says a thousand words:
For a single person: $7.25 per hour is $15,080 annual gross; a net of $1,147.51 per month (see below).
At the proposed national minimum of $10.10—the one that failed in Congress—that gross would be $21,008 annually; a net of $1,551.72 per month (see below).
While there are a lot of facets to this whole topic, when you make a sample budget with any of these salaries, the numbers are sobering. I look forward to hearing your thoughts. Please meet me on The BRIDGE at LMTmag.com or email judy@LMTmag.com.
*Here’s the math for 52 40-hour weeks:
At $7.25 per hour, the gross is $15,080 - $1,309.88 (WH/SS/FICA) = $13,770.12 annual net [at this level, $6,200 of salary is tax exempt] = $1,147.51 per month not including state or city taxes.
At $10.10 per hour, gross is $21,008 annually - $2,387.32 (WH/SS/FICA) = $18,620.68
annual net = $1,551.72 per month not including state or city taxes.
ª At $15 an hour, the annual gross would be $31,200 - $4,154.80 (WH/SS/FICA) = $27,045.20 annual net = $2,253.76 per month not including state or city taxes. This month, the city of Seattle became the first in the country to pass a $15-per-hour minimum wage.
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Matt Haugan · Technician at Freedom Dental Arts
I wanted to give a few thoughts regarding the question about our responsibility to our employees. I started out in a full service lab when I was 19, making a tad over minimum wage, 6 something if I remember correctly. Was 6 something hard to live on? Yes. I was recently married with a baby girl on the way. Did I hang a sign around my neck in protest to my employer to give me an undeserved raise? No. I worked hard, and I learned as fast as I could.. Each day was a challenge to see how much faster and better I could do the model work than the day before, and when I finished the model work I sat next...See more to the waxer, watched, and learned... patiently. After a few months I was waxing up copings that the boss was happy with, soon after that I was waxing full contour (poorly, and slowly but the boss was happy with my ambition). Not long after I started (10 months or so) I received my first raise, not to $15 an hour that McDonald's employees demand, but it was a raise nonetheless. I didn't start making $15 an hour until somewhere around 23 or 24 years old, that was only 6 years ago. I continued this for 11 years, moving down the east coast and half way back again working at a handful of labs. Some labs paid better than others, some had different philosophies, some treated their employees differently than others, but either way I worked hard and continued to climb up the ladder. Along the way my wife and I had another baby boy, I worked whatever hours I could and as soon as I would get home she would be off to work at any one of her part time jobs and I was left as a single dad at night. At 26 I opened my own lab with a good friend (I'm now 30).
Is a dental lab McDonald's? No, but its a business all the same, and every business works off of the same basic principals. The statistics stated about McDonald's may be true, but are rather misleading to one who does not fully understand how a business operates. Is the starting wage low yes. But many earning that wage are not earning it for long as the facts lead you to believe, they cycle through many many people. Some are promoted, some move on to other jobs then more are hired and start at the bottom. McDonald's sells hamburgers, and if one wants to make selling hamburgers their career than shouldn't they attempt to climb the hamburger selling ladder? McDonald's gives many opportunities to its employees to do so, they even have their own Hamburger University for their future and current managers. Most employees will start at the bottom, they aren't stuck there for eternity, they can climb the McDonald's ladder rather quickly no different than I did, but it takes some work ethic and ambition. My best friend in high school worked at McDonald's and in less than a year he was promoted to a supervisors position. A few years after he opened his own pizza place. Should the minimum wage be increased? Maybe, but demanding $15/hour is beyond absurd and unsustainable for many companies. The outcome will certainly be outrageous prices for hamburgers which will result in much lower sales volume, resulting in many fewer jobs. We'll see how Seattle's experiment holds up in the next few years. I could make a few predictions.
Is paying a living wage a moral mandate? That's a loaded question. What is a living wage? Because our expectations seem to be rising. Many people in our country would call things they didn't have only 5 years ago "necessity" today. I bought my first "smart phone" last week, something that I'm certain many bottom of the ladder McDonald's employees have. Couldn't I afford one? Yes I could but I didn't see it as priority, so the extra money it takes to buy and operate a smart phone went to other things higher on the priority list. I have no employees yet. I could use one but sure couldn't afford one. So much more than just the "wage" goes into an employee's salary, like insurance, employee tax, vacation and sick time, etc. When and if the time comes I believe I will have to pay well and will gladly for the right person(s). Any fresh from school or "off the street" technician would necessarily start rather low, at least until evaluated for a few months. The more promise and ambition shown the more they will earn, that's how you climb the ladder.
Taking care of your employees should no doubt be somewhere on the top of the employers list in my opinion. But there has to be some accountability on the part of the employee as well, if you don't like your income situation then do something about it, that's what is so great about a free market! The easiest bandwagon to climb on is the one that is pointing the finger at someone else, we ought to spend a little more time evaluating ourselves.