A lot of people have a lot to say about minimum wage. The prospect of it being raised to $15 an hour has the same people saying even more.
Most talk of minimum wage is speculation and platitudes, I find. The amount of at-odds and baseless opinions on the impacts of increases has made me wonder if minimum wage truly is a suitable baseline benchmark against which remodelers might determine a fair wage. The more I learn, the more I admire West Shore Home. Over several years, West Shore worked its way to a company-wide $15 minimum hourly wage—done without controversy or budget breaking. Wage growth was prioritized and planned.
Adjusting for inflation, the minimum wage was about $5 an hour more in 1968, back when median homes were $100,000 cheaper.
The more I learn, the more I think the only way for remodelers to have a fair minimum wage is to ignore the official one altogether and prioritize the process internally.
Let me explain.
Unfair or Absurd?
For one, minimum wage is very low—worth less now than it was 50 years ago. Adjusting for inflation, the minimum wage was about $5 an hour more in 1968, back when median homes were $100,000 cheaper. The reason is inflation, the way $5 can get you more today than it will a year from now—minimum wage doesn’t account for it. The bottom fifth of earners in the US have made roughly $16,000 a year since the ‘60s. Meanwhile, the top fifth has doubled its income, from $109,000 to $217,000—which a minimum wage worker would have to work 40 hours a week, 52 weeks a year for 14 years while never taking a day off to match.
A Rudderless Program for Minimum Wage
The problem is planning. Most countries with a minimum wage have official bodies that regularly evaluate and make advised, inflation-informed adjustments to their minimum wage, typically yearly or biennially. The US has no body nor process beyond politics. Our minimum wage increases happen by the grace of Congress—which is to say sporadically.
From ’96 to ’07, the country’s minimum wage was basically a flat line. Then back-to-back-to-back increases raised the wage by 40% over two years. After another 11 years of no adjustments for inflation, there is now a debate to raise the minimum wage to $15, a 106% increase.
No Winners
There are no winners here. Minimum wage employees lose purchasing power and never make it up because the wage trails way behind inflation, and companies lose financial autonomy by being forced to account for unpredictable, politically-triggered wage surges. The minimum wage overall loses because talk of increases and their impacts—data on which is conflicting and dubious—dominate a conversation that should maybe more consider the mechanics determining when increases should occur, how much they should be, and why they should be that much.
My Point on Minimum Wage
Remodelers aren’t the biggest minimum wage employers—our 2018 Wage and Benefits Study found remodelers pay relatively generous wages. But it’s not uncommon for an employer to use minimum wage as a reference or even go so far as to determine pay as a percentage above it—“we pay 10% over minimum” is something I’ve heard more than once. Of course, that 10% means more today than it will a year from now. Will those remodelers think to account for the difference?
The value of money changes and so it makes sense to me that so would the definition of “fair” as it relates to wages—if indeed a base wage is meant to be fair. I’m not advocating a $15 minimum hourly wage, nor am I condemning the idea. I am imploring businesses to revaluate what they think is fair and to consider implementing a policy to regularly revisit what that word means.
Related Stories
Registration Open for The Pinnacle Experience 2024
Register today for The Pinnacle Experience 2024 in Baltimore from June 26-28. Join the best and brightest in home improvement and remodeling for insight, advice, and relationship-building that will help you take your business to new heights.
Marvin Releases Switchable Privacy Glass Window
The privacy glass windows can be purchased from Marvin's Direct Glaze windows
Gas Ban in New Construction Considered by Chicago
The mayor-backed ordinance would impact all new construction
Working Toward Affordable, Resilient Homes
A new natural disaster protection act from NAHB aims to support hazard mitigation projects
The Remodeling Market Could Turn in Q4, Says Harvard
Repair and remodeling spending could see an uptick at the end of the year
Seattle Contractor Finds Grenade During Remodel
Polar Bear Construction Owner Vadim Kharkhavyy and the owner were equally shocked
New Independent Contractor Rule Faces Lawsuit
The Department of Labor submitted new criterion to judge when classifying workers
New Insulation Innovation Reshapes Our Thinking of Refrigeration
Whirlpool Corporation's latest innovation allows refrigerators to do more and be more
Jericho Home Improvements CEO Killed in Kansas City
John Bartrom founded the largest independent kitchen and bath remodeling company in the country
DC Attorney General Sues Multi-state Remodeler Curbio
A recent lawsuit filed alleges false promises made by contractor Curbio