They're Crappy Jobs, But Someone Has to Do Them

The push has been on of course, for some time, to hike the minimum wage, and in many states, they've done exactly that. The most recent one in California, where the state's minimum wage was raised to $20 an hour, has made quite a lot of news— for a variety of reasons, and not all of it good.

Most states will have their minimum wages set at around $15 an hour, with my own state, Illinois, being at that rate by next year.

Honestly, I come from a couple of sides on this idea. As most things tend to be, it's a more complex issue than most people realize. It's easy for me to blanketly say, "I am opposed," and generally I am. Because it is a complex issue.

There's more to consider than just the quality of life for the employees who are impacted by lower wages. Because there's one underlying thought here. Does a higher wage actually have a positive effect on the quality of life for the employees?

I contend that it doesn't, because more often than not, financial woes are the result of personal choices and lack of financial education than it is the result of how much one makes. In order to improve the quality of life for these people, you have to first change the habits that are the root of their problems. 

But of course, no one is going to do that. It's much easier to just hand someone a few more bucks and wash your hands of any future dirt.

The biggest consideration is where the money comes from. Because money doesn't grow on trees and it has to come from somewhere, and unfortunately, the pockets of the businesses aren't as deep as many people tend to think they are.

It's mostly going to come from consumers. Or, in some cases, it's going to come from businesses pulling back on their labor. Either they will find more ways to automate and reduce staffing, or they'll close locations altogether to make up the difference.

At the same time, I do fully recognize that the difference between the wages earned, and basic needs being met have to come from somewhere as well.

Taxpayers will have to pony up on that one.

It used to be that jobs like retail and fast food were secondary jobs or entry level jobs, or just simply jobs that older people used to supplement their retirements. They were never intended to be careers. I think they probably still shouldn't be.

That being said, there is some truth to the idea that these jobs now make up a large number of all jobs, and so it becomes a question of whether or not we should consider these occupations similarly to other ones. 

Between Walmart, McDonald's, Burger King, and Target, they employ around 2.6 million people combined, in the United States. But consider that in the entire restaurant industry in the U.S., 12.5 million people hold these kinds of jobs. 9.8 million people work in retail.

The labor participation rate as of April of 2024 was roughly 62.7%, meaning that fast food and retail jobs account for around 11% of the total workforce.

But there are many other types of jobs such as secretarial work, certain manufacturing jobs and receptionists and call center workers who are also paid close to, or slightly higher than, these state minimum wages. So, the actual number of employees in this wage range are actually representative of a much higher percentage of the total participating workforce.

A full-time worker at these wages will earn somewhere around $31,200 a year, which is $28,028 below the average per worker income of $59,228. Median household income is roughly $78,238, meaning a household with two workers in fast food or retail would pull in roughly $62,400 or $15,800 less than other average households per year.

Raising the minimum wage even higher than $15 could help to at least close the gaps. But again, at what cost? Right now the average cost of living in the U.S. is just under $70,000 a year. It can be presumed that higher wages would lead to higher costs, and thus, closing the gap would be a moot point because the cost of living would raise proportionate to the cost of the higher wages.

So, what do you do? Frankly it becomes sort of a damned if you do, damned if you don't kind of a situation.

I think the emphasis should be on financial education so that any working American is afforded not just an opportunity to earn a wage, or even a livable one, but can actually grow financially. Because it goes back to a saying I cite often, that it doesn't matter as much how much you make as it matters what you do with what you make.

While I am not for arbitrarily raising wages, I do take into consideration that just because these jobs require very little in terms of actual skills, they are still jobs we need to be able to fill. We have to have these workers if we want our lattes and doughnuts and Whoppers—or if we want to have more than two or three lanes open at checkouts.

Someone has to do these jobs, and perhaps working in them should not be a sort of punishment.

But going back around full circle, we also cannot expect the money to simply materialize out of thin air. We have to consider the actual balance sheets of the businesses impacted by paying the higher wages. If they can't function, or go under, no one benefits. Not the workers, and certainly not the consumers who want to be able to patronize these businesses.

When we consider wages, we have to be cognitive of all of the impacts of it. On workers. On consumers. On the businesses. And on the taxpayers. Because when we raise wages, it impacts everyone.

Everyone deserves a good quality of life if they are putting in the work. But you can't take from Peter to pay Paul in order to do it. You can't just pick a number off the top of your head and say, "Okay, we'll pay that." And you also cannot assume that the wage is the only problem to solve.

Because again, it's complicated.

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© 2024 Jim Bauer

Money is What You Make of It, Not How Much You Make

Because I write a lot about money and opine a lot about money, I tend to get all of the usual types of responses that are almost entirely, in my opinion, generic, and all easily debunked or argued against. The rich are all greedy and just want to hoard the money. Workers are exploited with low wages. You can't get ahead in the world if you don't make a lot of money. You can't live on the kinds of wages most companies provide.

My favorite one is, I can't afford to save, therefore how can I invest?

In part I say easily debunked or argued against because, like most people, I started at the bottom. Not the top. Yet despite that it has not stopped me from being financially secure, getting ahead, or being able to take advantage of the myriad wealth building opportunities everyone has no matter where they exist financially.

Yes. There are limits. But what the real limit is, is how little people recognize what the real opportunities are, how accessible they are to everyone, and what opportunities are afforded us by what the rich have created to have a shot at joining their ranks on some level.

I am not going to say it is easy. By no means. But nothing that is worth doing in life ever is. It's hard because it is supposed to be. It is hard because the challenge is what drives us forward despite what limitations we have or what hurdles we have to overcome.

I took my first job working for Dominoes Pizza at 14 years old putting circulars on doorknobs advertising pizzas to potentially hungry customers. They paid me $2.85 an hour. That was in 1987. In 1992 I went into the United States Navy and, according to my Social Security statement, by the time I got out in 1996 I was making $13,418 a year.

I started investing shortly before I left the navy. And granted, my expenses were low because I lived on the ship during the time and most of my food was paid for. I started investing with roughly a few hundred dollars. 

But I had a mindset. Live on 80% of your income and sock away the 20% you don't need. When I left the USS Enterprise (CVN-65) in April of 1996 I had a total savings stash worth only around $3k. That was from money saved as well as money earned from investments.

Even 10 years later, according to my Social Security statement, I was only earning $36,951. But during that time I had real expenses. I bought my first investment property when I was 26 in 1999. Most of the downpayment and my ability to do that was based on proceeds, dividends and gains earned on saved money in the stock market.

I continued to save and invest at rates of 20% or greater, acted frugally, and continued to invest and learn about various strategies in the stock market. 

Never once did I ever think of the rich people I worked for as greedy. Never once did I allow myself to feel exploited. Never once did I complain about low wages, and certainly I was mostly always paid low wages.

I worked for big companies like Quad Graphics, Kraft Foods, Coca-Cola, Smurfit-Stone Container Corporation, and Nestlé. I even did a short stint as a pest control guy for a small company called Batzner Pest Management in New Berlin, Wisconsin.

My best year was at Coca-Cola, working in mid-level management and earned $60k. After Coca-Cola I took pay cuts to take on new challenges, and my last full year at Batzner I only made about $36k. The key here is that no matter how much money I made or didn't make, I never deviated from the plan. I never made an excuse to stop saving or to make changes to my investment goals and strategies.

The one thing that remained static was my thinking that it never matters how much you make, but rather it matters what you do with it.

More importantly, throughout my earning career one thing I never changed was my lifestyle. If I made $60k in my best year at Coca-Cola or $36k in my best year at Batzner Pest Management, I was living the same way, saving the same way, and investing the same way.

I even took time off frequently between jobs. In fact, between Nestlé and Batzner, I took nearly two years off.

Because of my investments, my bottom line changed little. My money was making money for me, and while it may not have been a period where I was necessarily getting ahead at the same rate as before the hiatus, I was still not going backwards.

And because despite the lack of new income coming in from a job, my money was still earning an income, and my lifestyle did not change much.

I will admit I did have to make some adjustments. But not unlike adjustments I had to make after I left Coca-Cola and took major pay cuts to do that. I was always viewing money not as a crutch or a limitation, but rather as an opportunity. 

If I look at my entire lifetime to date W-2 wages, from 1989 to 2022, according to my Social Security statement, my lifetime earnings to date are roughly $975k. Breaking that down that's roughly an average annual earnings of $29,546 a year.

I won't tell you what's in the "bank" now. But I can tell you it is an impressive amount of money considering what I ever had to work with. And that amount that's there now could never have been achieved if I had accepted for myself, the generic responses I get now when I talk about money or opine about it.

I lived on paltry wages and saved and invested them. I held a long-standing belief that opportunity is there for anyone who wants to take the time to learn about them, understand them, and exploit them as opposed to ever telling myself that I was the one being exploited.

In other words, rather than make excuses, I took action. I never once was able to allow myself to be convinced I was the underdog and doomed to poverty by the system or by circumstances not necessarily in my control.

I instead made my own circumstances and controlled my own fate and dictated my own financial future. I took hard the stance, no one can stop me from achieving what I want, because I have seen others before me do it. I always saw the possibilities. 

In no way was my desire to ever become a victim of circumstance or blame others for financial issues I may have had along the way. My financial existence was mine in the making, and mine to determine. If I took a job that paid a wage I didn't like, it was never once thought to be the responsibility of my employer to kick more money into my paycheck. It was my responsibility to kick more money into my paycheck by making decisions to increase my wages or wealth through finding a better job or making decisions about money I was already making to increase its value or worth.

When I write about or opine about money, I am doing so from a point of view of someone who never made much money but was able to build wealth anyway. It's part of the reason I am so strongly opinionated about it. It's why I get a little hot under the collar when someone says to me, "Yeah, you just say that because you have money."

You're just another rich guy lecturing the poor.

But I wasn't always that guy. I was the other guy. The guy who averaged under $30k a year who got somewhere despite it. Do you want to call $30k a year a decent wage? Hardly. And again, I lost ground several of those years, taking time off between jobs. Living off investments and making no income. And despite low wages and year-long hiatuses, still made my way through it. Still walked away with more money than I left off with.

The bottom line is that if you want to be a victim, that's a choice. If you want to allow yourself to be limited financially by circumstance, that's your choice. If you don't want to participate in the opportunities everyone has to get ahead, that's also your choice.

But it's not the rich guy's fault. It's not the cheap boss' fault. It's not societies fault. It's not the government's fault. It's not wage disparity's fault. It's not rich business owners or shareholder's fault.

It's yours.

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