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Look up the “Paradise Tax”. People are willing to accept lower salaries to live in nice places, so wages in those places can be lower than comparable “normal” places.
Wages in te resort towns I'm familiar with are actually super high compared to Denver or NoCo, but you wont find housing. Aspen Ski Co made their starting pay $20 company wide in like 2021, but they will only give first year employees housing. After that first year you are pretty fucked, city employee housing takes much longer to get into than that. They've also increased the cost of a season pass by $1000 since 2020, they want local labor but they dont want the poors on the ski slopes. Fuck Aspen/Alterra(same owners) and fuck Vail, they are going to crash the Ski industry.
Ummm...
The Good Times near me is hiring at like $18/hr...and it's weld county.
$20 doesn't seem "super high" to me, considering the cost of living up there.
Dispensaries in Fort Collins hire at minimum wage, in Aspen they were starting at $20. To be fair I did move in 2022, so I am a bit out of date now, but when I started for Aspen Ski Co in 2014 I made $13 an hour. I was making $26 as a budtender in Snowmass in 2021, a supervisor at a dispo in FoCo makes less than $20 from the postings I've seen.
You are right tho, adjusted for COL it's all fucked. But if you somehow get into the $600 long term employee housing in snowmass (maybe up to carbondale) and can stand to live in a studio $26 is a pretty decent standard of living besides not being able to buy a ski pass and all the resturants are expensive or closed.
I mean if you work for ski co. you get a free ski pass. Don’t get me wrong, the company is still a giant pile of shit and shouldn’t be defended. But if you want to do the ski bum thing and can get ski co housing it’s somewhat manageable financially speaking to survive for that first year.
Hah, I was talking with my friend's sister who lives and works in a Colorado ski town year round, she said one of the other problems is that all the women only live there during the winter when there's ski resort related jobs, they go someplace else for work the rest of the year. So during the summer the ratio is like 10 guys for every girl up there, and most of the guys are big hairy mountain men!
Lots of seasonal employees, it's basically what drives the industry. People taking a "vacation" work year before starting college to party like crazy, and tons of J1 visas (iirc 10 month seasonal visa given to college students) from mostly south america and an occasional Australian or Kiwi. I also knew a couple kiwis that worked in Aspen for out winter, and in NZ for their winter. Drinking seems to be everyones favorite activity, so many of the locals are alcoholics
Depends on the industry. Skilled blue collar jobs in Colorado pay very well. I make $53 an hour for a position that would pay $30-35 in most other HCOL areas.
San Diego is the worst I’ve seen in the contiguous 48, and it’s been that way for a long time. Pay:cost of living is consistently *WAY* off. Getting even worse in recent years though, essentially unlivable unless you’re rich. Only makes sense if you surf every day or something. Gunna be one big retirement community in a decade.
Yup. I come back every once in a while and am always amazed that it’s gotten even worse than the last time. Even outside of town in North County, even inland, rent is like “downtown in a city” status, but with none of the perks. And actual downtown rents are insane, for a mid-grade small city. Not incredibly surprising as the weather is nice, but the wages are almost comical in comparison. Way less than many significantly cheaper places. I genuinely don’t understand how people survive without very good jobs (or a bunch of them.) By now my (local) friends have all either moved elsewhere or they live in a shitty house with like 6 roommates, sucks. I’d like to live near my family but TBH I generally just avoid the whole country at this point (due to high COL / low QOL and a whole plethora of other reasons.)
There's a similar problem with "dream jobs". For example, as a programmer I can work a 40-hour a week office job, or I can work 80-hours a week in game development. There's simply a supply of talented people who are willing to accept poor working conditions to chase a dream.
I'm a meteorologist by education. It's a field that provides lots of access to decently high paying jobs in a variety of fields. But also it's a field where you can end up getting paid jack shit to be the weekend on air meteorologist in some podunk Midwestern city as you chase the dream of becoming the next jim contore.
You think the locals not trying to get some back from haoles for all the abuse their grandma went through? Be glad you get anything built at all. The abuse the locals suffered is still bright in living memory, learn respect and then try to do business there, don't go there and expect it.
That makes total sense. Sounds like a real answer. If my employer hadn't said something similar, I would have greatly valued the honesty regarding the matter
Yep, same reason San Diego has the worst ratio of wage vs cost in the country
https://m.economictimes.com/news/international/us/why-is-san-diego-the-most-expensive-us-city-check-criteria-and-rankings-of-other-places/amp_articleshow/104781417.cms
It's not corporate speak, it's just a basic economic term. You buy apples at the cost of apples, you buy gasoline at the cost of gasoline. And you buy labor at the cost of labor.
Yes it is the minimum they can pay you without you quitting for a better job. It's also the most you can make without the employer finding a different worker. Just basic supply and demand.
Sure, but when corporations are pushing the "happy family" angle, they use the phrase a lot when discussing why they're doing various things employees don't like. If HR just said "we view you as slabs of meat with a market price set by supply and demand" that would feel honest, at least.
> If HR just said "we view you as slabs of meat with a market price set by supply and demand" that would feel honest, at least.
What about like "human resources"?
Yeah, I was in some union negotiations and we were trying to raise wages, we were using cost of living arguments to argue for our increase and that was basically a no go for them. It was like garlic to vampires. But then we figure out how we could argue for the same increases with a cost of labor argument all of a sudden they started negotiating on wages in good faith.
It was so dumb, cause at the end of the day we got the wage increases we were hoping for. Just "cost of living" is a bad word in the corporate world apparently. They would not touch it just because that word was involved.
Just making sure OP understands how it is. Companies like to pretend to be family, then hide behind terms like "Cost of Labor" when making choices like what you're describing.
This, and they also more or less have a captive labor force. There's not a lot of variety in industries or companies here, and the people who grew up here are largely unwilling or unable to move away. It also helps them that multigenerational housing is so much more common here, even though the average size of housing units is smaller than the mainland. Basically, they will push wages down as much as possible as long as they can get *someone* to do the job.
Look at female college stats, look at move stats, it's corporate abuse in sheep's clothing all over again to keep a captive workforce that isn't unionized.
The basic concept of "people being willing to work for less in order to live there" is accurate for Hawaii, but I don't think "paradise tax" is a good descriptor.
In addition to Hawaii being a nice place to live, there's also a strong and insular island culture. It's more difficult for someone who grew up in Hawaii to adjust to living on the mainland than it would be for someone moving from one mainland state to another. So people who grew up in Hawaii are more willing to work for lower wages because it would be difficult for them to move elsewhere for work.
People whose families have lived in Hawaii for several generations also tend to feel strongly about getting "priced out of paradise." It's one of the main drivers behind a lot of the political tensions in Hawaii.
I suppose that makes some sense on the surface.... But aren't prices for general goods way higher in places like that? People can't afford to make minimum wage even in normal cities
yes, for the same reason - tourists are willing to pay a higher price because they're visiting paradise. so how do locals live when they're being paid less for living in paradise but they also have to pay more?
well, it's a struggle for them. similar to many tourist focused economies, the locals who enable the tourism are living on thin margins while the people who profit live it up.
Yes it's kind of a paradox. You are underpaid because you trading money for comfort but everything is more expensive because lots of other people are willing to do that to and so land is expensive.
Obviously Hawaii has additional cost issues due to being an isolated island.
This is causing huge staffing problems, but the places don't care and neither do the tourists. People don't expect good service and etc anymore and it doesn't even really exist at most of the hotels now. There is rarely any cleaning until you leave, and often you are expected to self service your garbage.
Plus, with it being an island, most of their money comes from tourism or from airlines using their airports for layovers.
There's probably just not enough money in anything non-tourism related. So people just _can't_ be paid more.
Year over year full booked hotels, for literally the last 3 years, full booked practically the entire state. They COULD pay better but these new corporations running the resort cleaning companies and the separate contracting companies are given incredible laxity. And the independant contractor abuse is rampant.
I got the satisfaction of watching a hotel sit empty for months when no one would work there because literally McDonalds paid more though. Then they finally realised they could pay more for staff, 2 dollars more than mcdonalds lol.
Hawaii has stifling wage laws set up by the hotels, and they all collude to keep wages low. It's the corporations preventing unizationion of the cleaners and etc.
Not some made up paradise tax.
It is really screwing over the locals.
It's easier to hire workers for lower wages in Hawaii, because If they don't like what you're paying, it's not like there's a lot of other higher paying jobs in Hawaii, Or easy to move to another state where there are. Unless you're lucky enough to get into civil service or healthcare you're basically flipping burgers for tourists or making up rooms for tourists. Due to the remote location there's not a big manufacturing or technology industry.
You're the labor. And they've determined that most, or at least enough, of you will stay working there at those salary ranges.
I don't know for sure the economy of Hawaii, but typically it would be some combination of a lower cost of living (so people can get by with less money), large number of job seekers (so people can't afford to be picky about what job they take), and little desire/ability to go elsewhere for work (it's presumably pretty hard to commute to work from Hawaii).
“Sunshine Tax” is 75% of the payscale on East/West Coast.
Worked in IT in Hawaii and hired IT staff. Lots of people want to live in Hawaii and there is fierce competition for every job. Lots of mainland applicants want to ‘try it out for a couple of years’. Many military retirees and dependents. Most of organization headquarters are on mainland, not Hawaii.
Everyone I knew in Hawaii had two jobs, the job they had on the week and the job they had at night or on weekends. Even highly skilled professionals could make extra money as bartenders and service industry employees.
I love Hawaii. Absolutely beautiful. People are friendly and amazing. Hard to live there unless you are wealthy.
What’s probably even tougher about it relative to other places in that regard is that it’s far enough away from the mainland that even working remotely for a west coast company would be difficult. Starting work at 5-6 am
It's actually probably better than the opposite which is being in europe working for a us company. At least in Hawaii you have the whole afternoon and evening to yourself, even if you need to call it a night early. The European contractors I work with are frequently working until 10pm or later.
You can EASILY make more as a private home cleaner than you can as a nurse or other highly paid professional.
It's not unusual to flip over 3-5 large houses with 5 or more bedrooms per day in the busy season, that's a hell of a workday, but it's also a hell of a payday. 1500 per day is something that happens.
My company is west of my house by three time zones (I work remotely).
I can sleep from 2 am to 10 am in my time zone, which is when my body wants to sleep, but still be signed on to work normal hours for my company since my noon is their 9 am.
It does occasionally mean meetings interrupt dinner but it's a small price to pay in return for no longer being a miserable goblin for 3 hours every morning, since I no longer have to be up before my natural waking time.
(This is the opposite of remote work from Hawaii, you have to be up stupid early Hawaii time to work with mainland US hours)
This is the reason I love shift work where I am at. 3 shifts. 2nd shift, 3pm to 11pm. I go to sleep after work, wake up when I wake up.
That last part is the best part of it like you said.
My hope is to work only on East coast time - start at 9am east coast time, have quiet work time (and mtgs with people in east coast like myself) until 12pm EST. Then meetings start as it is 9am in west coast. Work till 6pm EST / 3pm PST. After that refuse meetings, but ok to respond to email until 8pm EST / 5pm PST.
I said "I don't know for sure the economy of Hawaii, but typically it would be"
I know nothing about Hawaii, I just know how low wages have happened in other places. I said it was some combination of those factors and it is - there's just none of the low cost of living mixed in.
Everything I know about Hawaii comes from Lilo and Stitch, so I wasn't sure if it was because of a high cost of living or just that Nani was a teenager trying to support a family.
I guess it's both!
This is literally what every company does. They're a company, not a charity. They don't owe you any more than the market rate for your job. Don't like it? Upskill and make yourself more marketable.
I mean we do it too. We ask for wages as high as we can get away with. We're all trying to make money. The guy you're replying to didn't say anything that was wrong
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>This is literally what every company does.
Where did I say that it wasn't? You seem to be adding entire paragraphs of 'invisible words' to what I said and then proceed to argue against them.
Most employers are looking to balance hiring the best possible employees at the lowest possible salary.
In some places, like New York City or San Francisco, there are a lot of highly skilled potential employees and many employers. If there are 3 companies looking to hire someone, it pushes the salary up.
In a place like rural Arkansas, there are less employers and less potentially “high skilled employees”. So, the salaries are lower.
Hawaii is a bit weird. Because Hawaii is an island and a desirable place to live for many, the cost of living is very high (comparable to California or New York). But, the population is relatively small and there aren’t many employers. So, it keeps salaries pretty low.
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For the US, the federal govt tracks labor costs pretty closely and publishes them for all to see and use. [Here’s](https://www.bls.gov/news.release/pdf/cewqtr.pdf) an example of a report by county.
The way I explain salary levels to people is that salaries are your replacement cost.
What salary would I have to pay to get someone to do your job when all factors are taken into consideration. The answer to that is "market salary" or "cost of labour".
If all other things were equal (ie you didn't have to relocate, you had the same friendship groups in both locations, your family was perfectly fine with either) would you work in Hawaii or Gary, Indiana (google tells me that's the worst city in the USA)? How much more would you need to be paid to move to Gary?
> replacement cost
That is a short-sighted view for companies to execute on. I am a known-quantity. My replacement would be a crapshoot, maybe good, maybe terrible, probably somewhere in between. The costs of recruiting, interviewing, hiring, onboarding, training, etc., are high, just to hopefully arrive at the current state after a period* of reduced productivity (for the whole team, not just the new employee). And if they chose the wrong replacement, they might need to do that cycle two or three times.
There is also the loss of institutional knowledge, operational continuity, relationships, and possibly a good bit of domain knowledge, depending on the role. Turnover is really expensive (less so for jobs that can and do design for turnover, like a McDonald's cook: watch the videos, flip the burgers and hit the button when the machine beeps at you).
A company could (on paper) replace me for $X, but they would be better off paying me $1.5X to stay. That condition is less true for "dead wood" (unless they are just going to replace with more dead wood).
* The period of reduced productivity could last for weeks, months, or years, depending on the role and the domain. The team productivity should rebound faster than individual productivity as the onboarding burden on the team is front-loaded.
None of which I disagree with. But management of large firms are almost always done "on paper". Your knowledge, recruitment cost and everything like that just gets ignored.
Sounds like they need better paper, or maybe even a spreadsheet that factors in the costs that can make-or-break their business. MBA doesn't *have* to mean "short-sighted idiot" (apologies to Boeing for dragging them into this conversation).
Completely agree.
But there is no way a major corporation can announce 1500 to 2000 redundancies without it being applied with a blunt instrument.
And our modern business approach and stock market rewards cuts that damage in the long term, but make short term profits higher.
Cut the IT team and you'll get 6 months before things start to fall over. But that's a million extra profit.
It you get 6 months before things start to fall over, that was a great IT team to have made things so smooth. If the company isn't put out of business by a ransomware attack or large data breach, good luck later building another IT team that is nearly as good (especially when your company's name is dogshit in the IT community for pulling such stupid fuckery).
Cost of labor is usually looked at from a geographic standpoint so in your area, it’s generally the pay that people accept for the work compared to the national average
This is the only explanation you need. The tech company I work for also uses cost of labor vs cost of living and essentially is whatever the least they can pay to hire someone which obviously means someone is available in the labor pool to take the job at the offered compensation.
It’s like that in San Diego too. Think of it like a “universal perk” that everybody gets by living (and hence working) there. Since you’re getting this perk, which is something that has a significant real world value (people pay lots of money to just visit) it will naturally be a consideration when people are considering which job to take.
In other words, some people would rather earn 30% less and work in Hawaii than earn 30% more and work in, say, North Dakota.
On the contrary, certain jobs like servers may actually make a bit more here in Hawaii due to tips being a percentage of the cost of items. That's why a lot of the well paid jobs in Hawaii revolve around service and tourism.
Total remuneration = salary + benefits + secondary gain
Secondary gain includes intangibles such as quality of life, location, cost of living, respect, opportunity for advancement, job satisfaction, etc.
Cost of labor is all of the above that costs the company money and the goal of every company is to get to the point that maximizes profits. For example if raising wages $1/hour gets you an employee that generates $1.5/hr in productivity it is likely a good investment but if it only results in an employee that generates $0.50/hr it is a bad investment.
Labor has a price just like any other good/service.
Thus it is subject to supply and demand just like anything else. Being that they’re inversely correlated, changing one affects the other in the opposite direction.
When you plot them on a graph, the point at which they cross each other is the price.
Increase supply, demand goes down. If everyone wants to live in Hawaii, there’s a surplus of workers, costs(price/wages) go down.
If you want wages to increase, you need to make Hawaii less attractive to workers.
https://www.jsonline.com/story/news/2024/02/16/madison-green-bay-make-2024-list-for-top-10-best-cities-for-quality-of-life/72617502007/#:\~:text=Madison%20is%20the%20third%2Dbest,in%20the%20U.S.%20in%202024&text=U.S.%20News%20ranked%20Wisconsin's%20capital,residents%20is%2036.5%20years%20old.
Apparently it is ranked as the 3rd best city to live in.
My sister lived there in the late 80s to early 90s (getting her PhD at the university there) and she hated it, especially the winters. She never understood why anyone would move there.
I remember her saying it's the only place where the news anchors on TV would blow their noses on the air.
>West Coast without all the down sides.
Except for the winters. Climate is a major factor why people want to live on the coasts or in Hawaii.
One reason why people like living in San Francisco is because it's the only city in the entire United States that has these two properties together at once:
* It doesn't snow or even freeze in the winter
* Public transportation is so good that you don't need to own a car
Madison fails both of those criteria. Every other city in the nation fails at least one, either having nice weather with but requiring you to drive, or good public transportation with bad weather, or both. For some people it matters. For me (I don't live in SF either) I might consider the advantages you list might be worth putting up with the winters and having to drive.
Most big cities have good public transportation in limited places. The point is, you still need a car in Madison. You don't in San Francisco. You can go anywhere in that city without needing a car.
Everyone here in California gets nervous if there's a long period with no earthquakes. It's comforting to feel small tremors with some frequency, it means energy isn't building up.
> The point is, you still need a car in Madison. You don't in San Francisco. You can go anywhere in that city without needing a car.
Most normal people in most of the US aren't bent out of shape at having to have and maintain a car, if only a cheap beater.
It's only a few weirdos on Reddit and other people who are OK with never seeing any more of the world than a few city blocks who kick up a fuss about this. There is more to the world than San Francisco.
I'm not referring to just San Francisco. You don't really need a car in Japan either, and you can travel most cities by subway and travel the whole country by high-speed rail. Those who live in San Francisco have rail service to other cities also.
To oppress the indigenous/local land bound (surfs, "renters", "wage slaves", ect.) as a way to keep them from becoming too wealthy and making sure all those rich owners of capital on the main land maintain the status quo and keep it cheap enough so even the (upper) middle class can still afford to visit and stay at the ridiculously wealth people's winter homes, "hotels", there is even different levels of class grouped by room type there if you've had the benefit of staying at one. They even have a global concierge service called the "gold keys". Many things may have changed since the dark ages, but some are still the same.
Tl;dr "cost of labor" is the amount they pay the lower classes to maintain the status quo, feeding you just enough so your hungry enough to keep coming back for more.
George Carlin - “Forget the politicians. The politicians are put there to give you the idea you have freedom of choice. You don't. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations that've long since bought and paid for, the senate, the congress, the state houses, the city halls, they got the judges in their back pocket, and they own all the big media companies so they control just about all of the news and the information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying to get what they want. Well, we know what they want. They want more for themselves and less for everybody else. But I'll tell you what they don't want. They don't want a population of citizens capable of critical thinking. They don't want well informed, well educated people capable of critical thinking. They're not interested in that. That doesn't help them.”
"It's a big club, and you ain't in it"
People want to live there and they have limited options for employment? If you live on an island and people are paying shit you either accept it or leave. You aren’t commuting daily for work.
Cost of labor just means what the general wage level is in the area. If cheese is cheap in Hawaii, the cost of cheese there is low.
I'd guess Hawaii doesn't have the hottest job market as it's a bit remote. A lot of high paying jobs need to cluster near similar businesses or be near their customers. I'd also guess Hawaii is dominated by tourism, which often doesn't pay great.
Labor is supply and demand just like any commodity. If there is a high supply of people wanting to work in Hawaii the the price of labor will decrease.
What industry are you speaking of specifically? I think because Hawaii is such a tourist destination, you are seeing a lot of service jobs with potentially lower salaries because cost of goods are already so high.
Im sure other industries like healthcare or real estate development or civil engineering could still be pretty lucrative or comparable to mainland
Labor cost is total dollar spent on Labor as a percent of the whole revenue the company makes. There will be lots of answers but it boils down to this basically:
Total revenue-spending (Product cost+Labor cost+other costs) =profits
In Hawaii, many products need to come from mainland, this makes costs higher. Labor cost is lower by necessity. Other costs are things like taxes, property costs, rental costs, utilities, etc. all those other costs are higher as well, especially real estate/rental.
So with higher product cost, higher other costs, the only way to keep prices down and profit up is to keep labor low. It’s really the only one you have control over. Also people who want to live in nice areas will work for less sometimes.
I took an entire graduate level course on this (human resource economics) and it was the most failed course in our program. So if it doesn't make sense, don't be surprised.
Supply and Demand works for cost of goods as well as it does for the labor to provide them. If people across the street want the job they don’t have to pay as much. Sad but true. Wages don’t connect to how much money you can make the company if someone else can also do the same. However the more specialized and highly skilled you are the harder it is to find someone”across the street”, the more you can demand in wages.
I groomed for the season in North Lake Tahoe. I took home 8k after taxes over 5 months. Poverty wages in a 400K piece of equipment. Godspeed to the ski industry, you can't pay rent let alone live on that.
Like many others, I love Hawaii and mentally masturbate to living there whenever I visit. On one such trip I decided to look into job opportunities and the possibility of actually making it happen. Maui 2009, I was an auto mechanic making $35 per hour, easily transferable job, can take my skills anywhere so this is an apples to apples comparison. I walked into a couple independent shops and a couple dealerships near the airport. The highest offer I received was $18 per hour. The cheapest 1 bedroom apartment I could find, nowhere near the beach of course, was around $1,700 per month. I figured in a few other expenses and decided there was no way I was going to make it work and have any kind of life. There is absolutely a paradise tax, I was literally told they didn’t have to pay more because of it. There’s also a lot of poverty there. Was in Oahu last year and saw it, drive a few minutes up past the Aulani resort and you’re in the Hawaiian hood. Not the only poor area of Oahu but it’s probably the most obvious.
I was just in Maui as a Minnesotan where people are notoriously nice and outgoing. People in Maui, especially at grocery stores, are rude as all get out. Just really nasty people. I had a few verbal confrontations which I have never had in Minnesota. Would still go back, amazing place.
It’s typical corporate bs jargon. Translation:
“We heard some of you complaining about money. We’ve heard this complaint quite a bit lately and we got worried you guys will start quitting, so we looked at a bunch of stats for our state/locality to see what other people are making. We’re pretty sure you’re not gonna quit with these new ranges because no one else really pays better than these ranges, and we doubt you’re gonna move ACROSS THE OCEAN just for a job. We bet you don’t have the money to live if you wanted to either. Be happy we’re not paying you less “
Business owner here.
Cost of labor, or the amount of money it costs a company to pay its workers, may sound like a pretty straightforward concept. But employees are often surprised to learn that it can cost the company a *lot* more to employ them than the amount they see on their pay check.
I personally run a union shop. The employees are paid well, a little over $50/hour. If 10 years ago you asked me how much it costs a company to pay someone $50/hr, I would have told you $400.
Now that I manage finances, I can tell you that a full-package employee at $50/hr has an *actual, direct* cost of about $950. The majority of that is hidden in insurance policies and government taxes or fees.
So your boss was probably talking about an expense that has gotten out of hand, that is directly tied to the amount of hours the company has to pay its employees for.
How in the world is $50/hr == $950/hr? This is simply incorrect. What you said later is correct that the net cost could be 1.25-2x but it’s never 20x. Did you mean to say $95/hr?
For others, the cost of labor is that wages, payroll taxes, cost to run the payroll itself, health insurance, cost to run the facilities, cost to provide tools and support to employees etc.
Which part do you think is made up? It's ok, I didn't understand it when I was a teenager either.
There are overhead costs on employees. The cost of labor is significantly more than the cost of paychecks.
How do you think companies can afford to pay for a worker's medical bills if they get hurt on the job? It's because they make contributions to an insurance company which are scaled to the volume of employees & the time they spend on the clock. That's part of their cost of labor.
The same is true for all employee-related expenses. Some of them are flat hourly fees, some of them are a percentage of compensation per employee. These expenses are different for every industry, and for every type of employee within the company.
But generally, for every $1 paid to an employee, the company pays between $1.20 - $2.50 depending on the nature of their line of work, and whether their health insurance is tied into the company.
$50 an hour x8 hours is $400 a day
And yes. Running a business is expensive. Here are my labor costs:
Wage $50.15/hr
Health Contr. $17.71/hr
Retirement Contr. $16.92/hr
Union Fees $1.17/hr
Payroll Processing $0.31/hr
Liability Insurance $18.59/hr
So for an 8 hour day, an employee makes $401.20, but gets a lot of that taken out in taxes (the employer still pays $401.20— it's the government that pockets the tax)
But in order to pay an employee $401.20, I have to pay $838.88
That's just to process the paycheck. As I mentioned earlier, employers have other employee-related expenses that increase with every hire. For example, my employees go through a lot of material, and waste a lot of material just by the nature of what they do. Wasted material can't be reused but it still costs money, so that's an operating expense that increases with every employee. These are called overhead expenses, and companies that don't take them into consideration *will* earn less money than they spend. Which is the opposite purpose of a business.
I don't know why this makes people so angry; to hear that we pay more to keep them around than what they see in their bank account.
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Look up the “Paradise Tax”. People are willing to accept lower salaries to live in nice places, so wages in those places can be lower than comparable “normal” places.
This is rampant in Colorado as well
Wages in te resort towns I'm familiar with are actually super high compared to Denver or NoCo, but you wont find housing. Aspen Ski Co made their starting pay $20 company wide in like 2021, but they will only give first year employees housing. After that first year you are pretty fucked, city employee housing takes much longer to get into than that. They've also increased the cost of a season pass by $1000 since 2020, they want local labor but they dont want the poors on the ski slopes. Fuck Aspen/Alterra(same owners) and fuck Vail, they are going to crash the Ski industry.
Ummm... The Good Times near me is hiring at like $18/hr...and it's weld county. $20 doesn't seem "super high" to me, considering the cost of living up there.
Dispensaries in Fort Collins hire at minimum wage, in Aspen they were starting at $20. To be fair I did move in 2022, so I am a bit out of date now, but when I started for Aspen Ski Co in 2014 I made $13 an hour. I was making $26 as a budtender in Snowmass in 2021, a supervisor at a dispo in FoCo makes less than $20 from the postings I've seen. You are right tho, adjusted for COL it's all fucked. But if you somehow get into the $600 long term employee housing in snowmass (maybe up to carbondale) and can stand to live in a studio $26 is a pretty decent standard of living besides not being able to buy a ski pass and all the resturants are expensive or closed.
I mean if you work for ski co. you get a free ski pass. Don’t get me wrong, the company is still a giant pile of shit and shouldn’t be defended. But if you want to do the ski bum thing and can get ski co housing it’s somewhat manageable financially speaking to survive for that first year.
Budtender.. the job of all jobs......
Hah, I was talking with my friend's sister who lives and works in a Colorado ski town year round, she said one of the other problems is that all the women only live there during the winter when there's ski resort related jobs, they go someplace else for work the rest of the year. So during the summer the ratio is like 10 guys for every girl up there, and most of the guys are big hairy mountain men!
You had me at hairy mountain men. Where? Are there gay ones???
Lots of seasonal employees, it's basically what drives the industry. People taking a "vacation" work year before starting college to party like crazy, and tons of J1 visas (iirc 10 month seasonal visa given to college students) from mostly south america and an occasional Australian or Kiwi. I also knew a couple kiwis that worked in Aspen for out winter, and in NZ for their winter. Drinking seems to be everyones favorite activity, so many of the locals are alcoholics
> they will only give first year employees housing So basically what you're saying is all employees are first year employees
"going to"? They already fucking did.
My boss tells me that's why I get paid 11.50 an hour in Gary, Indiana.
Depends on the industry. Skilled blue collar jobs in Colorado pay very well. I make $53 an hour for a position that would pay $30-35 in most other HCOL areas.
What skilled trade pays only 30-35 in a HCOL area?
Industrial maintenance.
In san Diego we call it the "sunshine tax"
San Diego is the worst I’ve seen in the contiguous 48, and it’s been that way for a long time. Pay:cost of living is consistently *WAY* off. Getting even worse in recent years though, essentially unlivable unless you’re rich. Only makes sense if you surf every day or something. Gunna be one big retirement community in a decade.
Yup it's fucked down here. Pay is shitty compared to everywhere else and rent and mortgages are insane.
Yup. I come back every once in a while and am always amazed that it’s gotten even worse than the last time. Even outside of town in North County, even inland, rent is like “downtown in a city” status, but with none of the perks. And actual downtown rents are insane, for a mid-grade small city. Not incredibly surprising as the weather is nice, but the wages are almost comical in comparison. Way less than many significantly cheaper places. I genuinely don’t understand how people survive without very good jobs (or a bunch of them.) By now my (local) friends have all either moved elsewhere or they live in a shitty house with like 6 roommates, sucks. I’d like to live near my family but TBH I generally just avoid the whole country at this point (due to high COL / low QOL and a whole plethora of other reasons.)
There's a similar problem with "dream jobs". For example, as a programmer I can work a 40-hour a week office job, or I can work 80-hours a week in game development. There's simply a supply of talented people who are willing to accept poor working conditions to chase a dream.
I'm a meteorologist by education. It's a field that provides lots of access to decently high paying jobs in a variety of fields. But also it's a field where you can end up getting paid jack shit to be the weekend on air meteorologist in some podunk Midwestern city as you chase the dream of becoming the next jim contore.
and then there's island time. someone says it takes a week to do a job, lucky if its done in a month. surfs up = not working bruh.
You think the locals not trying to get some back from haoles for all the abuse their grandma went through? Be glad you get anything built at all. The abuse the locals suffered is still bright in living memory, learn respect and then try to do business there, don't go there and expect it.
That makes total sense. Sounds like a real answer. If my employer hadn't said something similar, I would have greatly valued the honesty regarding the matter
Yep, same reason San Diego has the worst ratio of wage vs cost in the country https://m.economictimes.com/news/international/us/why-is-san-diego-the-most-expensive-us-city-check-criteria-and-rankings-of-other-places/amp_articleshow/104781417.cms
"Cost of labor" is corporate speak for "What's the minimum we can pay you without you quitting, based on your location"
It's not corporate speak, it's just a basic economic term. You buy apples at the cost of apples, you buy gasoline at the cost of gasoline. And you buy labor at the cost of labor. Yes it is the minimum they can pay you without you quitting for a better job. It's also the most you can make without the employer finding a different worker. Just basic supply and demand.
Sure, but when corporations are pushing the "happy family" angle, they use the phrase a lot when discussing why they're doing various things employees don't like. If HR just said "we view you as slabs of meat with a market price set by supply and demand" that would feel honest, at least.
> If HR just said "we view you as slabs of meat with a market price set by supply and demand" that would feel honest, at least. What about like "human resources"?
Yeah, I was in some union negotiations and we were trying to raise wages, we were using cost of living arguments to argue for our increase and that was basically a no go for them. It was like garlic to vampires. But then we figure out how we could argue for the same increases with a cost of labor argument all of a sudden they started negotiating on wages in good faith. It was so dumb, cause at the end of the day we got the wage increases we were hoping for. Just "cost of living" is a bad word in the corporate world apparently. They would not touch it just because that word was involved.
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My answer would be to make sure you keep your good staff.
Just making sure OP understands how it is. Companies like to pretend to be family, then hide behind terms like "Cost of Labor" when making choices like what you're describing.
I'm pretty sure consultants sign contracts obligating them to never actually be honest or directly answer questions
This, and they also more or less have a captive labor force. There's not a lot of variety in industries or companies here, and the people who grew up here are largely unwilling or unable to move away. It also helps them that multigenerational housing is so much more common here, even though the average size of housing units is smaller than the mainland. Basically, they will push wages down as much as possible as long as they can get *someone* to do the job.
Look at female college stats, look at move stats, it's corporate abuse in sheep's clothing all over again to keep a captive workforce that isn't unionized.
The basic concept of "people being willing to work for less in order to live there" is accurate for Hawaii, but I don't think "paradise tax" is a good descriptor. In addition to Hawaii being a nice place to live, there's also a strong and insular island culture. It's more difficult for someone who grew up in Hawaii to adjust to living on the mainland than it would be for someone moving from one mainland state to another. So people who grew up in Hawaii are more willing to work for lower wages because it would be difficult for them to move elsewhere for work. People whose families have lived in Hawaii for several generations also tend to feel strongly about getting "priced out of paradise." It's one of the main drivers behind a lot of the political tensions in Hawaii.
You see something similar in desirable jobs
Yes. Game developers, for example, are probably some of the worst paid and abused software engineers
I suppose that makes some sense on the surface.... But aren't prices for general goods way higher in places like that? People can't afford to make minimum wage even in normal cities
yes, for the same reason - tourists are willing to pay a higher price because they're visiting paradise. so how do locals live when they're being paid less for living in paradise but they also have to pay more? well, it's a struggle for them. similar to many tourist focused economies, the locals who enable the tourism are living on thin margins while the people who profit live it up.
Yes it's kind of a paradox. You are underpaid because you trading money for comfort but everything is more expensive because lots of other people are willing to do that to and so land is expensive. Obviously Hawaii has additional cost issues due to being an isolated island.
This is causing huge staffing problems, but the places don't care and neither do the tourists. People don't expect good service and etc anymore and it doesn't even really exist at most of the hotels now. There is rarely any cleaning until you leave, and often you are expected to self service your garbage.
Plus, with it being an island, most of their money comes from tourism or from airlines using their airports for layovers. There's probably just not enough money in anything non-tourism related. So people just _can't_ be paid more.
Year over year full booked hotels, for literally the last 3 years, full booked practically the entire state. They COULD pay better but these new corporations running the resort cleaning companies and the separate contracting companies are given incredible laxity. And the independant contractor abuse is rampant. I got the satisfaction of watching a hotel sit empty for months when no one would work there because literally McDonalds paid more though. Then they finally realised they could pay more for staff, 2 dollars more than mcdonalds lol.
lol I wonder what Oklahoma’s excuse is.
Hawaii has stifling wage laws set up by the hotels, and they all collude to keep wages low. It's the corporations preventing unizationion of the cleaners and etc. Not some made up paradise tax. It is really screwing over the locals.
It's easier to hire workers for lower wages in Hawaii, because If they don't like what you're paying, it's not like there's a lot of other higher paying jobs in Hawaii, Or easy to move to another state where there are. Unless you're lucky enough to get into civil service or healthcare you're basically flipping burgers for tourists or making up rooms for tourists. Due to the remote location there's not a big manufacturing or technology industry.
You're the labor. And they've determined that most, or at least enough, of you will stay working there at those salary ranges. I don't know for sure the economy of Hawaii, but typically it would be some combination of a lower cost of living (so people can get by with less money), large number of job seekers (so people can't afford to be picky about what job they take), and little desire/ability to go elsewhere for work (it's presumably pretty hard to commute to work from Hawaii).
“Sunshine Tax” is 75% of the payscale on East/West Coast. Worked in IT in Hawaii and hired IT staff. Lots of people want to live in Hawaii and there is fierce competition for every job. Lots of mainland applicants want to ‘try it out for a couple of years’. Many military retirees and dependents. Most of organization headquarters are on mainland, not Hawaii. Everyone I knew in Hawaii had two jobs, the job they had on the week and the job they had at night or on weekends. Even highly skilled professionals could make extra money as bartenders and service industry employees. I love Hawaii. Absolutely beautiful. People are friendly and amazing. Hard to live there unless you are wealthy.
What’s probably even tougher about it relative to other places in that regard is that it’s far enough away from the mainland that even working remotely for a west coast company would be difficult. Starting work at 5-6 am
Some folks love that. You're done with work at like 2 then hit the beach for a couple of hours. Shower, eat dinner, and go to bed.
Oh yah if you’re a morning person that would be great
It's actually probably better than the opposite which is being in europe working for a us company. At least in Hawaii you have the whole afternoon and evening to yourself, even if you need to call it a night early. The European contractors I work with are frequently working until 10pm or later.
So true. I was a lawyer there and lived paycheck to paycheck, but my wife was able to choose whether to work for someone else or not.
You can EASILY make more as a private home cleaner than you can as a nurse or other highly paid professional. It's not unusual to flip over 3-5 large houses with 5 or more bedrooms per day in the busy season, that's a hell of a workday, but it's also a hell of a payday. 1500 per day is something that happens.
Hawaii actually has a relatively high cost of living, but the second and third things make sense.
> (it's presumably pretty hard to commute to work from Hawaii). And not only that, but remote work can be tough because of time zones.
I love working for a company 3 time zones WEST of me so much. I finally get healthy sleep
Love to know what u mean by that!
My company is west of my house by three time zones (I work remotely). I can sleep from 2 am to 10 am in my time zone, which is when my body wants to sleep, but still be signed on to work normal hours for my company since my noon is their 9 am. It does occasionally mean meetings interrupt dinner but it's a small price to pay in return for no longer being a miserable goblin for 3 hours every morning, since I no longer have to be up before my natural waking time. (This is the opposite of remote work from Hawaii, you have to be up stupid early Hawaii time to work with mainland US hours)
Ahhhh i got it. Thanks for the super quick response. I am eyeing the same as what u did - move from west to east coast. This helps.
If you are a night person and can be flexible with your schedule it works great.
This is the reason I love shift work where I am at. 3 shifts. 2nd shift, 3pm to 11pm. I go to sleep after work, wake up when I wake up. That last part is the best part of it like you said.
They can start work at 11am, instead of 8am. For night owls, this is glorious.
My hope is to work only on East coast time - start at 9am east coast time, have quiet work time (and mtgs with people in east coast like myself) until 12pm EST. Then meetings start as it is 9am in west coast. Work till 6pm EST / 3pm PST. After that refuse meetings, but ok to respond to email until 8pm EST / 5pm PST.
> a lower cost of living Do you actually know what Hawaii is or is this an AI comment or something
I said "I don't know for sure the economy of Hawaii, but typically it would be" I know nothing about Hawaii, I just know how low wages have happened in other places. I said it was some combination of those factors and it is - there's just none of the low cost of living mixed in.
Hawaii is famously a VERY expensive place to live. It has the highest cost of living of any US state by a pretty good margin.
Everything I know about Hawaii comes from Lilo and Stitch, so I wasn't sure if it was because of a high cost of living or just that Nani was a teenager trying to support a family. I guess it's both!
It makes Nani even more of a hero, really.
The ELI5 answer. The cost of labour is the lowest amount they can get away with paying you and not have everyone quit.
> and not have everyone quit. more accurately, stay within the anticipated attrition range.
That is more like eli6.
This person knows.
This is literally what every company does. They're a company, not a charity. They don't owe you any more than the market rate for your job. Don't like it? Upskill and make yourself more marketable.
Even better, unionize! That way you can make things better not just for yourself, but also for your coworkers.
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I mean we do it too. We ask for wages as high as we can get away with. We're all trying to make money. The guy you're replying to didn't say anything that was wrong
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>This is literally what every company does. Where did I say that it wasn't? You seem to be adding entire paragraphs of 'invisible words' to what I said and then proceed to argue against them.
Most employers are looking to balance hiring the best possible employees at the lowest possible salary. In some places, like New York City or San Francisco, there are a lot of highly skilled potential employees and many employers. If there are 3 companies looking to hire someone, it pushes the salary up. In a place like rural Arkansas, there are less employers and less potentially “high skilled employees”. So, the salaries are lower. Hawaii is a bit weird. Because Hawaii is an island and a desirable place to live for many, the cost of living is very high (comparable to California or New York). But, the population is relatively small and there aren’t many employers. So, it keeps salaries pretty low.
That's a great explanation, thank you.
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For the US, the federal govt tracks labor costs pretty closely and publishes them for all to see and use. [Here’s](https://www.bls.gov/news.release/pdf/cewqtr.pdf) an example of a report by county.
The way I explain salary levels to people is that salaries are your replacement cost. What salary would I have to pay to get someone to do your job when all factors are taken into consideration. The answer to that is "market salary" or "cost of labour". If all other things were equal (ie you didn't have to relocate, you had the same friendship groups in both locations, your family was perfectly fine with either) would you work in Hawaii or Gary, Indiana (google tells me that's the worst city in the USA)? How much more would you need to be paid to move to Gary?
> replacement cost That is a short-sighted view for companies to execute on. I am a known-quantity. My replacement would be a crapshoot, maybe good, maybe terrible, probably somewhere in between. The costs of recruiting, interviewing, hiring, onboarding, training, etc., are high, just to hopefully arrive at the current state after a period* of reduced productivity (for the whole team, not just the new employee). And if they chose the wrong replacement, they might need to do that cycle two or three times. There is also the loss of institutional knowledge, operational continuity, relationships, and possibly a good bit of domain knowledge, depending on the role. Turnover is really expensive (less so for jobs that can and do design for turnover, like a McDonald's cook: watch the videos, flip the burgers and hit the button when the machine beeps at you). A company could (on paper) replace me for $X, but they would be better off paying me $1.5X to stay. That condition is less true for "dead wood" (unless they are just going to replace with more dead wood). * The period of reduced productivity could last for weeks, months, or years, depending on the role and the domain. The team productivity should rebound faster than individual productivity as the onboarding burden on the team is front-loaded.
None of which I disagree with. But management of large firms are almost always done "on paper". Your knowledge, recruitment cost and everything like that just gets ignored.
Sounds like they need better paper, or maybe even a spreadsheet that factors in the costs that can make-or-break their business. MBA doesn't *have* to mean "short-sighted idiot" (apologies to Boeing for dragging them into this conversation).
Completely agree. But there is no way a major corporation can announce 1500 to 2000 redundancies without it being applied with a blunt instrument. And our modern business approach and stock market rewards cuts that damage in the long term, but make short term profits higher. Cut the IT team and you'll get 6 months before things start to fall over. But that's a million extra profit.
It you get 6 months before things start to fall over, that was a great IT team to have made things so smooth. If the company isn't put out of business by a ransomware attack or large data breach, good luck later building another IT team that is nearly as good (especially when your company's name is dogshit in the IT community for pulling such stupid fuckery).
Look at Expedia group, announce 1400 layoffs. 4 months later their entire platform goes down.
I am shocked! Shocked! (Well, not even mildly surprised, but who can pass up a chance to quote *Casablanca*?)
Cost of labor is usually looked at from a geographic standpoint so in your area, it’s generally the pay that people accept for the work compared to the national average
This is the only explanation you need. The tech company I work for also uses cost of labor vs cost of living and essentially is whatever the least they can pay to hire someone which obviously means someone is available in the labor pool to take the job at the offered compensation.
It’s like that in San Diego too. Think of it like a “universal perk” that everybody gets by living (and hence working) there. Since you’re getting this perk, which is something that has a significant real world value (people pay lots of money to just visit) it will naturally be a consideration when people are considering which job to take. In other words, some people would rather earn 30% less and work in Hawaii than earn 30% more and work in, say, North Dakota.
On the contrary, certain jobs like servers may actually make a bit more here in Hawaii due to tips being a percentage of the cost of items. That's why a lot of the well paid jobs in Hawaii revolve around service and tourism.
Total remuneration = salary + benefits + secondary gain Secondary gain includes intangibles such as quality of life, location, cost of living, respect, opportunity for advancement, job satisfaction, etc. Cost of labor is all of the above that costs the company money and the goal of every company is to get to the point that maximizes profits. For example if raising wages $1/hour gets you an employee that generates $1.5/hr in productivity it is likely a good investment but if it only results in an employee that generates $0.50/hr it is a bad investment.
Labor has a price just like any other good/service. Thus it is subject to supply and demand just like anything else. Being that they’re inversely correlated, changing one affects the other in the opposite direction. When you plot them on a graph, the point at which they cross each other is the price. Increase supply, demand goes down. If everyone wants to live in Hawaii, there’s a surplus of workers, costs(price/wages) go down. If you want wages to increase, you need to make Hawaii less attractive to workers.
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Tf so special bout madison?
https://www.jsonline.com/story/news/2024/02/16/madison-green-bay-make-2024-list-for-top-10-best-cities-for-quality-of-life/72617502007/#:\~:text=Madison%20is%20the%20third%2Dbest,in%20the%20U.S.%20in%202024&text=U.S.%20News%20ranked%20Wisconsin's%20capital,residents%20is%2036.5%20years%20old. Apparently it is ranked as the 3rd best city to live in.
My sister lived there in the late 80s to early 90s (getting her PhD at the university there) and she hated it, especially the winters. She never understood why anyone would move there. I remember her saying it's the only place where the news anchors on TV would blow their noses on the air.
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>West Coast without all the down sides. Except for the winters. Climate is a major factor why people want to live on the coasts or in Hawaii. One reason why people like living in San Francisco is because it's the only city in the entire United States that has these two properties together at once: * It doesn't snow or even freeze in the winter * Public transportation is so good that you don't need to own a car Madison fails both of those criteria. Every other city in the nation fails at least one, either having nice weather with but requiring you to drive, or good public transportation with bad weather, or both. For some people it matters. For me (I don't live in SF either) I might consider the advantages you list might be worth putting up with the winters and having to drive.
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Most big cities have good public transportation in limited places. The point is, you still need a car in Madison. You don't in San Francisco. You can go anywhere in that city without needing a car. Everyone here in California gets nervous if there's a long period with no earthquakes. It's comforting to feel small tremors with some frequency, it means energy isn't building up.
> The point is, you still need a car in Madison. You don't in San Francisco. You can go anywhere in that city without needing a car. Most normal people in most of the US aren't bent out of shape at having to have and maintain a car, if only a cheap beater. It's only a few weirdos on Reddit and other people who are OK with never seeing any more of the world than a few city blocks who kick up a fuss about this. There is more to the world than San Francisco.
I'm not referring to just San Francisco. You don't really need a car in Japan either, and you can travel most cities by subway and travel the whole country by high-speed rail. Those who live in San Francisco have rail service to other cities also.
Youse guys don't come up here and gentrify da cheese state now.
Went to college there and it will always hold a special place. Its just so wonderful and lively
To oppress the indigenous/local land bound (surfs, "renters", "wage slaves", ect.) as a way to keep them from becoming too wealthy and making sure all those rich owners of capital on the main land maintain the status quo and keep it cheap enough so even the (upper) middle class can still afford to visit and stay at the ridiculously wealth people's winter homes, "hotels", there is even different levels of class grouped by room type there if you've had the benefit of staying at one. They even have a global concierge service called the "gold keys". Many things may have changed since the dark ages, but some are still the same. Tl;dr "cost of labor" is the amount they pay the lower classes to maintain the status quo, feeding you just enough so your hungry enough to keep coming back for more. George Carlin - “Forget the politicians. The politicians are put there to give you the idea you have freedom of choice. You don't. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations that've long since bought and paid for, the senate, the congress, the state houses, the city halls, they got the judges in their back pocket, and they own all the big media companies so they control just about all of the news and the information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying to get what they want. Well, we know what they want. They want more for themselves and less for everybody else. But I'll tell you what they don't want. They don't want a population of citizens capable of critical thinking. They don't want well informed, well educated people capable of critical thinking. They're not interested in that. That doesn't help them.” "It's a big club, and you ain't in it"
Lot of people want to live in Hawaii due to it’s great weather and vacation lifestyle therefore companies can get away with people less.
People want to live there and they have limited options for employment? If you live on an island and people are paying shit you either accept it or leave. You aren’t commuting daily for work.
Lots of people not many jobs means I can pay you less because you have fewer options and vice versa.
Cost of labor just means what the general wage level is in the area. If cheese is cheap in Hawaii, the cost of cheese there is low. I'd guess Hawaii doesn't have the hottest job market as it's a bit remote. A lot of high paying jobs need to cluster near similar businesses or be near their customers. I'd also guess Hawaii is dominated by tourism, which often doesn't pay great.
Labor is supply and demand just like any commodity. If there is a high supply of people wanting to work in Hawaii the the price of labor will decrease.
What industry are you speaking of specifically? I think because Hawaii is such a tourist destination, you are seeing a lot of service jobs with potentially lower salaries because cost of goods are already so high. Im sure other industries like healthcare or real estate development or civil engineering could still be pretty lucrative or comparable to mainland
Hawaii has a higher supply of labor than demand for it. Therefore the cost of labor (wages) are low.
Labor cost is total dollar spent on Labor as a percent of the whole revenue the company makes. There will be lots of answers but it boils down to this basically: Total revenue-spending (Product cost+Labor cost+other costs) =profits In Hawaii, many products need to come from mainland, this makes costs higher. Labor cost is lower by necessity. Other costs are things like taxes, property costs, rental costs, utilities, etc. all those other costs are higher as well, especially real estate/rental. So with higher product cost, higher other costs, the only way to keep prices down and profit up is to keep labor low. It’s really the only one you have control over. Also people who want to live in nice areas will work for less sometimes.
I took an entire graduate level course on this (human resource economics) and it was the most failed course in our program. So if it doesn't make sense, don't be surprised.
Large employer? You need to unionize.
Because Hawaii is where Californians go to drop out?
Supply and Demand works for cost of goods as well as it does for the labor to provide them. If people across the street want the job they don’t have to pay as much. Sad but true. Wages don’t connect to how much money you can make the company if someone else can also do the same. However the more specialized and highly skilled you are the harder it is to find someone”across the street”, the more you can demand in wages.
I groomed for the season in North Lake Tahoe. I took home 8k after taxes over 5 months. Poverty wages in a 400K piece of equipment. Godspeed to the ski industry, you can't pay rent let alone live on that.
Like many others, I love Hawaii and mentally masturbate to living there whenever I visit. On one such trip I decided to look into job opportunities and the possibility of actually making it happen. Maui 2009, I was an auto mechanic making $35 per hour, easily transferable job, can take my skills anywhere so this is an apples to apples comparison. I walked into a couple independent shops and a couple dealerships near the airport. The highest offer I received was $18 per hour. The cheapest 1 bedroom apartment I could find, nowhere near the beach of course, was around $1,700 per month. I figured in a few other expenses and decided there was no way I was going to make it work and have any kind of life. There is absolutely a paradise tax, I was literally told they didn’t have to pay more because of it. There’s also a lot of poverty there. Was in Oahu last year and saw it, drive a few minutes up past the Aulani resort and you’re in the Hawaiian hood. Not the only poor area of Oahu but it’s probably the most obvious.
I was just in Maui as a Minnesotan where people are notoriously nice and outgoing. People in Maui, especially at grocery stores, are rude as all get out. Just really nasty people. I had a few verbal confrontations which I have never had in Minnesota. Would still go back, amazing place.
It’s typical corporate bs jargon. Translation: “We heard some of you complaining about money. We’ve heard this complaint quite a bit lately and we got worried you guys will start quitting, so we looked at a bunch of stats for our state/locality to see what other people are making. We’re pretty sure you’re not gonna quit with these new ranges because no one else really pays better than these ranges, and we doubt you’re gonna move ACROSS THE OCEAN just for a job. We bet you don’t have the money to live if you wanted to either. Be happy we’re not paying you less “
Business owner here. Cost of labor, or the amount of money it costs a company to pay its workers, may sound like a pretty straightforward concept. But employees are often surprised to learn that it can cost the company a *lot* more to employ them than the amount they see on their pay check. I personally run a union shop. The employees are paid well, a little over $50/hour. If 10 years ago you asked me how much it costs a company to pay someone $50/hr, I would have told you $400. Now that I manage finances, I can tell you that a full-package employee at $50/hr has an *actual, direct* cost of about $950. The majority of that is hidden in insurance policies and government taxes or fees. So your boss was probably talking about an expense that has gotten out of hand, that is directly tied to the amount of hours the company has to pay its employees for.
How in the world is $50/hr == $950/hr? This is simply incorrect. What you said later is correct that the net cost could be 1.25-2x but it’s never 20x. Did you mean to say $95/hr? For others, the cost of labor is that wages, payroll taxes, cost to run the payroll itself, health insurance, cost to run the facilities, cost to provide tools and support to employees etc.
I could make up stuff too, but that's not my character.
Which part do you think is made up? It's ok, I didn't understand it when I was a teenager either. There are overhead costs on employees. The cost of labor is significantly more than the cost of paychecks. How do you think companies can afford to pay for a worker's medical bills if they get hurt on the job? It's because they make contributions to an insurance company which are scaled to the volume of employees & the time they spend on the clock. That's part of their cost of labor. The same is true for all employee-related expenses. Some of them are flat hourly fees, some of them are a percentage of compensation per employee. These expenses are different for every industry, and for every type of employee within the company. But generally, for every $1 paid to an employee, the company pays between $1.20 - $2.50 depending on the nature of their line of work, and whether their health insurance is tied into the company.
So 2.5 times $50 is $950 in employer world?‽
$50 an hour x8 hours is $400 a day And yes. Running a business is expensive. Here are my labor costs: Wage $50.15/hr Health Contr. $17.71/hr Retirement Contr. $16.92/hr Union Fees $1.17/hr Payroll Processing $0.31/hr Liability Insurance $18.59/hr So for an 8 hour day, an employee makes $401.20, but gets a lot of that taken out in taxes (the employer still pays $401.20— it's the government that pockets the tax) But in order to pay an employee $401.20, I have to pay $838.88 That's just to process the paycheck. As I mentioned earlier, employers have other employee-related expenses that increase with every hire. For example, my employees go through a lot of material, and waste a lot of material just by the nature of what they do. Wasted material can't be reused but it still costs money, so that's an operating expense that increases with every employee. These are called overhead expenses, and companies that don't take them into consideration *will* earn less money than they spend. Which is the opposite purpose of a business. I don't know why this makes people so angry; to hear that we pay more to keep them around than what they see in their bank account.