Taboo Question

Can I ask a question that seems to be taboo? What is the plan for getting us back to work?  Everyday I am bombarded with social media posts praising teachers and medical workers for their efforts. As it should be. What I do not see is praise for us small business owners and the common worker for our sacrifice.

But before I go on let me make it perfectly clear that I understand that behind EVERY death because of the coronavirus there is a person, A mother, father, child, uncle or aunt. That there are people morning a death. My wife and I pray everyday for all those effected. We do not take those numbers lightly.

I also know that behind all the unemployment numbers there is a mother, father, child, uncle or aunt that is scared and worried. These are also serious situations that we cannot over look. Yet if you dare mention it you are accused of not caring about life. But the truth is at some point they had to push the life boats away from the Titanic in order to save those in them. If they let everyone in, all the life boats would sink and nobody would survive. I cannot imagine being in a life boat and looking at the faces of those who stood on the ship watching life boats push off.

Americans are great people especially during times of tragedy. We rise up and give of our time and money. Time after time we help those in need. I think that this time is no different. Americans are mostly following the shelter in place rules and are paying a price. Small business's have closed and are doing their best to retain employees. Many business have shifted from normal operations in order to keep their doors open. Restaurants who never offered carry out and delivery now do so. Some are using FaceTime to allow customers to shop from home. Automotive shops are picking up cars and bringing them back then allowing you to pay on the phone. Yes, many business owners have become creative and changed the way they do business almost overnight. These are also the business owners who are trying to keep their employees on payroll. Often dipping into their personal funds or taking on debt just to help take care of their business "family".

We don't mind the sacrifice. But the truth is we don't know what we are being asked to sacrifice. Are we being asked to give up a few weeks or maybe even a couple of  months of sales in order to save lives? I think most are okay with that. Or are we being asked to give everything we ever worked for? Are we being asked to give up our business's? Our livelihood? Are we to give up our homes and belongings? What is the plan and how much are we to give? Are we even being given a choice?

Yes the virus is real. Yes the number of deaths are real. But so are the unemployment numbers. We need to understand behind those numbers there is more than a financial toll that will need to be counted. The emotional toll will create a laundry list of unintended consequences. We have already had the suicide rate increase 33% in the United States since 1999. The highest since World War Two. Here locally domestic assault calls are on the rise. We can't let the life boats go down. At some point we have to push them away.

So again I go back to my question. We really need to know... What is the plan for getting us back to work? We need to have some hope.
 

Death of the Service Industry / We Are Lazy

When I first started this blog post I was a worked up about the current talk of raising the minimum wage to $15hr. My business senses kicked in. I could not believe how many people seem to not understand basic economics. One of the dumbest arguments on the internet is if you cannot afford to pay someone $15 a hour your not running your business right. We will call this dumb argument #1.

Businesses have to compete. They must create a product or service that people actually want and sell it at a price people are willing to pay. A business can create a great product or service that people really want, but if they price it too high due to unrealistic labor costs then the consumer won’t buy it.

Somehow when we talk about tariffs we seem to understand this effect. News story after news story about how if you add a tariff to a item it will raise the price and make it harder for the consumer to afford but if you increase the labor somehow this won't have any effect on the price of the product or service? Where are these people getting this stuff? Of course that also leads to the second dumbest argument by the people pushing this increase. They always point to the Walmarts and the salary of the CEOs as proof that $15 a hour is possible.

Most people in the United States are employed by a small business. These small business' cannot afford these types of increases in labor. If you point this out they go to dumb argument #1.

Wages and benefits are paid based on the selling point of the product. A good part of this is determined by the skill level required of the employee. The higher the skill set required the more an employee is worth. It’s supply and demand, the same with any product. Increasing the minimum wage sets the selling point higher no matter the employees skill level.

The service industry will be hardest hit. Those business that are basically all labor and do not sell a product already have labor as their number one expense. Not only would service business see their largest expense increase they would also see an increase in matching FICA and Medicaid. Workers compensation is mostly based off of the amount of salary paid. Increase! Unemployment is based off of salary paid. Increase! And many service business insurance rates are based off of salary. Increase!

Let's face it there are a lot of services that would no longer exist if the price point became too high. People will clean their own home, stain their own deck, mow their own lawn.

But the argument that grinds me is that we believe we should be able to live comfortably and not have to work more than 40 hours in a week. How lazy are we? How self centered do you need to be to believe that you deserve a comfortable life for minimal work. Through out most of time people worked more than 40 hours to provide for their family. Many, like myself still do. Sixty hours a week can he normal for me. Sure I could work less but I would also make less money but I work my butt off to give my family a better life than the one I had. I NEVER thought it was the duty of my employer to make sure all my family's expenses were covered. That was my job and I would find a way to do it.

A high school student making $15 an hour on only working 20 hours a week is would be in the top 20% of wage earners in the world. When we fight for fifteen dollars a hour we are admitting we are lazy.

Take Edwardo. He worked in the main dinning room on our last cruise. He had been with the company for twenty one years. He left his family for seven months at a time working long hours just to give his family a better life. Seven months out at sea, two months home. He told us about how he had built a business back home and was employing people and now he would be able to retire from working on the cruise ship and stay home full time. This was a man who was willing to do whatever it took to provide for his family. He sacrificed so much and here we sit and claim... that you should be able to live comfortably and provide for a family on only 40 hours a week. 

Should everyone be able to make $15 a hour? Sure! I want everyone to make a lot of money and be rich. I want to be rich! But you need to learn a skill and work up the ladder. You don't get top dollar for entry level jobs. Nobody guaranteed me a basic level of income when I started my business. In fact worked below minimum wage for a very long time to build my business.  

If we ever raise the minimum wage that high, small business' like mine will most likely close. There goes six jobs times how many others that would do the same thing. Oh well, it really is my own fault, after all I just don't know how to run a business, or at least that's what they will say. 

College

Let me just take some time to brag about my son Brad. My son just graduated from college. He now has a degree in accounting. Now comes all those terrible school loans. Or does it? Not for our son. I can hear everyone now. Must be nice to have mom & dad pay for your education. Sorry. Wrong. He must have had scholarships. Buzz. Wrong again.

Brad paid for his own education. He worked hard starting at 16. Saved and paid cash. Never making more than $12 hr. Not even working full time. He even saved and purchased his own car during that time. The only help from mom & dad was guidance, room & board, and $1,000 for books, which if you have ever purchased books for college you know that did not go very far. Yes, it is possible to get a education and not be into crazy debt or demand that people pay higher taxes just so you can get a education. I understand that not everyone has mom and dad around to give you a place to live. My wife and I both had to support ourselves and pay for college and somehow we did it. Maybe the problem isn't with the system, although it could defiantly use some fixing but maybe it's more about us and what we demand from ourselves. College does not have to be free in order to get a education and our son is proof.

Our son already has a job in his field with good pay and benefits. He is debt free. He is on his way to living a wonderfully good life without the struggles his mom & dad had. We had those school loans so we know the struggle. We are very proud and happy and glad to know that he didn't listen to all the misinformation about how you cannot do it on your own. That the system is against you. The reality is that strong successful people find a way even if there are road blocks. Just like a football player pushing through the line. But today, everyone just wants the road blocks to be removed. Brad pushed through and now all his friends are facing large debt and he is enjoying all the extra money he is making on himself. Good job Brad!