“My Employer Makes More Off My Labor Than I Do”

by lewwaters

It seems that at just about any “progressive” protest rally, union unrest or occupy tantrums, it doesn’t take long before someone either in the crowd or on a speakers platform will state words to the effect of, “my employer make more off my labor than I do,” trying to build sympathy that they don’t receive proper wages for whatever their labor may be and whip up emotions to support demands of more.

In those crowds of envious and jealous malcontents, it is just what many desire to hear and speakers know it all too well. In the case of unions, demands follow for even more with no realization that any increases in business costs to employers must be passed along to consumers in order for their employer to remain in business and afford to pay them what they demand.

In a vicious circle, even those making the demand end up with less value for their dollar as consumer prices continue to climb.

Invariably, comparisons will be made that the laborer works hard, an undeniable fact and that while they may earn a decent wage, the employer is “raking in the dough” and enjoying large profits.

Some even claim that they end up investing in the “tools of the trade.” Mechanics, machinists, mill workers and more may end up owning over $30,000 worth of tools needed to perform their jobs and believe that to be a major investment, even though spread out over 30 or 40 years.

I can’t dispute that as I have a personal investment of some $35,000 in personal tools sitting in my own tool box, being a retired mechanic myself. But, they are mine to do with as I please and do not belong to any of my former employers.

Yes, the dealers I worked for over my adult life did indeed make more of an hour of my labor than I did. But is that really “unfair” as we so often hear today? Does that make the employer that “greedy rich guy” we so often hear of them accused of being?

So many crying out that they deserve whatever their employer has overlooks a lot. While we learn our skill and seen being hired at an existing business, most never consider what it took to establish and build that business over many years and often prior failures.

Many companies begin as an idea in someone head and years of working in garages or basements improving and perfecting that idea. Long hours late into the night, often after working a full day for another employer are put into the idea. Years of failing may result in an idea that finally works and offers others an improvement in their lives and demand builds.

Garages and basements are too small to meet the demand and a building is sought, often rented in the beginning and if the idea catches on, construction of a suitable location for manufacture is sought.

By now, the person that had the idea can longer meet the demand on their own and begins seeking to hire people with the skills needed to manufacture, sell and market the idea to consumers. Shipping and packaging enters into the equation so consumers may find the item on store shelves and receive it at their homes.

So workers are interviewed and those with the proper skills are hired, given a paycheck, benefit package or whatever the employer offers. He must also begin paying taxes and fees on his business for needed permits and licenses as well as purchase insurance on his business and employees.

If an employee isn’t as efficient in the job as thought, they will likely be let go after mistakes are made, mistakes that often the employer must pay for in recalls, lawsuits or buy backs. The employee that made the mistake only needs to seek other employment, drawing unemployment compensation during the time of unemployment, also paid for by employers in unemployment insurance.

While we workers may end up buying many tools of our trade over our working years, the employer may very likely have to invest hundreds of thousands, if not millions in equipment and tools for us to be able to practice our trade at their place of business. Be it lathes, drill presses, computers or what have you, the employer supplies those, we don’t.

They also must pay someone to maintain and repair that equipment as needed plus purchase the supplies needed to turn something into the item the dreamed of long ago and spent many years perfecting that we now build for them.

In a nutshell, it is the employer that comes up with the idea, works hard to perfect it, takes all of the risks, makes the investments and pays the necessary license, fees and taxes while many of us sit back and bitch because they expect a return on what they may invested their entire life in.

While our skill is important to us and the employer, what would we do with those skills if someone hadn’t done all of the dirty work to build a business first that we may practice our skills at?

So, who is it that is really the greedy ones? The one that came up with the idea, worked hard to perfect it, took all of the risks, made the investments and continues to pay the necessary license, fees, taxes and other expenses to keep a business running?

Or the one who comes along years later, sells themselves to the employer, asks for a paycheck and now expects an equal share without making any of the investments or taking any of the risks?

You decide.

I know there will be exceptions to this as not all business owners are decent employers, so don’t come try to tell me about your employer who screwed you over. Been there, done that, got the tee shirt.

But also don’t forget, you are free to quit and go sell your skills to someone else if your employer falls into that category.

You always have the freedom, so far, to seek a better paycheck.

What you are not entitled to is to continually demand more than the business can give. You receive a paycheck and benefits for your labors. That is what you are entitled to, provided your job performance meets the business owners’ expectations.

The next time you hear some malcontent saying, “my employer makes more off my labor than I do,” you might remind them that their employer has invested and risked far more than they are willing to and over a much longer period of time.

13 Comments to ““My Employer Makes More Off My Labor Than I Do””

  1. Having started, owned, and operated several businesses, I don’t understand why anyone would hire employees?! My goodness, the resentment starts the minute they start then increases gradually until it’s a full-blown envyfest, and there’s no comming back. Now as an attorney I advise all my clients to only use Temp agencies, or better yet, contract an LLC composed of the people they want. When the backstabbing begins, as it surely will, let the contracts expire and restaff. (I also recommend and do “asset insulation” to protect businesses & individuals from unscrupulous liability exploiters.)

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  2. Lew you’ve either owned a business yourself, or have an unusually well-developed observer’s insight into what’s actually involved. Outstanding article!

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  3. A little bit of common sense goes a long way, Tom. 😉

    Martin, you lay out an excellent argument against minimum wage, whether you realized it or not.

    NO one is satisfied any longer and always wants more, just as long as they don’t have to do anything for it 😉

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  4. I have hired and been hired. Either way there are arise reasons to be satisfied and dissatisfied. Employers often expect everything and want to give as little as possible in return. Employees often expect everything and want to give as little as possible in return. The problem IMO lies in the dichotomy itself, us versus them, me versus you. For any relationship to work, whether it be business or personal, there must be some balancing of interests that each party is seeking to fulfill. If that balance is not maintained, the relationship breaks down.

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  5. Lew, I don’t see the connection between resentment, a natural response of not having control of your life, and Minimum Wage? I view Minimum Wage as a society issue – it’s a tradeoff between jobs and personal independence – and only democratic means can decide what the line is.

    If you are hiring from a Temp agency for “unskilled” labor, you know EXACTLY what you’re paying. If minimum wage makes that number too high then you will chose not to hire anyone. If the thing you want them to do isn’t worth it then you’re not charging enough. Of course, “Free” Trade destroys normal business tradeoffs.

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  6. Balance is the key to this and many things, John.

    But, I don’t see employers protesting that employees don’t do enough for their pay. They let them go if that arises.

    And yes, there are exceptions, as I noted.

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  7. Martin, the connection is that minimum wage is never enough either, there is always a demand for more with arguments based often on “minimum wage isn’t enough to live on.”

    It isn’t supposed to be a wage to live and support a family on, it’s a beginning wage.

    But, the more it is raised, the more part-time jobs are made with fewer and fewer benefits and politicians bitching it needs raised even more.

    The end goal is the socialist dream, no profits, the government deciding who gets what which means no jobs as who would open a business?

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  8. Lew, that’s why Mimimum Wage is a social issue – not a business issue. It’s your job (and mine) to make sure 51% of the electorate are educated about the tradeoff.

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  9. Martin, perhaps because you’re an attorney, but you have stricter definitions than I do.

    While yes, minimum wage is a social issue, it spills over into business as well, raising the cost of business and overall, hurting workers with less jobs.

    I see little difference between unions striking to demand more, whether they are entitled or not, and politicians telling everybody business must pay them more.

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  10. Minimum wage has never worked unless of course your goal is to use it as a jack for raising inflation faster.

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  11. It does do one other thing…
    It provides incentive to illegals to come here for the guarantee that doesn’t exist elsewhere.

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  12. Lest we forget all the people your employer has on the payroll that are vitally necessary, yet do not contribute a dime of value towards the production of whatever the business is selling:

    The human resources people to deal with the myriad of employment regulations, complaints and disciplinary actions.
    The janitor and facility people who clean the place and insure it meets OSHA codes.
    The accounting and finance people who meet payroll, pay suppliers and invoice customers.
    The receptionist who answers and routes phone calls.
    The customer service people who deal with unhappy customers on a daily basis.
    The lawyers who protect the company from lawsuits.
    The shipping and receiving folks who feed and receive material and products from the producers.
    The quality assurance guys who make sure that everyone operates according to procedures.
    The regulatory affairs managers who make sure you meet the legal requirements for your product.
    The IT guy who keeps your work computers and network running.
    The marketing guys who sell the product to the customer base.

    All of these people are just as necessary to operating a large operation as the guy with the tools making the widgets, and without them there would be no widgets to be made, and not one of them directly contributes to the value of the widget. The guy with the tools has to make enough widgets to keep himself and all the rest of these people paid. If you think your labor is worth more than you’re making, you’re perfectly free to go find an employer who agrees with you and is willing to pay you that wage. The labor market is still the free-est market in the country. Chances are if your employer makes more off your labor than you do, it means you’re doing something common that a large number of people can do, and you’re easy to replace with someone who’s hungrier than you are. Instead of complaining that your product (your labor) isn’t selling well, you should look into improving your product (education) so that it’s worth more.

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  13. Sean and Lew, you make great points. I wish your two comments would have appeared in a certain local rag tag but alas, we know it will just have to stay in the local blogosphere.

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