Monday, February 21, 2005

Mean Ol' Employers

On the Today show this morning, Katy Couric was interviewing a woman who was taking to task employers who do not offer sick days to their employees. The result is that employees will either have to come to work sick, risking spreading their disease to other employees or customers, or stay home to recover, and lose wages. The implication was that this is tremendously unfair to the employees.

As a former employer who had both good employees and not-so-good employees, I can identify with the problems posed when workers don’t come to work. I believe that most employers do provide sick days and other benefits, and that small business are more likely than big businesses to not offer such benefits, for reasons of economy. The truth is that most employers – nearly all, I would venture – want the best workers they can find, and will do what is necessary to attract and retain good workers. Over time, good workers and good employers will find each other, leaving the not-so-good employers with not-so-good workers. That is how free market capitalism is supposed to work.

Couric and her guest gave us the broad view of the employees, but what was missing from what I saw was anything representing the employer’s point of view.

So, here goes. Each employee costs the employer the wages paid plus an additional FICA tax of 6.2% and a Medicare tax of 1.45%, and maybe some other add-ons to meet individual state requirements. For an $8 per hour employee (which is not a high wage) that totals $8.61 of cost per hour. In an eight-hour day, that employee costs the employer $68.89. For every benefit day (paid vacation, sick days, etc.) the employer shells out nearly $69 for that employee to not work, to not produce anything. Multiply that by the number of employees times the number of benefit days times the actual wages, and you can get some idea of the cost of these benefits. Add to those costs whatever contribution the employer makes for health insurance, life insurance, pension, or other such benefits to get a clearer picture of employment costs.

You have probably heard somewhere or other that people tend to take advantage of that which is provided to them for free. So it is with sick days. Don’t feel real sharp this morning? Have a couple of sick days built up? Maybe you just decide to stay home and collect your pay, but produce nothing for your employer, where if you didn’t have any sick days, you’d suck it up and go to work. The other side of that is, of course, that when you are really sick, it’s tough on you. So, what’s the answer to this dilemma?

The cost of employees has gone up dramatically over the years, both because of what employees expect and through government regulation. Some small companies simply cannot afford to provide the wages and benefits that today’s American workers expect. So, the resolution of this problem, to the extent that it is actually a problem, lies with employees. Workers should not take jobs that do not provide the benefits and pay they need, want or will settle for. If they really need the job, but it doesn’t offer the pay and benefits they expect, take the job and start immediately looking for a better situation.

The mainstream media will continue to report only one side of this issue, like Katie Couric did, making businesses of all sizes out to be mean, nasty, greedy people who force their workers to work in sweat-shop-like conditions, with few if any benefits, and probably low pay, too, just so the owners can get rich.

Anyone who has been in business for themselves knows what a crock that is. Unfortunately, most people in the U.S. only know what people like Couric tell them.

1 comment:

JL Pagano said...

I am 100% with you on sick days. My fiancee was recently out with a bunch of her friends during the week, and at one part of the evening, she made a passing remark that she was tired and wished she didn't have to work the following morning (something we have all felt I'm sure). Someone in the group suggested she call in sick, to which she replied in the negative, for she could not bring herself to do something like this.

Seemingly the man laughed and uttered these words "You're a fool." She told me this story the next day, saying how glad she was that I wasn't there, as I would have probably gotten, shall we say, a bit aggressive, in response.

When it comes to media portayal of business, however, I'm afraid it is a no brainer as to where sympathies will lie. When employers are motivated by maximizing profits and employees are motivated by providing themselves a decent living, a TV show which is beamed primarily at those preparing themselves to go out and earn that living is only going to go one way.

My suggestion? The Bloomberg Channel.