Construction workers are stuck between a rock and a hard place. Why are construction workers wages so low? Simple…
TOO MUCH GOVERNMENT !
The government is the main mechanism by which skilled trades workers are being squeezed into poverty. Let me show you how this is being done.
Insurance & Workers Compensation
We need insurance right? Meh, not really. Its fair to say that 90% of construction accidents are caused by 10% of the people involved. There is a growing trend of defrauding the government by going on permanent disability. The real dilemma is that workers don’t understand the hidden costs of being a tradesman. Most companies are paying around $100-$500 month per employee in insurance costs. Many construction workers see an injury as a pay day. Why not hand the responsibility of insuring oneself to the worker and give them some incentive to not get injured!
Unemployment, Disability & Lawsuits
It’s a weird thing in this country…one minute you are a worker and have zero responsibility to understand anything at all….and the next minute you are your are a sole proprietor being sued by an employee for some stupid reason. Employees “rights” may seem like a good thing but they really just allow people to act stupid. To scam the unemployment or disability system and to sue former employers. We will see an expansion in “employee rights” because it benefits the government. The more and more they regulate business the less and less employment opportunity there will be. As the employees are squeezed into poverty looking for work they will turn to the government to legislate them into prosperity. Oh, the irony.
TAX & REGULATIONS
There is the obvious cost of direct taxes. We see those on our pay stubs every week. We are going to put aside the fact that social security will not be made available to us in the near future and that those other taxes don’t pay for school or roads or anything you might think they do. Its money down the drain. But did you ever think of the cost you company incurs to prepare these forms? The software or the accountants time? Not to mention the endless tax paperwork for the business itself. These costs are coming out of the pockets or workers everyday. In California employers charge $55 an hour, pay $32 dollar an hour in expenses to hire an employee at $25 dollar an hour. Then that employee will receive $20 after taxes. Plus they pay sales tax, so now were down to 18.6 an hour of real spending power. Forget gas, cigarettes or other luxury items with additional taxes. Now that’s social progress! /sarcasm
Market Fluctuations & Price Discovery
What happens when work stops? People are more willing to go back to work for less money! Every time a new law is passed or the government decides to fund one item versus another it creates a huge mess in the economy. One area will be showered with new work, of course the companies will post record profits but wages will likely not rise much at all. And the area without the governments spending? They will be undercutting prices just to stay in business. This cycle benefits corporations and politicians but severely hurts the average worker. Not to fear, there is a welfare check waiting for you if you are willing to accept the scraps off another mans table like a second class human being.
Inflation is a remarkable way to steal from the average worker. Let me explain it in simple terms. Imagine an island economy with 100 people who earn $1 dollar a year. ( I’m keeping the math simple). There is $100 dollars in this economy and every year each person earns a share of the economic output. Now imagine one of these people prints $50 dollars and hires 50 people to come and build his dream castle. OUR TINY ECONOMY IS NOW WORKING AT 50% EFFICIENCY. Only 49 people are still working to produce the food, clothing etc for 100 people. Everyone is still earning a dollar a year but that dollar is only buying 1/2 of what it used to buy. This is why the standard of living is going down in the United States.
Regulations Favor Large Companies
It’s basically impossible to be a small business today. The last thing the government wants is for you to be trading good and services with your neighbor and leaving all those bureaucrats out in the cold. So they regulate and tax business to an absurd degree. As a business owner you have endless liabilities and even if you put your nose to the grindstone the upside potential is hard work. Large companies are “bailed out” nowadays with cushy loans when things are bad and first jump at new work when things are good. A homeowner wants to hire you? You need licensing, bonding, insurance, tax paperwork etc. Sorry negotiating a cash hourly rate with your neighbor is Illegal. And making it illegal for people to exchange good and services is the fastest way to getting rich the government has come up with.
I don’t mean to bash governments or unions or white collar professions who profit from the situation we are in. They are just people earning a living for their family. But it’s important to understand that MORE LAWS = LESS MONEY. Raising minimum wage, increasing employee benefits, unionizing and passing laws = hiring more paper pushers. LESS PEOPLE ARE PRODUCING THE PIE AND MORE AND MORE PEOPLE ARE CONSUMING IT.