The economy is picking up. As work force participation increases, unemployment diminishes, labor markets tighten, and wages rise; it is simply supply and demand. Add to that the fuel of state mandated minimum wage, Colorado from $8.23/hour to $12.50/hour by 2020, Illinois from $8.25/hour to $11/hour by 2019, Maine, Arizona and Washington State minimum wages are mandated at $12.00/hour, and Washington moves to $13.50/hour by 2020. The demand for entry level workers is on the rise, and the demands by those workers are higher wages and benefits.
Minimum wages are not reflective of total labor burden*, state taxes, insurance, vacations, and federal taxes create a loaded labor cost of +7% to +11%. For our example we used the lowest rate of 7%.
*Labor burden describes the costs a business incurs to employ a worker, besides the actual cash wages or salary that it pays to the employee. Labor burden includes payroll taxes, retirement benefits, health benefits, worker’s compensation, life insurance, pensions and other fringe benefits.
This is not a discussion on the merits of mandated minimum wages, nor a discussion on capitalism and how an improved economic situation rises all boats.
It is a discussion of facts and how the labor market impacts entry level workers, the very life-blood of the BSC and retail cleaning crews.
Question, how many contracts, and in-house floor care budgets have allowances for increased wages?
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The TITAN TWIN also gives uses a distinct, competitive advantage when bidding on projects or budgeting for in-house labor.
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The TITAN TWIN is a new concept and must be demonstrated to be believed, we provide extended demonstration periods.