Tag Archives: wages

Feeling the financial crunch

Leave a reply

I just spent $155 on groceries that probably would have cost about $100 between 2-3 years ago. I know that prices go up, and I understand there are global factors like the price of oil that will elevate prices significantly. I get it. What I don’t understand is how lower middle class families and poor families are making ends meet?

The thing about the price of necessities going up that is often missed is that as a percentage of income, it significantly affects poorer people more. Furthermore, wage increases are negatively affected too. A person working a full time minimum wage job in BC Canada will make less than $40,000 in a year. When wages go up 3% in a year, that minimum wage employee’s salary goes up to $41,200, whereas the same 3% increase for someone that was making $100,000 sees their salary increase to 103,000… that means the higher salary person is making $150 a month more than the lower salary person for that year.

Of course, both of those workers are in a deficit when inflation has sent prices skyrocketing above 3%, but it’s clear to see how this is disproportionately affecting the poorer working class. And so again I wonder, how are these families making ends meet? What sacrifices are they making? What support are they needing that they didn’t need 3 years ago? When the financial crunch is felt, it is felt most by those who have already been struggling.

Profits and wages

It’s easy to see that capitalism is broken. Oil & gas, food, delivery, and online shopping companies have had record high profits shared with their shareholders in the past few years, while the workers in the same companies fight for a living wage. And the gaps get bigger. One thing not always recognized is that even when a ‘decent’ wage increase happens, it often benefits the wealthier employees more.

Here is a simple example of a company giving everyone a 7% wage increase. This is what it translates to:

  • A $25,000 a year employee gets an additional $1,750 before taxes.
  • A $40,000 a year employee gets an additional $2,800 before taxes.
  • A $75,000 a year employee gets an additional $5,250 before taxes.
  • A $150,000 a year employee gets an additional $10,500 before taxes.

The end result is that the gap gets bigger.

I believe that there is room in the world for social democracy. That we can lift the wages at the bottom without undermining a company. The only thing stopping this is the expectations of shareholders. Companies need to be beholden to their employees and customers first, and then shareholders.

I don’t see a workable way forward to fix the broken shareholder model, but it is undermining the balance between work and life in a free and democratic society. Surely the well-being of a company’s employees has to matter more than lining shareholder pockets… because it seems to be more and more of an either/or scenario, and the shareholders seem to be winning.

Customer Service matters

There are some stores where when you ask for help the person either can help you or finds someone who can. Home Depot is a good example of this. You feel like they want to help you and that if they can’t, well then they admit it and get someone else that they know knows their stuff. I never get that sense in Canadian Tire. You ask a question and it feels like you are inconveniencing the employee. You get an answer and you aren’t sure if it’s the best answer or just the best answer to get you to leave the employee alone.

Now I’m positive that there are some Canadian ‘aka Crappy’ Tire employees that are better than some Home Depot employees. But after decades of going to both stores (for different products not available in both stores) I consistently see better service at Home Depot. So is it the pay scale? The training? The average age or pre-employment skills of the employees? What makes one so much better than the other?

Regardless, I find myself wanting and expecting better customer service, and being less tolerant of poor service. It’s the same at restaurants. Now when you go to pay, the tip percentage offered automatically on credit card machines is usually 15, 18, or 20%, and sometimes 18, 20, or 25%. I remember when 15% was an amount you tipped for good service, now it’s the minimum expectation. I feel for waiter staff who need this tip to make their wages livable, but I also think that this shouldn’t be an expected thing the way it is, and that tips should be rewards for good customer service and not an expectation.

I remember last summer taking my wife and my daughter and her friends out for a nice lunch in Kelowna. The meal wasn’t cheap but the service was very good as was the meal. I decided that even at these prices I would tip 20%. When the tip option came up on the payment machine the choices given were 20, 25, and 30%. That seems quite presumptuous to me. I gave the 20% and felt cheap rather than complimentary.

In China I used to go to a street vendor and my favourite meal costed 32 cents Canadian. When I tried to tip the vendor would just give me a larger serving. In many other countries tipping is either not expected or greatly appreciated. Here it seems that it’s an expectation no matter what the customer service is like. But I think good customer service matters and should be rewarded either by being a loyal customer or tipping appropriately… and expecting 20% as the minimum doesn’t seem appropriate to me.

*Also, isn’t it interesting that cheaper restaurants will often start the bottom tip percentage at a lower rate than more expensive restaurants? I’m asked if I want to pay 12, 15, or 18% on my $30 meal and 18, 20 or 25% on my $90 meal. Meanwhile I seldom see a dramatic difference in the service quality.