Does Minimum Wage Increase Help Or Hurt The Appraisal Business?

[MMing5000]

Sorry for the title error ... Anyone knows how to edit the title?

i meant to say Does MininmumWage Increase Help or Hurt the Appraisal Business?

Minimum wage have increased to as much as $15/hour in some states... While appraisal fees have stayed stagnant or reduced significantly due to the creation of AMCs.

Most appraisers fly solo, but there's still quite a bit of appraisers who have a small office staff of assistants. Does the increase in minimum wage across the country help or hurt the appraisal business, or no effect? My humble opinion is that it hurts our appraisal business whether you work solo or have office assistants.

Please share your opinion on How does the minimum wage increase affect appraisers and the appraisal business?

 

[Peter LeQuire]

I don't don't.

 

[J Grant]

ZERO since an appraiser either has no assistant, or if they have one I doubt are subject to min wage laws, doesn't the law only apply to companies with a min X # of employees? In any event, one hopes the appraiser pays a competitive wage. You get what you pay for and a good assistant is worth more than a lousy one.

 

[Gobears81]

Illinois is basically a shoe-in for a minimum wage increase to $15/ hour, which is not a reassuring move for many lower cost-of-living or economically depressed sections of the state. There are quite a few sectors that this could have a significant impact on - appraisal companies will not be devastated by this move, but it won't be unaffected, either. Our company hires part-time employees that are university students, typically majoring in business or finance. It is unfortunate that such a blanket increase in the minimum wage was taken, rather than differentiating for age or geographic area, as many of these college kids are just as interested (or more) in getting some experience in the field than getting the bills paid or some extra spending money. The increase to $15 in IL will be graduated over a period of several years, and it is possible that by the time it maxes out, there might be some differences in the structure of our company, but as of now, such a significant increase would warrant dropping the position, as most of these college kids only stay with us for a semester or year.

 

[ucbruin]

If a small business can't survive paying their employees $15/hour (the increase is made over a period of time and not all at once)....

Does that mean it wasn't a viable business and was destined to fail???

 

[J Grant]

Illinois is basically a shoe-in for a minimum wage increase to $15/ hour, which is not a reassuring move for many lower cost-of-living or economically depressed sections of the state. There are quite a few sectors that this could have a significant impact on - appraisal companies will not be devastated by this move, but it won't be unaffected, either. Our company hires part-time employees that are university students, typically majoring in business or finance. It is unfortunate that such a blanket increase in the minimum wage was taken, rather than differentiating for age or geographic area, as many of these college kids are just as interested (or more) in getting some experience in the field than getting the bills paid or some extra spending money. The increase to $15 in IL will be graduated over a period of several years, and it is possible that by the time it maxes out, there might be some differences in the structure of our company, but as of now, such a significant increase would warrant dropping the position, as most of these college kids only stay with us for a semester or year.

Could you call it an internship or contract position rather than employee...since they are short term and in it for the learning not the $ as you say.

 

[Overimprovement]

It is a negative in a blanket effect first of all. Artificially raising wage for 'everyone' means that has to be paid by the businesses employing 'everyone'. That means higher prices on goods and services for everyone, including appraisers in those states. Perhaps a poor example, but you think fast food prices are going to remain the same, or quality, or serving sizes? Any redistribution of wealth will always hurt those who are the ones being redistributed FROM. It will also hurt any appraiser who has employees working for them, for obvious reasons.

In a sense, it may help appraisers, because if someone is comparing $8/hr to becoming an appraiser making $20-25/hr, that looks a lot better than falling out of bed with no HS diploma and making $15/hr, vs spending years of their life to take on a big financial risk to maybe make $20-25/hr, with poor job security for the future.

The more folks get rewarded for having little education, work-ethic, or drive, the fewer will see any benefit whatsoever in jumping through the myriad hoops required to become an appraiser, to make marginally more in a good year, with prospects looking increasingly more bleak in the future.

The other high level reason it is bad--there is only so much money to go around. In the end, appraisers get paid by lender/clients. Through AMCs many times. In both cases, if every AMC and every lender now has to pay $15/hr to every employee, even the first day teller or first day order assigner, there is even less cash available to pay the appraiser. Some businesses, especially labor heavy ones, will invariably go out of business. People will invariably have their hours cut or flat out laid off. Neither of these can be construed as good in any way for anyone. Fewer clients means a greater consolidation of appraisers working for each one, meaning some of those special lender relationships some of us now enjoy will go away. The local lender will be especially vulnerable, as they tend to have more, lower-paid employees.

Raising the minimum wage does NOT increase the total money supply available to pay laborers. Businesses will not be given fresh rolls of $100 bills from the treasury. Folks, it has to come from somewhere. Where do you think that will be?

Rant over. I tried to stay on topic anyway.

 

[ucbruin]

Could you call it an internship or contract position rather than employee...since they are short term and in it for the learning not the $ as you say.

Turn your head....
Avert your eyes....
Someone's trying to circumvent minimum wage!!!

 

[Overimprovement]

Turn your head....
Avert your eyes....
Someone's trying to circumvent minimum wage!!!

One could also locate their business in a non-minimum wage state. Licenses by reciprocity are easy to get. Seek an accountant's or attorney's help for that one.

 

[J Grant]

It is a negative in a blanket effect first of all. Artificially raising wage for 'everyone' means that has to be paid by the businesses employing 'everyone'. That means higher prices on goods and services for everyone, including appraisers in those states. Perhaps a poor example, but you think fast food prices are going to remain the same, or quality, or serving sizes? Any redistribution of wealth will always hurt those who are the ones being redistributed FROM. It will also hurt any appraiser who has employees working for them, for obvious reasons.
In a sense, it may help appraisers, because if someone is comparing $8/hr to becoming an appraiser making $20-25/hr, that looks a lot better than falling out of bed with no HS diploma and making $15/hr, vs spending years of their life to take on a big financial risk to maybe make $20-25/hr, with poor job security for the future.
The more folks get rewarded for having little education, work-ethic, or drive, the fewer will see any benefit whatsoever in jumping through the myriad hoops required to become an appraiser, to make marginally more in a good year, with prospects looking increasingly more bleak in the future.
The other high level reason it is bad--there is only so much money to go around. In the end, appraisers get paid by lender/clients. Through AMCs many times. In both cases, if every AMC and every lender now has to pay $15/hr to every employee, even the first day teller or first day order assigner, there is even less cash available to pay the appraiser. Some businesses, especially labor heavy ones, will invariably go out of business. People will invariably have their hours cut or flat out laid off. Neither of these can be construed as good in any way for anyone. Fewer clients means a greater consolidation of appraisers working for each one, meaning some of those special lender relationships some of us now enjoy will go away. The local lender will be especially vulnerable, as they tend to have more, lower-paid employees.
Raising the minimum wage does NOT increase the total money supply available to pay laborers. Businesses will not be given fresh rolls of $100 bills from the treasury. Folks, it has to come from somewhere. Where do you think that will be?
Rant over. I tried to stay on topic anyway.

The board is great because we interact with those with different viewpoints. In that vien, it's pretty silly to say the ambitious will cease getting educated or skilled, since doing so always means more money no matter what the minimum is. The fact is that lower wage service/retail jobs now make up I read aprox 40% of the US jobs, these are not stepping stone positions anymore they are sometimes the only jobs around. Yes, the price of goods/services goes up, but not all of them, and the people making a higher wage now also spend that money, creating other jobs in communities since their higher spending means other businesses flourish.

It hopefully will affect the pay scale of appraisers comparatively, though the AMC intrusion into fees is a n appraisal field/bundled fee specific, still , at least appraisers have a higher bar for the low end to compare or fall back on.