Does Minimum Wage Increase Help Or Hurt The Appraisal Business?

[DTB]

If you asked the average paid Americans if they would work 5 hours for $300, I'd guess the majority would say yes....

Except for AF member appraisers....

Unfortunately, IME the "average" American does not have the aptitude for that position.Additionally the "average" American is an employee and doesn't how to solicit clients, keep clients satisfied nor run a business. They are much better suited to run for the current Congress.

 

[ucbruin]

Unfortunately, IME the "average" American does not have the aptitude for that position.Additionally the "average" American is an employee and doesn't how to solicit clients, keep clients satisfied nor run a business. They are much better suited to run for the current Congress.

I surmise from your response....
That you agree that the majority of America would say yes to $300 for 5 hours of work....

 

[George Hatch]

Making more than another person does not give you "leverage" over that person, it simply means that person makes $X an hour and you make $Y. It is a comparison, not a leverage. People compare themselves with others in similar sociology economic positions.

it is only in the marginal hierarchy of the lower paid workers, where increments around min wage comparisons would be made. If a server makes $7 an hour and a floor managers makes 11.75 an hour, the floor manager is not not "dragged down" by the server's min wage going to $9 an hour. What "leverage" is the manager losing?

I strongly disagree.

When social status is measured in terms of wealth or possessions then that's absolutely an expression of competition. When 2 applicants for renting an apartment are competing with each other for the unit and one is capable of paying $25/month more in rent than the other that is most definitely an expression of competition. Competition in the market is why you shop for goods and services in part on price. And there's nothing inherently wrong or evil about you doing that - it's simply normal human behavior.

The idea that "money is no object" is a cruel hoax that's perpetuated by the medical miracle-of-the-week dramas they play on prime time TV. IRL money does matter, costs are a barrier to getting everything we want, and people do compete with each other in order to improve their quality of life.

Simply put, the more valuable workers can and arguably should generate more income than the lower skilled workers. They should enjoy the 30% "higher' lifestyle as a reward for the additional time and effort and luck and personal connections or whatever it is that qualified them for that increased income. None of this can be said for the minimum wage worker who has yet to prove that additional value to their employers. Not even you are talking about giving them the raise on the basis of merit or qualifications or performance, but strictly on the basis of need.

 

[DTB]

If you asked the average paid Americans if they would work 5 hours for $300, I'd guess the majority would say yes....

Except for AF member appraisers....

Unfortunately, IME the "average" American does not have the aptitude for that position.Additionally the "average" American is an employee and doesn't how to solicit clients, keep clients satisfied nor run a business. They are much better suited to run for the current Congress.

I surmise from your response....
That you agree that the majority of America would say yes to $300 for 5 hours of work....

I would say yes to $1,000 for 5 hours of work. Your point is...

 

[Michigan CG]

If you asked the average paid Americans if they would work 5 hours for $300, I'd guess the majority would say yes....

Except for AF member appraisers....

Your statement is too simplistic. First of all we don't make $300 for five hours of work; we have expenses. Let us say that is 20% for round numbers. So we are down to $240 for that five hours. Then we have to pay our own side of SS so subtract about another 7.5% and we are now down to ~$220. Most employers offer a 401k match, subtract another 4% so we are down to about $210 for that five hours of work which is $42/hour.

A plumber or electrician around here gets about $35/hour and of course anything over 40 is OT. In addition to that $35/hour they get benefits including retirement. I am told that is worth about $15/hour. The electrician/plumber make make less per year than I do but their total compensation is about $50/hour while you example leads to about $42/hour.

Additionally there is RISK. Every smart business owner takes into account risk and measures that against other opportunities like a regular job (opportunity cost). We have to take into account that we might lose a major client or maybe 2008 will happen again. People working for employers generally don't have the risk of the employer.

Then of course I have to maintain a professional license, take CE classes and maintain my business like trying to collect from deadbeats, paying quarterly taxes, doing some of my own accounting, marketing, etc. So, while that five hours grosses me $300 I have other hours in my business where I get no compensation.

I will compare that to my wife's profession, nurse practitioner. NPs make $40-$70/hour depending on experience and specialty; obviously some make a lot more. She has to take CE and has to maintain two licenses (state NP license and her DEA License to prescribe narcotics). The employer pays for all of that. Additionally they pay her her paycheck to take the CE classes (she gets a week of paid CE time), the transportation to CE and the hotel room and meals. How much is that worth?

She gets a 4% match on her retirement, has great benefits including health care. How much is health insurance worth that is mostly paid by the employer? How much is her four weeks of vacation time and one week of sick time worth? Is the appraiser making $42/hour or a lot less when we add in all the things we don't get that similarly paid professionals make?

$300 for five hours work is very misleading.

 

[ucbruin]

Your statement is too simplistic. First of all we don't make $300 for five hours of work; we have expenses. Let us say that is 20% for round numbers. So we are down to $240 for that five hours. Then we have to pay our own side of SS so subtract about another 7.5% and we are now down to ~$220. Most employers offer a 401k match, subtract another 4% so we are down to about $210 for that five hours of work which is $42/hour.

A plumber or electrician around here gets about $35/hour and of course anything over 40 is OT. In addition to that $35/hour they get benefits including retirement. I am told that is worth about $15/hour. The electrician/plumber make make less per year than I do but their total compensation is about $50/hour while you example leads to about $42/hour.

Additionally there is RISK. Every smart business owner takes into account risk and measures that against other opportunities like a regular job (opportunity cost). We have to take into account that we might lose a major client or maybe 2008 will happen again. People working for employers generally don't have the risk of the employer.

Then of course I have to maintain a professional license, take CE classes and maintain my business like trying to collect from deadbeats, paying quarterly taxes, doing some of my own accounting, marketing, etc. So, while that five hours grosses me $300 I have other hours in my business where I get no compensation.

I will compare that to my wife's profession, nurse practitioner. NPs make $40-$70/hour depending on experience and specialty; obviously some make a lot more. She has to take CE and has to maintain two licenses (state NP license and her DEA License to prescribe narcotics). The employer pays for all of that. Additionally they pay her her paycheck to take the CE classes (she gets a week of paid CE time), the transportation to CE and the hotel room and meals. How much is that worth?

She gets a 4% match on her retirement, has great benefits including health care. How much is health insurance worth that is mostly paid by the employer? How much is her four weeks of vacation time and one week of sick time worth? Is the appraiser making $42/hour or a lot less when we add in all the things we don't get that similarly paid professionals make?

$300 for five hours work is very misleading.

Would average Americans like to make $40/hour?

I believe they would....

 

[Peter LeQuire]

"Not an apt comparison because appraiser fees impacted by AMC fee gouging/corrupt selection agenda in assigning work exists in its own sphere, for starters fee appraisrs are not hourly employees ."

But I don't know one fee appraiser who doesn't - at some point - evaluate her productivity by how much money she earns for the number of hours she works. Granted, her fee isn't offered or paid her by her client, but the average hourly "pay" (fee) is one measure of the value of appraising compared to other occupations. Conversely, I've never known or known of an hourly employee who got paid her hourly rate for just sitting around doing nothing: hourly employees are generally evaluated frequently to determine how they perform in relation to established standards.

 

[The Warrior Monk]

Would average Americans like to make $40/hour?

In actually, it's not the per hour wage that matters, its the overall compensation, after consideration of employer-paid taxes and benefits. People tend to fail to include that in their analysis of wages paid.

A striking example of this I've seen deals with public schools. Teachers were complaining that the didn't get pay increases for a few years. However, a review of the school budget indicates that the cost of their benefits were substantially increasing while they were complaining about salary. So their overall compensation was notably increasing.

 

[Peter LeQuire]

When I worked for Big Mortgage, it seems total compensation expense for all non-commissioned employees was around 135% - 140% of wages.

 

[bnmappraisal]

If you asked the average paid Americans if they would work 5 hours for $300, I'd guess the majority would say yes....

Except for AF member appraisers....

On the surface I agree with you here UC. And my first quick response after reading your comment was "OF COURSE!"

But then I got to thinking about it (and then saw the next few responses as well) and it got me thinking of my friends who work at 9-5 jobs, including some at AMCs (to bring it back to an appraisal topic)

And it got me thinking of the MANY comments I get from (even one of my best friends in life who works at an AMC) "You guys get paid too much" because that's all they see and hear

As in your example: 5 hours and $300 or $60/hr and they're making roughly $20/hr

I have to say I have to agree with MCG in Post #135 because I have a very similar argument with my friends (especially my best friend)
Yea great (again to use your $300 example) i get that $300 check sent to me, but right off the top I have to take out taxes ... and it goes from there.

At the end of the day, that's why I don't necessarily look at the "hourly" wage I make, but the overall compensation.
Some assignments I look at and think D@mn I made some $$$ on that ... others I think D@mn, am I gonna make any $$$ on that???

(Edit to add: So at the end of the day, I'm not really earning $300 for 5 hrs of work)