Does Minimum Wage Increase Help Or Hurt The Appraisal Business?

[Jacob Coleman]

Minimum wage will increase overall wages. Higher wages mean more borrowers. Most appraisers do their own work instead of hiring out. It's just too much overhead for the amount of money we make.

I agree, Amy. Also, if there are jobs that do not need to be completed locally, businesses would just outsource their jobs. For example, it's quite common to hire a virtual assistance offshore nowadays.

 

[The Warrior Monk]

Total compensation?

Yes, total compensation. Employers ultimately care about the total cost of attributed to an employee. No employee is ever paid simply minimum wage. At the bare minimum, the employer paying the minimum wage but additional compensation, which at minimum are 1/2 SS taxes and a portion of medicare taxes. Various mandated state costs may apply (workman's comp's, etc.), mandated vacation and sick days, etc. as well as various benefits. If the employer has $50/hour as the allowable cost per employee, the employer doesn't care if they're paying $10, $15, $20, $25 etc. per hour as long as the additional cost don't exceed $50 minus the minimum wage.

Many discussing the minimum-wage issues utterly ignore the total compensation. A few years ago (notably the after the 2008 credit crisis) where I live teachers were taking a pay freeze, and complained about it. Yet our school taxes were increasing by an insane amount ever year (and our taxes are not cheap here to begin with). That because there were issues with the states retirement fund with the near-zero interest rates, the skyrocketing health-care costs after the ACA was implemented, etc. So while everybody was complaining about the lack of increase in weekly take home pay, the total compensation went WAY up.

 

[The Warrior Monk]

So fees for 1004 in Mississippi, Arkansas, Carolinas and the like should be around $200 or less?

You're conflating unrelated issues. You cannot compare a fee negotiated between parties not subject to wage law with employer/employee relations. An employee is subject to various state/federal laws pertaining to compensation. Independent contractors are generally not, and you can contractually agree to work for free if you wish.

I stated "generally" because in some cases, notably contracts with larger municipalities, specific wage requirements may apply as part of the contract.

 

[Randolph Kinney]

A federal minimum wage increase wouldn’t necessarily be a widespread cash infusion for teens working starter jobs, new research says.

Millennials and Generation Xers would, by far, be the biggest beneficiaries of a proposed federal minimum wage hike to $15 an hour, the Economic Policy Institute said as it determined who across America could stand to gain from a wage increase.

The left-leaning think tank looked at the potential impact of a proposed law that would bring the federal minimum wage to $15 an hour by 2024 from its current $7.25 rate, which proponents say would only keep the minimum wage apace with rising costs.

A mere 9% of the 39.7 million workers who would directly and indirectly benefit from the raise were 19 and younger.

More than half of workers, 53%, who would benefit were between the ages of 25 and 54. Workers aged 55 and above accounted for the remaining 14.6% of estimated beneficiaries.

The millennial generation runs from 22 to 38 and members of Generation X are aged 39 to 54, according to the Pew Research Center.

https://www.marketwatch.com/story/t...ge-hike-might-not-be-who-you-think-2019-02-28

This article indirectly says something about the quality of jobs remaining in the economy or were created during the last 10 years.

 

[ucbruin]

@David Wimpelberg

My 1004 example is in response to comments regarding the different costs of living per state....
Some have said minimum wage should reflect each states' cost of living (paraphrased)....

Using that logic appraisers living in low cost of living states shouldn't be surprised at low appraisal fees....

 

[J Grant]

Randolph, there are many workers who earn above min wage but earn less than 15 an hour . THEIR wages would also rise if the law changes to $15 an hour, because if they are earning $12 hour an hour now, that puts them below the minimum of $15, therefore it would affect far more people than those just earning the minimum.

 

[J Grant]

@David Wimpelberg

My 1004 example is in response to comments regarding the different costs of living per state....
Some have said minimum wage should reflect each states' cost of living (paraphrased)....

Using that logic appraisers living in low cost of living states shouldn't be surprised at low appraisal fees....

The irony is many the lowest appraisal fees paid by AMC 's are in California and other high cost of living areas . Note that private, VA, and direct lenders pay good fees in those same areas, so it is not simply supply and demand, rather the manipulation of supply and demand afforded AMC's from their subsidized market share , which does not exist in other businesses including the rest of appraisal business outside of AMC's. ( due to bundled fee/provision 2 issue)

Back to the topic of min wage. ..which is an employment issue rather than an independent contractor issue

 

[Randolph Kinney]

There are almost 40 million workers that that would benefit (directly and indirectly) from a minimum wage hike to $15 according to the article. The current workforce size in the US is 156,694,000 people that are working. That's 25% of the workforce.

Lets see if the Washington politicians will act and raise the minimum wage. Many states and cities already have.

 

[ucbruin]

Forgot minimum wage/appraisal fees....

If income should be based on a state's cost of living than so be it....

 

[The Warrior Monk]

There are almost 40 million workers that that would benefit (directly and indirectly) from a minimum wage hike to $15 according to the article. The current workforce size in the US is 156,694,000 people that are working. That's 25% of the workforce.

Lets see if the Washington politicians will act and raise the minimum wage. Many states and cities already have.

Actually, every employee benefits, because all wages will be increased.

I've seen this happen in practice. I was a salaried employee out of college. The minimum wage for the employees was raised, and as expected and not surprisingly, everyone pay went up proportionately. Zero sum game.