Are You Worth Your Wage?

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Okay, don’t close this window yet. There’s a point to all of this. I know many people have adversarial relationships with their employers, but this will help shed some light on how they see you as an employee, which will ultimately make your working relationship better. This will most likely lead to raises, promotions, happy working conditions, and more control over how you work. Worst-case scenario: You lose three minutes, and decide you deserve a better job. That’s valuable to know too.

First off, most employees have no idea how much they actually cost their employer. In this fantastic article about salary negotiation, Patrick McKenzie writes, “[G]et into the habit of seeing employees like employers see them: in terms of fully-loaded costs.  To hire someone you need to pay for their salary, true, but you also have taxes, a benefits package, employer contributions to retirement, healthcare, that free soda your HR department loves mentioning in the job ads, and what have you.” Depending on a variety of factors, for many jobs, “a reasonable guesstimate is between 150% and 200% of their salary.” You cost more than what you see on your paycheck. When I say it like that, it seems obvious, but it’s a significant jump. Your $20/hour is more like $30/hour. This is just a quick aside, but keep it in mind if you didn’t know this already. Let’s get to the meat of this article.

Let’s say you have a below-average job. It’s not too stressful, and you spend one of your eight hours a day just Facebook-ing. Regardless of how you spend your time, every three minutes, someone from accounting walks by your desk, taps you on the shoulder, and hands you $1. “Thank you,” you say in this absurdist scenario. “See you in three minutes. I’m gonna watch a cat video now.” Here’s the thing: From an employer’s point of view, this is exactly what’s happening. If you make $20/hour, by the numbers, this isn’t an absurdist scenario at all. It’s just math! Now, I get that you can’t be directly productive every minute you’re at your workplace, but I started asking myself, “Am I worth what I’m being paid? Even at my (now-)$16/hour job, am I actually making my employer $1 every 3m45s? Not only that, but am I making them profit that will also cover the cost of keeping the lights on and the store open? Is it notably better than the 7% they’d be earning in an index fund instead?”

When you think about it that way, simply employing you is a goddamn risk. If the position is a mutually beneficial fit though, you’ll be earning them boatloads of money using a passionately developed set of skills, and they’ll be paying you well to develop those skills until you’re making boatloads of money too! Remember how we talked about going “above and beyond in work and business”? I’ve been using real-time pay calculators as a motivational tool at my day job. When I see it tick up $10 and I know I’ve actually done nothing, I don’t particularly feel good about myself. It’s a gentle nudge towards productivity, and I’m thankful for that. I always strive to do more now, and I’m certain it shows.

This is even more insane with my wedding photography. To a client who’s paying me ~$400/hour to shoot, I’m getting paid $1 every nine seconds. Am I creating art worth $1 every nine seconds? I damn well better be to charge my rate. Knowing this helps me kick ass at my job!

Think about how you make money for your company. Would you hire you, or are you being a leech? Would you be more productive doing something better? Are you worth $X every X minutes? If you’re not, it may be time to find a better fit.

As both an employee and an employer, I’ve seen it from both sides. Are you worth your wage?

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