Saturday, May 31, 2014
Interest on Wages
Who gets the interest on earned wages? Hint, it's not the workers. Minimum wage workers do not make minimum wage. How wage slaves give money to their employers is rather sneaky on the part of the employers. The worker usually gets paid by the hour or piece work. The rub comes when the worker receives their pay. In the old days workers were paid upon completion of the job or at the end of the working day. Over time the employers have kept the money longer and longer before paying the worker. Sometimes, workers weren’t paid at all. Now the employer does not trust the workers to pay them up front. That was not unusual as some people have shown they aren’t trustworthy to complete a job if they’ve already been paid for it. However, employers used this as a reason to evolve into a system of holding onto a worker’s pay until the end of a job, then to the end of the week, then to the end of two weeks and then to the end of the month, and sometimes longer. Now, consider who gets the interest from all this delayed paying of wages. I can guarantee you it sure isn’t the worker. When you get paid, if not in cash, it will be a check, which the bank hold on to it until it clears. This delay further cost the worker more in lost interest and potential late fees, and continues depletion of the worker’s hourly pay. Now look at the duration of a person’s work life and calculate how much interest they have lost in the course of this time. It could be thousands of dollars in someone else’s pocket. This is also a common practice in general contracting. The general contractor (GC) will get paid and deposit the funds in their account. The GC then hires subcontractors, but instead of paying them as the GC has been paid, the GC withholds the funds for as long as possible to get all the interest they can get before paying the subcontractors. In the process, the subcontractor loses money and is penalized for not being to pay their bills in a timely manner, which results in the low-level workers losing also. The point is, when you negotiation your pay, salary or contracts you must figure in the loss of interest for the lifetime of the work. It could mean a good retirement. This is a hidden cost no one talks about. Maybe it is time and there are ways to remedy this, but first we must settle the wage disparity and raise the minimum wage to $15 to $18 an hour. Remember, the money people are skimming off the top of your wages before you even get your check. They use your money for one to four weeks while you have to wait for every pay day.