Employer’s Market


In today’s economy, we have an employer’s market. This means that the job market is overwhelmingly in favor of employers. This grants employers leverage to hire and fire whenever they want. However, despite these advantages that they have, many employers are crying wolf about there just not being any eligible candidates to fill their roles. What these employers—that happen to be White—are really saying is that there aren’t any suitable White candidates to fill these roles. Right now, America is in the midst of an opioid epidemic which bears the likeness of the bubonic plague. Moreover, these jobs are what are considered to be “good” high-paying jobs. So, companies don’t want to hire Black people to fill these roles. In fact, many are discussing removing drug testing because it’s proving to be too much of a barrier. So, these employers would rather hire drug addicts and lose money on 2 ends (paying the addict’s salary and losing money due to low productivity) than hire qualified Black candidates. However, the employer’s market goes beyond just discriminatory hiring practices. Employees’ salaries are simply not keeping pace with inflation. People in my generation find that they make less money now than their parents did—when you account for inflation. Furthermore, many companies are employing illegal practices to keep employees’ income low. The biggest one is putting employees on salaries to avoid having to pay overtime; hence, the rise in Fair Labor Standards Act lawsuits. In order to stem the tide of being sued, many employers give quarterly bonuses to employees for doing their jobs well. However, these bonuses are just pennies of what the employees are actually owed. For example, if you’re a manager-level employee making $60K annually, but you’re working 66 hours a week; 55 hours at the office and 11 hours at home, then the below is the breakdown of your income.

Exhibit A
$60K annually / 12 months = $5K a month
$5K a month / 4.3 weeks = $1,162.79 a week
$1,162.79 a week / 6 days = $193.80 a day
$193.80 a day / 11 hours = $17.62 hourly
Now, your job rewards you quarterly with $3K bonuses if your performance is up to par.
$3K bonus * 4 quarters = $12K annually in bonuses

Total Pay
$60K base salary + $12K in bonuses = $72K Gross annually 

However, if you were being paid traditionally—with a base salary of $50K instead of $60K--then you’re pay would be the below.

Exhibit B
$50K annually / 12 months = $4,166.67 a month
$4,166.67 a month / 4.3 weeks = $968.99 a week
$968.99 a week / 5 days = $193.80 a day
$193.80 a day a day / 8 hours = $24.22 hourly
Next, let’s calculate the overtime.
66 hours – 40 hours = 26 hours overtime
26 hours overtime / 6 days = 4.3 average overtime hours per day
$24.22 hourly * 1.5= $36.34 overtime pay
$36.34 overtime pay * 4.3 hours = $156.22 daily
$156.22 daily * 6 days = $937.31 weekly
$937.31 weekly * 4.3 weeks = $4,030.45 monthly
$4,030.45 monthly * 12 months = $48,365.40 annually

Total Pay
$50K base salary + $48,365.40 annual overtime pay = $98,365.40 Gross annually

So, as you see, the bonus that you receive quarterly is really just the pennies of what is owed to you. This is why employees receive bonuses so frequently. It’s not that you’re doing an exceptional job. You’re merely doing your job to acceptable standards. This is why if you don’t receive any bonuses, then you’ll be receiving walking papers. The only perk to the bonuses is that they’re not taxed as heavily as overtime is. The below illustrates my point.

Exhibit A
$3K bonus *15% taxes = $450 taxes each quarter
$3K bonus - $450 taxes = $2,550 Net quarterly bonus

Compared to

Exhibit B
$937.31 weekly *2.15 weeks = $2,015.22 bi-monthly overtime
$2,015.22 bi-monthly overtime *15% taxes = $302.28 taxes bi-monthly
$2,015.22 bi-monthly overtime - $302.28 taxes bi-monthly = $1,712.94 Net bi-monthly overtime

Now, I’ll illustrate the total annual net incomes so people can understand how much they’re being ripped off by being placed on these salaries.

I round the tax amounts up to the nearest whole numbers—in case anyone wonders how I get my figures.

Exhibit A
$60K * 19% Taxes = $11,400
$60K - $11,400 = $48,600 Net Annual Income
$2,550 Net Quarterly Bonus * 4 quarters = $10,200 Net Annual Bonus 
$48,600 Net Annual Income + $10,200 Net Annual Bonus = $58,800 Total Annual Net Income

Exhibit B

$50K * 18% = $9K
$50K - $9K = $41K Net Annual Income
$2,015.22 bi-monthly overtime *15% taxes = $302.28 taxes bi-monthly
$2,015.22 bi-monthly overtime - $302.28 taxes bi-monthly = $1,712.94 Net bi-monthly overtime
$1,712.94 Net bi-monthly overtime * 26 bi-monthly pay cycles = $44,536.44 Net Annual Overtime
$41K Net Annual Income + $44,536.44 Net Annual Overtime = $85,536.44 Total Annual Net Income

Exhibit C

$85,536.44 Total Annual Net Income (Exhibit B) - $58,800 Total Annual Net Income (Exhibit A) = $26,736.44 Difference (Exhibit C)

So, the average employee—given similar circumstances—is being underpaid by $26K+.


Now, aside from my little breakdown showing that your bonuses are simply pennies of what you’re supposed to be getting paid, it also showcases the need for more people. There isn’t any reason why employees should be routinely averaging 26 hours of overtime. However, employers, nowadays, are so greedy that they negate employees' work-life balance. Moreover, employers even negate their reputations. This is why turnover is such a huge issue nowadays. Companies are cutting costs by paying less, working their employees more, and hiring lower quality workers. (By the way, we see the results of this.)

Another testament to the fact that we’re in an employer’s market is the fact that employees are going through much longer stretches of unemployment. The saying used to be put away 3 months’ worth of your income for an emergency. This number jumped to 6 months’ worth of income. Now, we’re at a year’s worth. This is practically impossible for most people. Being unemployed this long means bankruptcy for most Americans—particularly Black men. This greatly benefits employers since they know that employees can’t easily find another job. This is the exact opposite of how things were in the 1980s before the stock market crash. Back then, one could quit a job one day and start another before the week was over. Back then, the labor market was an employee’s market.

References

Shout out to Lisa Cabrera and her channels. Many of my references, I found listed checking out videos on her channels.
The Hill
New York Daily News
Money/ How Stuff Works
Wenzel Fenton
Salary Calculator
Penn Live

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