A Short Note About Wages for Labor Day

4 September 2017

A few hours ago, I got an email from my business partner, Alan, about fair wages in St. Louis.

As reported in the Riverfront Times, St. Louis City had a $10/hour minimum wage law set to go into effect in July. However, a new Missouri state law superseded it, causing minimum-wage employees in St. Louis to drop back down to $7.70/hour.

I’m sure people have different political views on whether or not the government should have a place in establishing minimum, fair, and living wages. I don’t really want to get into that side of things. As a business owner, I have the power to make positive change regardless of what the government says is the lowest amount I can pay someone–that’s what this is about.

The thing Alan alerted me to is that more than 100 businesses in St. Louis have committed to continue paying the higher minimum wage ($10) even though they could legally pay less. There actually may be many more businesses in the area that do this, and they just haven’t contacted the campaign or the Riverfront Times.

Stonemaier Games doesn’t have employees (other than myself); rather, we have some independent contractors who work as needed, usually around 5-10 hours a week at most. I pay them a minimum of $20/hour. Why $20?

  • Because $20 is the minimum I would want to work on anything for an hour. How could I ask someone else to accept less?
  • Because I don’t spend Stonemaier’s money unless it makes us better. You get what you pay for. I’d rather Stonemaier be $20 better than $7.70 better.
  • Because it feels like the right thing to do. If someone works 40 hours a week making $7.70/hour, that adds up to $16,016/year before taxes. That’s inconceivable.

I love that Kickstarter creators, entrepreneurs, and business owners have the power to make positive change not just with the people who enjoy our content, but also those we employ to help us create that content. I commend my fellow businesses in St. Louis who are sticking with $10 or more instead of dropping to $7.70.

If you have employees or independent contractors, how do you wield that power?

Also read: Why I Prioritize Paying Freelancers and Hiring in a World of Volunteers

34 Comments on “A Short Note About Wages for Labor Day

  1. As an independent filmmaker, I’ve used a combination of paid and volunteer labor to make films that would otherwise not get made — and the rare profit is generally rolled into the next project (about half of my projects make a bit of money, half lose money). However, I have been more aware of paying people properly for their work. I truly commend you for using your position to pay people a proper hourly rate.

  2. Minimum wages hurt entry level workers because they are no longer allowed to work for lower wages. This means they can never get that entry level job to start learning skills which will allow them to earn more in the future. The only group of people who benefit from minimum wages are politicians.

    “A new survey conducted by the University of New Hampshire Survey Center asks economists about their reaction to a $15 minimum wage. It finds that 72 percent of U.S.-based economists oppose a $15 federal minimum wage.” –
    https://www.epionline.org/minimum-wage/

    Seattle implements $15 minimum wage: “The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city. … On the whole, the study estimates, the average low-wage worker in the city lost $125 a month because of the hike in the minimum.” https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.9c9243010d4c

        1. The companies that go out of business because they can’t provide a livable wage for their employees definitely *should* go out of business, so they can be replaced by companies that *can* afford to pay their workers enough.

          What irks me the most about these discussions is that the focus is always on the guy at the very bottom of the totem pole, with people complaining about the least amount of money they can legally get away with paying them, but never on the individuals at the highest levels of the companies, raking in hundreds of millions of dollars annually. Instead of raising prices while maintaining the same (low) quality level, the executives can take pay cuts (while still remaining filthy rich) and more than offset these wage increases.

          But no, the onus is on the employees to work full time but remain homeless.

          1. Let’s focus on the top and pick one company, Walmart. Executive compensation runs them about $75M/yr. They employ 1.5M in the US (more if you count international, but let’s pretend for now that those people dont exist). Now, let’s say that instead of paying their executives anything, they distribute that money equally among their workers. Every worker would receive an extra $0.024/hr (that’s an extra 2.4 cents per hour). Which comes out to an extra $50/yr. So, please help me understand how does an executive taking a pay cut, even a 100% pay cut, help the people at the bottom of the totem pole?

    1. What a load of sheer propaganda. Wage disparity between bosses and employees can be obscene and guess who writes (or funds) that pro inequality propaganda. The USA needs to rediscover society and should get rid of the right wing propaganda. Inequality leads to sick societies.

  3. I admire your push to trying to compensate people’s time as you believe it should be, and not just based on what the rules dictate. Just like in games, it’s all well and good that the game functions as the rules say, but its the experience and feelings that the players have that pushes the game from good to great. I’m sure you have some catchphrase that says it more eloquently!

  4. People should be compensated based on the value they add to the organization. However, I really can’t comment on minimum wage because I employ computer programmers and even the most basic technology job pays 50k+ per year.

    Here is my take from conversations I have had with other business owners.

    Employer standards at the minimum wage end of the employment spectrum are simply looking for bodies. In general there is no plan to advance the bodies beyond minimum wage. It is 100% on the shoulders of the employers, they are getting what they expect. Bodies for the cheapest price possible.

    Jamie, I applaud you for seeing value in those individuals you employ. You did not specify but I would assume you hold individuals to a fairly high performance standard to justify the compensation you provide.

    As always I look forward to your insights and transparency as a business owner.

    1. John: That’s an interesting assumption. I wouldn’t quite say that it’s the way I operate. “Holding individuals to a fairly high performance standard” has some connotations that just aren’t in line with my management style.

      My approach is this: If I hire someone for a job, it’s because I think they’re going to be good at that job. I’m not looking over their shoulder to remind them of how much I’m paying them and that I expect them to live up to the $20/hour rate. Rather, I trust them to do a good job, because it was my responsibility to choose them in the first place. The only person I’m holding to a high standard is myself, the person doing the hiring.

      However, if the person doesn’t actually do a good job, I simply don’t work with them again (or I don’t ask them to do that specific job again).

      This approach has helped me take responsibility instead of looking for people to blame, and it’s helped me see independent contractors as people instead of numbers on a spreadsheet.

      1. By higher performance stand I was referring to you seeing them as more than bodies filling a spot. I see those I work with as an integral part the project and not easily replaced by the next body on the assembly line. Your reply clarified my ineloquent point.

        Not to toot my horn. But the best compliment I have ever received from one of my programmers was “I like that you (meaning me) allow me to challenge you and that I feel you process my argument before agreeing or disagreeing.”

  5. As a parent of teenagers, I think one area that is overlooked in min wage discussions is the impact on teens. They have never held a job, and depending on their background, may need a first job to gain self-esteem, discipline, and be rewarded for their efforts. And, although they say they know everything, they are often lacking in skills that they gain through working. With teen unemployment very high, it would be nice to have some thought given to the impact on them also.
    Gary

    1. Gary: If I had a job for a teenager, I would gladly pay them $20/hour. Age and education aren’t factors at all in my decision to hire capable independent contractors, though I see how they might be for some businesses. I worked as a soccer referee and at a movie theater when I was a teen, and while the money was a nice perk, as you said, it was much more about gaining self-esteem, discipline, and experience.

      1. “If I had a job for a teenager” is the problem. As minimum wages go up, you naturally end up with less jobs for teenagers. If I can hire a law student for $15/hr (average law students make $30k/yr out of law school) why would I hire a teenager for $15/hr? My first job was data entry for $4.25/hr, the then minimum wage in the 90s. It taught me a lot about responsibility and work ethic and integrity, and has helped me build a career wherein I now make a good six figure salary as a senior director. I wouldn’t have had that opportunity if the mortgage company had been forced to pay double that rate. I also worked at Wal-Mart in electronics for a while in high school and they don’t hire teenagers any longer. The store owner used to pull me aside and show me how the company was run, telling me he knew I wasn’t going to be there for the rest of my life and wanted to impart some wisdom.

        I also could have chosen to never leave that data entry job or wal-mart associate job, chosen not to take out student loans and work towards a degree in Information technology, and chosen not to take the gamble and apply for higher paid positions. And I could choose to complain about the minimum wage and how I can’t afford a home.

        As a director for a company with deep pockets I have a lot of employees who can’t/won’t leave because I’ve so fairly compensated them, most times fighting my own company for higher starting salaries. So I’m completely with you on fair compensation, but you and I hire skilled labor.

        Minimum wage requirements generally try and protect very unskilled labor. There are clear economic consequences for the rates we pay. Everybody wants $1 hamburgers, but you don’t get there paying $20/hr to wrap those burgers. You pay somebody more money, and you’re forced to raise the price of goods to compensate (that cost comes from somewhere), so does that low skilled worker actually make more when the cost of living costs more?

        The notion that unskilled labor should be paid more because it feels good isn’t economically viable.

        The goal should be to increase the skill of the labor force (as the Wal-Mart Store Manager did for me) and allow them to be fairly compensated for their skills as you fairly compensate contractors for the skill they provide you and let unskilled teenagers wrap burgers and encourage them towards education that becomes a career and positions them to be hired by you as a skilled contractor.

        1. Taylor: You make some great points here! I think you might be missing my point, which is that I (as a business owner) have the power to pay people fair, ethical, sustainable wages regardless of the government says the minimum I must pay. As I noted in the post, this wasn’t intended to be a political or even an economic discussion–this is about the power held by business owners.

          I don’t think anyone is saying that it’s wrong for me to pay my independent contractors a fair, ethical, sustainable wage, right?

          1. Very true. There is fantastic power held by business owners, who do have that ability so long as they’re profitable. If you were losing money at $20/hr would you continue to pay that, or simply stop making games? Just curious, and I know hypothetical questions aren’t always indicative of reality, but I wonder nonetheless.

            While it’s not an economic discussion, my point is that the market drives some of that. If a person can get paid more at one company for the same services over another he’s going to leave. If you don’t offer a fair enough wage, you might not get any applicants to do the work. This is particularly true if you’re hiring artists, and good ones even more so. So business owners need to pay fairly to keep good employees that produce quality products.

            In that regard it has a snowball effect and I assume we can both agree that the government shouldn’t have to artificially manage the market. Those blessed with success, as you have been, have the opportunity to compensate better. As I mentioned, though not a business owner, I have been in position to also more than fairly compensate employees because of the success of the company. I’ve also worked for less fortunate companies that haven’t been as giving to employees, partly out of necessity to survive.

            I truly love reading your blog posts and admire so much of what you’ve accomplished. Keep up the incredible work both professionally and on behalf of the community!

    1. We don’t have a factory in China, but we do outsource our manufacturing to a Canadian company that owns a factory (and also outsources to other factories) in China. I don’t know exactly how much each employee of the factory makes, but I do know that they have passed extensive audits from larger companies (like NBC) that confirm that fair labor standards and practices are in place.

      You allude to a good point, though: While I can choose how much to pay independent contractors, I can’t control how much they pay their employees.

  6. Another interesting aspect of this is location. I’m sure there are places, even within just the US, where you can live richly on $20/hr and other places where that may not be enough to keep you from being homeless on a single income (e.g., San Francisco).

    1. I second that. Minimum wage is subjective to every country, What is minimum $7,7 there (USA) is about 3-4€ here (Greece). Also “flexible” working hours make lots of part-timers and less full-timers.

      Imagine to have to work for 10-18h/week with those standards. Now add a degree in Mathematics, 3 foreign languages and an MSc in Theoretical Computing Science and Control Theory; congratz, that’s me. I may not carry big cartons, but that surely does not justify my wage.

      Sorry for the rant. Just had to share.

  7. As much as I hate to say this, because I lived there for a good chunk of time, have been back many times, and have many good friends over that side of the pond, but only in America can people ‘debate’ the idea that a minimum wage of 7 or even 15 an hour is acceptable; much like debating every citizen’s right to civil, equal and affordable health care.

    Granted, it’s a fine balance at the ‘bottom end’ of of the spectrum, where the wage paid impacts the end product (hence its sale’s potential). Certainly here in Australia we have tipped too far the other way, where we have become totally uncompetitive, the minimum wage now adding too much to the bottom line to leave room for a business owner to move. But the thought of expecting people to ‘survive’ in a capitalist driven first world country on somewhere between 7 and 15 an hour is madness and reeks of an inbuilt class system.

    The problem for America now is so much of its structure has been pinned on these insanely low base wages that accompany the lower end of the skills market, that to change it will cause massive issues. Consumers expect their local restaurant to cost ‘X’ but suddenly it costs ‘X x2’ because the staff wages have gone from ‘Y’ to ‘2xY’ and the business owner can’t or won’t absorb it… what happens then? People stop going, or going as much and the business shuts. As said above, if business can not afford to pay a decent wage, then it should not be in business but the case is, so many stand on the shoulders of low wages.

    And anyone trying to bring the likes of China into the argument into this are seriously misguided. One can not compare they way the two societies and governments operate. Not to mention the fact that the whole concept of global ‘fair’ trade is a lovely paper ideology that does not, never has now ever will, work in real world practice.

  8. Great stuff, Jamey! The minimum wage system in itself is a bit exotic to me. In Sweden, where I live, there is no minimum wage laws at all. Instead, unions and employer organisations negotiate salaries and other t&c’s for large groups of people, covering about 90 per cent of the work force. It’s created quite a different result, with six weeks of paid vacation, pension for everyone and entry level jobs still usually paying at least 20-25k usd per year (plus pension and benefits). It’s a bit like the GM backing off and letting the game be more player-driven. Scary but more rewarding when they live up to the responsibility.

  9. Hey all, I sent Jamey a message the other day and he suggested that I post it here since several people may have similar questions. It is a bit lengthy.

    I own a small business. I make game accessories from hardwoods and run one or two Kickstarter campaigns a year. I exhibit at GenCon, Origins, GaryCon, Gamehole, and several other gaming conventions throughout the year. I do OK for a one man operation and have recently started looking at getting my product line into gaming stores.

    Now, my problem is that, as a one man show, I’d much rather spend my time actually making my product rather than selling it. Unfortunately I don’t really have the cash flow to justify hiring someone full time on an hourly/salary basis to do marketing/sales for me. I sell some on Etsy.com and through my own website, but those sales are a drop in the bucket compared to the sales I do at shows and through Kickstarter.

    I know I could have a much larger web presence, that there are several other platforms where I could list my products for sale. I’ve been told that I should be using Amazon fulfillment, that I should have sales options on Facebook and a dozen other things, but I just don’t have the time to do this work myself.

    Are there people out there who have the technical and experience in the gaming community who would be able to do this, and if so (and I’m sure there are), what would be a fair wage to have someone do this on a freelance basis? I’d be willing to pay someone a percentage of the sale to do this work, but don’t know if there is a going rate, what that rate may be, or even how to contact/interview people with this skill set.

    I don’t know if you’ve ever approached an issue like this, but thought that since you’ve provided so much other useful information that you might have some insight on this matter as well.

    1. Thanks for sharing this here, John. It’s an interesting question for this post, as I didn’t discuss commissioned work, even though it’s a viable option for fair compensation.

      Based on what you’re saying, it’s looking like you’re curious about hiring a sales/marketing person to increase your web presence, handle social media, potentially set up Amazon fulfillment or other fulfillment/e-commerce options, talk to distributors, and potentially go to conventions and run Kickstarters for you.

      “Are there people out there who have the technical and experience in the gaming community who would be able to do this?” Of course! :) You just have to put feelers out there. I can think of several people who might be good at this, and I’m sure there are many others. A job post on several board game Facebook groups would certainly net you some applicants.

      “what would be a fair wage to have someone do this on a freelance basis?” I think it’s a balance of an hourly rate and a commission on sales, which the expectation that this is not a full-time job (if it ever shifts to a full-time job, you might remove the commission so they can have a steady paycheck). I would recommend a base hourly rate of $10/hour with a 1-2% commission on all sales (i.e., monthly revenue).

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