Why Working for Hourly Pay is DUUUUMB

So I’ve worked in the restaurant industry a long time. 10+ years. And one thing I can say is that this industry sucks. Don’t get me wrong, I love the people, the customers, the fast-paced lifestyle. But when it comes to compensation, this industry is the worst. Because most (if not all) restaurants work on an hourly pay scale. And when it comes to actual compensation commensurate to the job you actually do, restaurant employees are most likely going to be the last person to see any sort of incremental gain when it comes to effort put in and results achieved in relation to resulting profitability.

That being said, try to take any server and make them a manager and one of the first misgivings you’ll hear is about salary. They just can’t fathom going from a scale that rewards you for how much a customer likes you to a set pay-scale where your boss is saying: “This is how much I think you’re worth. Let me pay you that”. The difference here? One is arbitrary. The second is measurable.

It’s a Dog and Pony show

Let’s take it this way: let’s say I give a customer fantastic service. I’m attentive, I listen to any complaints, I liaise the order without any mistakes and I work with a smile on my face. Rain, snow, or shine I’m there busting my ass and making sure that the service is good. That being said, my pay is still in someone else’s hands. I’ve seen tables that have tipped 50 cents on a 50 dollar meal. I’ve seen tables that tip 100%. And guess what? It’s all based on the customer’s opinion of you. Maybe they don’t like your hair. Maybe someone got a colder dish. Maybe you didn’t fill the waters quick enough or they saw you laughing and joking with a co-worker in back and thought you should have been working. Either way, your performance is being constantly judged by someone who most likely doesn’t know you, or the restaurant, and perhaps has never worked in the food industry before. And now they’re in charge of your pay. It’s a dog and pony show. It’s borderline slavery. It’s being asked to sing and dance to the delight of the crowd while they deign to give you a dollar. And if you’re like any server who’s ever spent a shift in the restaurant industry, then you know that it doesn’t matter if you’re having a good day or a bad day. People will judge you on it and pay you accordingly.

You trade your money for hours and vice-versa

While you may celebrate your $15 or $22 an hour job, let’s just look at it from the opposite perspective. $15 an hour means that every time you go to fast food, you’re trading an hour of your working time for a meal. $15 an hour means that when you go to the grocery store and buy more than $100 in groceries, you’ve essentially traded a day of your work. $15 an hour means that the little things like car repair, buying house goods, or enjoying time with your friends and family can literally be pared down to an hour-by-hour compensation of the time you spent at work. If that doesn’t freak you out, then I don’t know what will. Because I can’t imagine working an hour just to buy a hamburger at McDonalds. And any large purchases becomes a matter of working for weeks to afford one thing. Is that really how you want to spend your life? The things around you being a reflection of the quatifiable hours that you worked? Because at that point you can look at anything in your house/apartment/shack and realize that “that TV cost me 2 weeks”, “This car cost me 5 years”, or “These kids are costing me a day and a half per day”. And trust me, you don’t want to be living a life like that.

Unless you really really reeeeaaaallly want your employers seeing you as just a number, where your value is ceilinged by the physical amount of time you spend on location every day, then you probably want to look at what being a salaried employee brings you.

You expand your skillset

As a salaried employee, you expand your skillset. Hourly is for a labor-level employee. Salary is for a managerial employee. And if an employer is going to take the time to salary you, you can sure bet that they’re going to get their money’s worth. Which means that they’re going to teach you about the inner working of their company. They’re going to guide you towards mindsets you should have in the industry. They’re going to lead you through employee and customer interaction and provide you with wisdom as to how to make it forward in a business world that can often be cruel and mistrusting. Because believe me when I say this: no owner/executive/boss hires to fail. They’re not going to leave you to figure it out on your own. If they’re going to guarantee you a salary, then they’re going to guarantee themselves some results. And that starts with training. So while you could be stuck, middling around at a salaried position and watching decisions being made from the outside in, instead you could be in the center of the pack, priming yourself next to the positions of power as they stand within the industry, gleaning secrets and experimenting with your own leadership styles in an environment that will protect you from any loss. Now true, you make have the sucky manager or boss or owner. But chances are that when you get to a managerial position and get to see the mindsets they take into making decisions, then you’ll begin to better understand and either justify their actions or vow to change them. Either way, more knowledge is hardly ever a bad thing.

You get to work on what’s important to you.

Does your job take an hour or a week? Who cares? You’re salaried. Your time is dedicated on what’s important, not on how many hours you sat at a desk. You could work for your first three hours of the day, get a whole lot of important things done that you know need doing, and then go home for the day. You get to peer into the issues truly underlying your company and work on solving those rather than simply putting your time on the floor and making the machines run properly. You get to influence strategy and culture rather than simply being a factory unit. Yes, it’s a double-edged sword. I’ve worked 16+ hours in places because there was just that much work to be done. But that’s the thing: there was never any doubt in my mind that the work I was doing was important. I knew I could leave at any time of that day and not risk my salary. I could take a long lunch and I’d still be paid the same. And while there were days where mathematically I was making less than an hourly employee, you get to be the captain of your own scheduling ship. At a certain point you get to sit back and say; you know what? My work here is done. I’m going to take the rest of the day off. Or I’m going to tell my boss that my objectives are accomplished and I’m going home.

There is almost no opportunity cost

Want to take a vacation? Go ahead, you’ll still get a paycheck. Get sick or need a day off? It’s fine, your salary won’t take a hit. When it comes to hourly jobs, anytime you’re off you have to price it out. Not only are you spending money doing whatever it is you’re doing on your vacation/day off/sick day. You’ll also be losing money you could be potentially making if you were working right now. It’s like a double whammy of spending. And guess what? Now that you’ve spent money, you’ve just spent hours that you had to work just to afford it (see above). Now it’s a triple whammy! But when you’re salaried, even when you’re spending money you’re making money. Even if you’re taking a day off guess what… you’re still making money. Because your money isn’t tied to time spent on location. You could be making money anywhere doing anything. And the more value you provide, the more money you’ll make. Even when you’re taking a break.

At the end of the day, hourly is for the birds. It’s arbitrary and capricious. It’s almost sneeringly rude form an employer perspective. And to finally prove the point I’ll leave you with this little nugget of wisdom. In the business world there are two types of margins: the small margins where you have to sell a lot of a product at a cheap rate in order to finally begin to break even or make a profit. Or there are the big margins where you sell one product at an enormous rate and make most of your salary for the year on one or two sales. One locks in your earnings potential. The other keeps in fluctuating on a day-to-day basis. Can you guess which one is which? By demanding a salaried position, you lock in your benefit to your employer. You come to them and say, “This is what I can give you”. And they either take it or leave it. But you’ll never doubt your worth to the company. It will be right there in a number. Conversely, in a salaried position your paycheck is purely a reflection of what an employer has to pay you to keep you showing up. It’s different than them stopping and considering what you’re actually worth. And then when it comes time for annual raises, you can step back, look at your year, and bring up the value that you’ve actually brought to the company and demand a raise. When you’re salaried, you simply go with the flow of the economy. If 12 dollars is what cooks are making these days, then $12 will be your salary.

So the next time someone tries to convince you that people “need” to be paid an X amount per hour, stop and consider what they’re actually saying. Because chances are that they’re discounting their own perceived worth to their employer. And in turn an employer won’t hesitate to pay a good employee a better annual rate, but they will hesitate to pay an hourly job anything more than what its street value is.



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