There’s a great rule of etiquette in life, and it goes something like this: Never talk about religion, politics, or money.
I imagine there have been many great arguments over fine dining tables about those three topics, especially when a glass or two of chardonnay has been poured.
But today, fear not. I won’t be talking religion or politics. I will be talking about money.
Henry Ford once said, “Low wages are the most costly any employer can pay. It is like using low-grade material—the waste makes it very expensive in the end. There is no economy in cheap labor or cheap material.”
And, that quote seems fitting now as the economy begins to rebound, and people start hiring again. While the unusually harsh winter stalled growth in many areas, recent data has shown that “consumers are ramping up spending, businesses are ordering more goods and manufacturers are expanding.”
Here’s where the money–talk starts, and I’m talking to all of my finance, accounting, and IT professionals when I says this: All of this growth and renewed economic vigor is going to increase your workflow and impact your company’s costs. Period.
Gene Marks is a columnist, author, and small-business owner, whose latest article in inc.com lays out some of the reasons why you should expect, and plan, for these increases.
The National Minimum Wage Will Go Up
As Marks reports, huge companies like Walmart are finally starting to adjust to, and accept, the new political landscape. Low–wage earners really do need to earn more in order to help boost our economy.
He writes, “If (your company) is still paying the minimum, you can expect to see this go up to somewhere around $10 per hour sometime in the next year or so. That’s a 43% increase by the way.” Not an inconsequential amount, and one that will impact the day–to–day numbers and workflow of a typical finance and accounting professional, and their company’s bottom line.
Healthcare Costs Will Go Up
Premiums are set to rise as insurance companies are now required, by law, to provide essential benefits in the anticipation of an influx of new, formerly uninsured customers. And, a large chunk of them haven’t signed on yet.
Marks expands on this issue, “What happens if the rest of the uninsured–the young, the evasive, the gamblers–don’t show up? Who will pay for those increased health costs that our insurance companies are now required to provide?”
Inflation Will Rise
Following the ‘up and up’ theme, prices are rising, and soon finance, accounting, and IT professionals will see salaries across the board rising with that.
Inflation is not necessarily a bad thing as it helps stimulate the economy, making it a more vibrant job market, but you should expect “wages to rise anywhere from 2 to 5 percent depending on the job, your industry and your region…And remember that this increase will contribute to higher employer taxes and more contributions to retirement plans, too, as these amounts are generally tied to salaries.”
The Job Market Will Rebound
What’s good news for job seekers isn’t always the best news for business owners and vice versa.
New employees will expect better training, and will likely have more offers to choose from as well. However, as Marks points out, “These are good problems to have when compared to the problems you had a few years ago.” Indeed, they are.
We all want growth in the economic sector. And while some will see an increase in numbers and costs and other financial side effects of that growth, I’m sure that you would agree that the alternative—continued stagnation—is not a viable option.