Mininum Wage

[iwashcars]

The President mentioned in his speech last night he would like to raise the federal mininum wage to $9 per hour by 2015. In addition he wants it to increase yearly based on the rate of inflation. Just curious as to what rate of pay everyone starts their line employees at. What state are you in and what type of operation do you have.
I have two full service tunnels in New York and employees start at $7.25 per hour plus tips.
Thanks,
Paul

 

[Washmee]

Ohio's minimum wage just went to $7.85 on Jan. 1. The voters decided a few years ago to make it rise every year based on cost of living index. I used to give merit raises to my line workers but since this was enacted I stopped.

 

[iwashcars]

That's one of the problems with these new laws. You cannot afford to give merit raises anymore. Here in New York min wage is most likely going from $7.25 to $8.75 this July. That's a more than 20% increase in one shot. In addition they want to make mandatory sick pay up to 80 hrs per week and yearly increases. It's good for the equipment manufactures because I thinks my operations will be moving towards increased automation.
Paul

 

[pitzerwm]

The real problem with min wages is that all cost goes up as much or more, so percentage wise you/they never get ahead. You want to do better than min get an education so that you are more valuable.

Or just vote Dem and they will support you at poverty level so they can use you as a statistic to stick it to the 2%

 

[robert roman]

In 1998, average annual industry revenue per employee was $73,000 and average wage was $26,800 or 37 percent.

In 2010, revenue per employee was $63,700 and average wage was $21,300 or 33 percent.

In other words, over the last decade, the typical carwash operator has become more efficient in using labor – roughly 4 percent so as percent of gross sales – industry-wide.

Today, the average wage for full-service line staff is about $9.00 an hour, excluding tips.

One way to address labor wages is to view staff as profit centers rather than cost centers.

For example, when I work with owners, we begin by identifying feasible ways to improve operations and standard procedures - the goal and objective is permanent elimination of non-essential work stations/staff positions.

Next, we identify feasible ways to maximize the revenue potential of each staff position.

For example, you can automate sales transactions, get rid of cashier, and allow CSA to focus on more productive activities like customer service, promotion, supervision, QC.

The end result of this process is usually fewer staff positions, higher average sales and lower labor revenue ratio.

The worst problem is trying to fight declining sales and/or rising costs by holding down hourly wages.

The better problem is to be saddled with higher hourly wages because you can afford to.

 

[smokun]

Proficient Labor Is Essential. Pay It Forward!

To piggyback on Bob's commentary, there are two viable conveyorized carwash formats: exterior and flex-serve. Both can afford pay premiums.

If you operate a traditional full-service, change formats!

Centralize your labor and separate automated carwashing from hands-on after-care. The carwash component will enjoy a competitive edge with other exteriors. After-Care will compete very effectively with all other full-service competition and generate superior production capabilities.

Pay well and insist on exceptional performance. By separating the two components, performance assessments will be crystal clear... both on-the-spot and real-time tracking. Reward performance frequently and demonstrate appreciation for bottom-line performance.

Provide extraordinary quality results and earn 100% return business as well as referrals. Eliminate nonperformance and always respond to challenge with all-hands-on-deck. Own your customers! Under-promise and over-deliver. Spoil them by making it impossible for clientele to go anywhere else to find satisfaction.

Format enables you to provide the absolute best express exterior as well as running rings around full-service competition. All at the same location!

When it comes to staff, frequently motivate with enthusiasm, verbal appreciation... and cash. Done properly, it works every time! And when staff is happy, performance profitability is robust.

 

[Earl Weiss]

In 1998, average annual industry revenue per employee was $73,000 and average wage was $26,800 or 37 percent.

In 2010, revenue per employee was $63,700 and average wage was $21,300 or 33 percent.

In other words, over the last decade, the typical carwash operator has become more efficient in using labor – roughly 4 percent so as percent of gross sales – industry-wide.
.

.

How does this account for the 1998-2010 trend away from FS to EE?

 

[Randy]

I don’t know what you guys are cry’n about. The minimum wage in Washington State is the highest in the nation at $9.19 an hour.

 

[JeffM]

The real problem with min wages is that all cost goes up as much or more, so percentage wise you/they never get ahead. You want to do better than min get an education so that you are more valuable.

While price level will not be immediately impacted, I agree with you 100%

Randy, I wish the min. wage here was $9.19. Due to bleeding hearts and the apeasement of poverty advocate groups, the minimum wage in Manitoba (Canada) is $10.25 and will more than likely be raised to $10.50 in the spring or fall.

Most people realize that a minimum wage increase impacts less than 1% of the population's income and that most of those individuals are students (high school or university.) The "single parent" or "person with disability" who needs to earn a "living wage" is not the person who gets more disposible income resulting from an increase in minimum wage.

The real problem is that there is a good portion of the population has realized that there are incentives which promote unemployment which will provide a financial situation almost as good as working full-time at minimum wage.

 

[JustaGuy]

Not to turn this into a political thread, but the bigger problem with minimum wage and the economy is that many unions have clauses in their contracts that automatically raise their pay scale proportional to any minimum wage increase, so a 10% increase in munimum wage (say from $7.00 to $7.70 per hour) also increases their base wage by 10% (say from $20 to $22 per hour). Given how many union hands touch an item from its start as raw material to finished product on the shelf, that seemingly innocent $.70/hour minumum wage increase significantly affects the price you pay for most goods.

OK, I'm done. I now return you to your regularly scheduled topic...

 

[robert roman]

“How does this account for the 1998-2010 trend away from FS to EE?”

There is no trend away from full-service. Yes, there have been few new full-service facilities built since 2005. However, the trend is definitely moving from DIY to more DIFM.

By DIFM, I am referring to consumer demand for automated washing; in-bay and conveyors (all types).

Quite frankly, there is pent-up demand for full-service in many markets. The issue is the new breed of investor is mostly interested in building express washes.

Consequently, many markets are now under-served in terms of consumers having access to facilities that provide assisted-services.

 

[smokun]

Information Is Merged, Confounding Survey Data Under-Reported

Unfortunately the industry does not differentiate between full-service and the hands-on after-care component in a flex-serve. And the 2 industry magazines collect and present data differently, as does ICA, mostly because none recognizes and/or distinguishes separate off-line services.

Full-service operations are absolutely converting to express operations for a number of reasons; mostly sinking NET profitability. With increased labor/insurance regulations, taxation and "unionism creep", industry survey reporting combined with owner reluctance to share good info. results in conspicuous information void. Consumers are finding hands-on service at flex or freestanding detail facilities.

Same is true with express exterior reporting showing no differentiation between with & without free vacuums. Embracing confounded data results sends believers on fool's errand.

Please don't shoot the messenger.

 

[Earl Weiss]

“How does this account for the 1998-2010 trend away from FS to EE?”

There is no trend away from full-service. Yes, there have been few new full-service facilities built since 2005.

QUOTE]

I am only well acquainted with the Chicagoland market. I would say that 98% of the full serve washes that existed in 1998 have converted to EE.

I would like others on this BBS to comment on what they have seen in their areas.