She got a forgivable loan for her business, and her employees hate her for it.

[DrMrLordX]

Another perspective on the SBA loan program:

Many small businesses say loans won't get them to rehire

WASHINGTON (AP) — Some small businesses that obtained a highly-coveted government loan say they won’t be able to use it to bring all their laid-off workers back, even though that is what the program was designed to do.

apnews.com

Worth a read.

 

[brycejones]

Yes it is I not only lived on 28k/yr I thrived on it. 28k isn't enough to live on if you're an entitled brat. I make almost 3 times that now and still live on 20k/yr just because life is not that hard, personally I feel like I live like a king. It also means they're lazy if they want more, they should go earn more, thats what I did.

Single? No kids? Tiny shit hole town no one else wants to live in? 20 year old car? EST beans and rice all the time?

 

[pcgeek11]

Sometimes you get one bad wait staffer at an otherwise good place, or the management had a bunch of people call out so you get bad service anyway because the person covering twice as many tables is being pulled in too many directions at once.

Well there is some wiggle room. Not much, but some.

 

[senseamp]

Typical greedy assholes that want something for nothing.

Her or the employees? She wants them to miss out on unemployment benefits so she can get free government money to pay rent.

 

[skull]

Not sure what kind of magical land you live in where you pay little to no rent, don't go out to buy food or groceries, don't have to pay the electric/gas/oil bill. No mortgage, no student loans. Then again, you may have been one of the lucky people in a tough economy where their parents provided most of that for you.

Major metropolitan area in the midwest own my own little run down house in what some would call the wrong side of the tracks PITI is $400/month. I spend $400 a month on groceries. My gas/electric is $100/month(insulated, installed high eff. appliances myself), just cell and internet no cable $300/month for health insurance. 2k paid for car. Went to trade school during high school no student loans. Like I said lifes easy, people make it too hard most my peers won't live where I live. They have to be on the other side just 5 mins down the road where prices double. I on the other hand love my little neighborhood and don't have any problems. The same ones can't drive a 12 year old car they have to have one with a payment, then they spend money on random useless stuff and before you know it like y'all they think its hard to live on 30-40k/yr.

Did stay with my parents for a bit after being homeless over a decade ago but moved into an apartment when I was still making ~20k/yr, somehow still saved money and invested in my business, they weren't paying for shit. The apartment was free though because I did maintenance on the landlords other properties in exchange for rent.

 

[Exterous]

28k yearly is living like a king if you're a poor college student with 0 responsibility and don't have to pay student loans yet.


28k yearly isn't much when you actually have to provide everything for yourself. that's a little over 2k/mo

rent - on the very low end, $500/mo (oh hey, there's 20% of you're pre-tax earnings). live in a growing area? double that, easily. eventually, you'd have to get roommates. and god help you if you live in SF, LA, or a major downtown metro area (i split a 2BR/2BA apartment in LA, total rent was 2300/mo)

phone and utilities - $250/mo for phone, tv/internet, water/electricity/trash
renter's and auto insurance - $75/mo. i'm ballparking. YMMV.
car payment - $200/mo
gas and maintenance - $200/mo
food, household items - $200/mo
health expenses - $100/mo just for insurance, not actual usage. let's assume a perfectly health person with 0 usage.

so we're at $1525/mo, which is 65% of pre-tax income. this assumes you don't do anything but eat, shit, sleep, and work. no social life. no going out. no hobbies. nothing.

throw in fed, state, and possibly city taxes... and is it any surprise people live paycheck to paycheck?

The below is not an argument for or against the wages paid just curious about whether someone could live on $13.50/hour in the area assuming 40 hours a week and 52 weeks a year and to see what data I can find on the staff. Obviously we don't know the exact hours provided and staff wages beyond the data lacking news report.

So I went down the rabbit hole a bit. Looks like she employs the following jobs and I attached the reported hourly average per job for the state:
Stylist&Colorist: - $20/hour
Massage Therapist - $32/hour
Esthetician - $25/hour
Endermologie Tech - (Couldn't find)
Lash Tech - $24/hour
Makeup Artists -$36/hour
Nail Tech -$21/hour
Spa Attendant - $14/hour
Spa Coordinator - $15/hour

It seems likely she employs a number of people that make more than the US median wage income when divided by hours or roughly $16/hour. Looks like this is in King Country however which is $33.26/hour median. But that includes Seattle and this particular city is on the very edge of King county, butting up against Snohomish Co which is $26.44/hour. It's too bad I couldn't find the numbers of each position she employs to know how close she gets to that but just averaging those hourly rates (Which seem in line with what was reported) would mean she pays in line with the median pay for Snohomish Co.

For the ability to live on $13.50/year in the area:
Looks like rent in the area can be had at about $650-750 a bedroom
Phone and utilities sounds about right
You can get a civic in the area with just under 100,000mi for just under $4,000 or a car payment of $117 a month for a 36 month loan
FDA food plan cost estimates: $168/mo. Unfortunately the FDA links to the contents of their food plans are currently broken
Gas price seems to be around $100/mo given the average miles driven and gas price for the state but a reliable car like a civic or corolla should be well under $100/mo maintenance

So $1525 might be a little high (pretty good job of being in line though without spending the unnecessary amount of time that I did) - probably closer to $1350 but I don't have data on healthcare plans and couldn't find easy renter's insurance estimates.

Washington doesn't have a state income tax and effective tax rate for ~$30,000 is going to be pretty low. Take home should still around $25,000. Taking your number of $1525/mo that still leaves $560 extra a month or $730 extra a month from my numbers for things like social life, hobbies, a nicer car etc.

As an aside I've also been curious if proximity to Universities depresses wages for low skill jobs due to an abundance of people looking for part time work. The Spa is less than 3 miles from the University of Washington Bothell which is not a huge school at 6,000 students but thats also walking distance

Various sources:

ESDWAGOV - Median and hourly wages

esd.wa.gov

https://www.oasisspaandsalon.com/contact/

zillow.com
citidata.com
autotrader.com

USDA Food Plans: Cost of Food Reports (monthly reports) | Food and Nutrition Service

www.fns.usda.gov

Washington Income Tax Calculator - SmartAsset

Find out how much you'll pay in Washington state income taxes given your annual income. Customize using your filing status, deductions, exemptions and more.

smartasset.com

*I also appriciate that a 401k is listed as a benefit. Based on my assumptions on business side this is not often something you would see offered by such a small company in SE MI. YMMV by region obviously

 

[Mai72]

I feel for her employees, they are in a tough spot, as is she. Being a small business owner is tough, it seems like they are always on the edge of extinction from just one event like this. My wife runs a small business with 5 employees. It is true that you have to factor in local wages, cost of living, what you charge your customers, there are so many factors that determine wages.

I know my wife would be out of business if she were required to pay every employee $15 an hour or more. Typically her employees are single, or using the job as a supplemental income to another higher income spouse etc. Not every job is a job you can live off of and feed a family of four on along with all the costs associated, that's simply impossible. If you think otherwise you can prove your theory by going to a bank asking for a $400,000 loan to start a business because you can answer phones or stand on your feet all day. Then go in as a dentist or lawyer and ask for money to start a practice, which person do you think is going to get the loan?

The true culprit imho is larger businesses and corporations that pay their employees disproportionately low wages to what they make in revenue. Along with the tax advantages they receive it's crazy. Small businesses get screwed by state, local, and federal taxes. There is no way my wife can eliminate those taxes by gaming the system, therefor she actually pays in more taxes per year than Amazon. That's fricken' crazy if you think about it.

My parents were small business owners for many years. I saw the struggle. It didn't help that they lived in NJ which is notoriously known to be against small businesses. Taxes are very high here. My mom would complain often about finding good help, and state taxes. lol.. She liked to hire foreigners because of their good work ethic. She paid very well $15 on average, and this was 10 years ago. She knew that if she wanted good help, she had to pay a decent hourly wage. Also, I don't know how people survive on $13 an hour. Well I do know and it's not pretty. Working 3 jobs to survive. Living at home with your parents in your 40s. Or, living with a home full of other people. Not a life I would recommend for anyone. Yet, I know plenty of these people. Always complainging about money, and not having enough. That life is too expense. True, but it probably has more to do with the income. $13-15 an hour is pretty bad in NJ.

 

[Mai72]

Her or the employees? She wants them to miss out on unemployment benefits so she can get free government money to pay rent.

The problem with that mentality is where does it end? This is only temporary. People tend to be lazy. My fear is most people are going to get used to getting the unemployment, plus $600 extra and are going to have a very difficult time going back to work. Many are making more on unemployment now then they would if they were working their regular jobs. You don't think that this is going to leave a soar taste in their mouth when they return to work? And, that is a BIG if since IMO many of those positions aren't coming back. They are permanetly over. They just don't know it yet. And, the business owner in the article is probably thinking about getting rid of half of her staff. Why would she want to bring them back on with that kind of attitude? I bet that she is probably looking to replace them as we speak.

 

[senseamp]

The problem with that mentality is where does it end? This is only temporary. People tend to be lazy. My fear is most people are going to get used to getting the unemployment, plus $600 extra and are going to have a very difficult time going back to work. Many are making more on unemployment now then they would if they were working their regular jobs. You don't think that this is going to leave a soar taste in their mouth when they return to work? And, that is a BIG if since IMO many of those positions aren't coming back. They are permanetly over. They just don't know it yet. And, the business owner in the article is probably thinking about getting rid of half of her staff. Why would she want to bring them back on with that kind of attitude? I bet that she is probably looking to replace them as we speak.

Extra $600 unemployment is a limited time offer, just like the government paying her rent. So we know exactly when it ends. Her employees are sitting at home, they should be furloughed and on unemployment. She is paying them to do nothing with taxpayer money, so she can get the government to also pay her rent. PPP was an ill conceived, inefficient, and corrupt program from the get go, to make money for banks and indirectly bail out the landlords. Unemployment insurance at least bails out the employees.

 

[skull]

The below is not an argument for or against the wages paid just curious about whether someone could live on $13.50/hour in the area assuming 40 hours a week and 52 weeks a year and to see what data I can find on the staff. Obviously we don't know the exact hours provided and staff wages beyond the data lacking news report.

So I went down the rabbit hole a bit. Looks like she employs the following jobs and I attached the reported hourly average per job for the state:
Stylist&Colorist: - $20/hour
Massage Therapist - $32/hour
Esthetician - $25/hour
Endermologie Tech - (Couldn't find)
Lash Tech - $24/hour
Makeup Artists -$36/hour
Nail Tech -$21/hour
Spa Attendant - $14/hour
Spa Coordinator - $15/hour

It seems likely she employs a number of people that make more than the US median wage income when divided by hours or roughly $16/hour. Looks like this is in King Country however which is $33.26/hour median. But that includes Seattle and this particular city is on the very edge of King county, butting up against Snohomish Co which is $26.44/hour. It's too bad I couldn't find the numbers of each position she employs to know how close she gets to that but just averaging those hourly rates (Which seem in line with what was reported) would mean she pays in line with the median pay for Snohomish Co.

For the ability to live on $13.50/year in the area:
Looks like rent in the area can be had at about $650-750 a bedroom
Phone and utilities sounds about right
You can get a civic in the area with just under 100,000mi for just under $4,000 or a car payment of $117 a month for a 36 month loan
FDA food plan cost estimates: $168/mo. Unfortunately the FDA links to the contents of their food plans are currently broken
Gas price seems to be around $100/mo given the average miles driven and gas price for the state but a reliable car like a civic or corolla should be well under $100/mo maintenance

So $1525 might be a little high (pretty good job of being in line though without spending the unnecessary amount of time that I did) - probably closer to $1350 but I don't have data on healthcare plans and couldn't find easy renter's insurance estimates.

Washington doesn't have a state income tax and effective tax rate for ~$30,000 is going to be pretty low. Take home should still around $25,000. Taking your number of $1525/mo that still leaves $560 extra a month or $730 extra a month from my numbers for things like social life, hobbies, a nicer car etc.

As an aside I've also been curious if proximity to Universities depresses wages for low skill jobs due to an abundance of people looking for part time work. The Spa is less than 3 miles from the University of Washington Bothell which is not a huge school at 6,000 students but thats also walking distance

Various sources:

ESDWAGOV - Median and hourly wages

esd.wa.gov

https://www.oasisspaandsalon.com/contact/

zillow.com
citidata.com
autotrader.com

USDA Food Plans: Cost of Food Reports (monthly reports) | Food and Nutrition Service

www.fns.usda.gov

Washington Income Tax Calculator - SmartAsset

Find out how much you'll pay in Washington state income taxes given your annual income. Customize using your filing status, deductions, exemptions and more.

smartasset.com

*I also appriciate that a 401k is listed as a benefit. Based on my assumptions on business side this is not often something you would see offered by such a small company in SE MI. YMMV by region obviously

I'd say utilities are high if they're renting an apartment, water, trash and heat is generally included around here, don't need cable, electric $50 phone $50 internet $50. Foods low though no way I'd live on whatever bland/junk food $168/month gets you unless I really had to. So I'd say it breaks even.

So not only can someone on said "low" income provide for themselves and have discretionary money, if said person is dedicated they can save that extra money every month to invest. Life is always cheaper when you have money, pay cash for your car next time, pay for insurance by the year, etc.. On top of it they could have a roommate, work an extra job, side hustle there are always ways to save/make even more money.

Most people take the lazy way out though. They won't stick to the budget, they want a nicer car now, need that new iphone, designer clothes and so on. This chick I'm screwing was complaining about her credit card debt, turns out she bought a 6k bed on a CC. I didn't even know beds could cost that much, 3 times what I paid for my car, insanity, chick makes like 35k/yr. People are extremely stupid(you guys should know look how many people voted for and still support trump) and people are especially stupid with money. They don't need more money, they aren't making poverty wages, they need to learn how to live within their means. If you want to feel bad about wages look to the people in third world countries making $1/day and how they live, Americans need to stop complaining and be grateful for what they got.

 

[DrMrLordX]

Unemployment insurance at least bails out the employees.

It does, but they're still screwed if their old employers have gone out of business in the interim. We're trying to avoid mass unemployment being a lasting phenomenon. The payroll protection program might not have been the right tool for the job, but simply giving out extra unemployment might not have been the right move either. We did both while giving little thought to the consequences.

 

[senseamp]

It does, but they're still screwed if their old employers have gone out of business in the interim. We're trying to avoid mass unemployment being a lasting phenomenon. The payroll protection program might not have been the right tool for the job, but simply giving out extra unemployment might not have been the right move either. We did both while giving little thought to the consequences.

When demand for spas return, someone will open a spa and hire them.

 

[pcgeek11]

Her or the employees? She wants them to miss out on unemployment benefits so she can get free government money to pay rent.

I see it the other way. The employees want that free government money and are short sighted. She is trying to save her business and provide them a job to go back too.
Unemployement isn't forever.

 

[senseamp]

I see it the other way. The employees want that free government money and are short sighted. She is trying to save her business and provide them a job to go back too.
Unemployement isn't forever.

Neither is PPP. They'll just get canned later anyways.

 

[pcgeek11]

They'll just get canned later anyways.

How do you know this?

 

[senseamp]

How do you know this?

Business is going to be light for a year or more.
When PPPorkulus runs out, she'll can them. She just needs to keep them on payroll till September to get loan forgiven. After that they'll get the boot

 

[pcgeek11]

Business is going to be light for a year or more.
When PPPorkulus runs out, she'll can them. She just needs to keep them on payroll till September to get loan forgiven. After that they'll get the boot

OK, so you're making a guess.

 

[IronWing]

Moral hazard arguments concerning unemployment benefits in the middle of an unemployment crisis where society is better off if folks don't work displays an amazing level of tone deafness. This is on the level of Author Laffer's recent interview.