Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Of course there would be. A decent deilvery man can do at least 4 pizzas an hour if not more. That would be $2.50 to $3 per pizza to deliver it. And since tips can be assumed of at least $2 or so, you can see where the pizza man can bring in $16 an hour which should pay for wages, gas and the use of his cellphone plus a few bucks left over for profit for the business which is already making a good profit on the pizza itself.
Ah, but you're assuming the business is making a good profit on the pizza. I wouldn't be so quick to make that assumption. There's a lot of cost that goes into the pizza - it's not a high-margin business from what I understand. A few of the costs (I'm probably missing a few):
Products (even if purchased wholesale)
Rent/mortgage/property taxes/insurance
Occasional oven and equipment repair
Enormous amounts of energy to cook pizzas all day (and keep products cool)
Wage for pizza maker
Wage for driver
Expenses for car
Boxes for the pizza
Cleaning supplies for the business
Also, you can't assume that the pizza business is busy all the time. I'd venture to guess there's quite a bit of downtime.
After all these expenses, the owner still has to take home a profit to feed his family (after state and federal taxes), which, quite honestly, isn't going to be much. Even the high volume guys who own lots of Pizza Hut franchises probably do pretty modestly.
It's very easy to say that the minimum wage should be such and such, but for low-margin businesses, it's a simple fact that a higher minimum wage would mean no business - which would mean no job at all and no pizza for the customer. So, in the end, politicians who have no understanding of economics whatsoever (98% of politicians both Democrat and Republican) can feel good about legislating in the supposed interests of the worker, except that with this legislation there are few businesses to impact.
Bottom line is no matter how hard you try, you can not legislate people's money problems away. The amount of money in the economy and people's purchasing power is a direct function of productivity. You cannot legislate productivity. The best the government can do is to avoid stifling productivity as much as possible.
I don't even understand *why* these debates about minimum wage come up many times. Statistically, the majority of people on minimum wage are often teenagers, 1st time employees, or people that have not worked in a number of years and are just reentering the work world. Minimum wage jobs are NOT intended to be permanent jobs and the majority of people eventually either earn a pay raise or leave for jobs that pay more for their experience. My first job was $5.15/hour. Now, years later and several jobs later also, I can walk into just about any job for $10/hour, and I'm still working on finishing my degree. People pay me more because the jobs I do require someone with more experience (and I'm far more INexperienced than many people out there).
And really, with all due respect, how hard is it to deliver a pizza? Please explain to me *what* skill the pizza company is paying their delivery employees for? If it's the ability to drive, well, that skill is widely available (thus no need for competitive salary). And please tell me why a 16 or 17 yr old needs to be paid something like $10/hr? It's unnecessary.
And people seem to forget..the higher the minimum wage they demand, the higher our cost of living is going to be, because a business isn't just going to eat the loss of paying an employee more. Those people are digging their own grave here.
You accept a minimum wage job in order to gain experience. If you don't like earning minimum wage, you then search for another job that will offer you more after you've advanced in your current position. If you're valuable enough to a company they'll offer you a pay raise. If not, find a company that does value your new experience more. It's called working your way up. People aren't allowed to just start out at the top. Sorry libs...not everyone is born "equal."
I think we need to rememebr that most minimum wage jobs satrted out as parttime jobs for teenagers.that is what minimum wages was set for not adults. They were kind of unskilled just starting out out jobs.One reason many teens can't get jobs now is that some adults seem to thnik they can make a real living wage from them.I have a neighbor whose son delivers pizza this summer and he said he makes alot more tips than minimum wages per hour.
For the vast majority of Drivers, 16/hour is unrealistic. From my experience, the average wage including tips is 8-12/hour. Most drivers work 2-3 hour per day and the full time drivers earn less then 10/hour because there is alot of time folding boxes and cleaning. I think that for the majority of the day, the business losses money because it just is not busy enough. The shop only make money for a few hours 5-9pm. I dilevered pizza while in college and after my primary job.
I used to work for Pizza Hut, drove a few pizzas every now and then. Driving a couple hundred miles a day you're looking at $100+ in wear and tear, gas, oil, etc. according to the Government. That would essentially erase the tips you receive. Most people tip $1-$2.
I used to work for Pizza Hut, drove a few pizzas every now and then. Driving a couple hundred miles a day you're looking at $100+ in wear and tear, gas, oil, etc. according to the Government. That would essentially erase the tips you receive. Most people tip $1-$2.
I think this is exactly the argument in the lawsuit. That if you discount "business expenses" that are not reimbursed by the employer, the "real wage" is less than that of minimum wage. The IRS allows for 55 cents a mile for business related auto expenses. If you figure 10 cents a minute for cell phone expenses (not really much IRS guidance here that I could find at least quickly) - but let's assume each delivery requires 20 cents in cell phone related costs.
The minimum wage is $7.25 and say you pay a delivery driver $8.50 an hour plus tips. Let's say each delivery is 6 miles round trip and then incurs 20 cents a in cell phone related expenses. 6 * .55 + .2 = $3.50 in non-reimbursed business expenses PER delivery. Say the driver averages $2 in tips per delivery (which is probably high). That means the employee is net -$1.50 in expenses for each delivery. If they deliver 5 pizzas per hour that is -$7.50 in net expenses. OK let's say if they deliver 5 pizzas per hour they are able to successfully reduce their average round trip to 4 miles per delivery. That is still $2.30 in incurred expenses minus $2.00 tip for -$.30 cents net. If you subtract that from $8.50 base salary that's $7.00 or below the federal minimum wage...this is with assumptions that are quite friendly to the pizza companies. I am also assuming a base wage that is much higher than the federal minimum wage ($8.50 an hour). In a lot of more rural or suburban areas drivers may travel 5 miles or more each way because it's so fast to travel and there is no traffic. Also if the drivers are only being paid $7.50 an hour then that slants my argument even more against the pizza companies.
My point is this lawsuit really isn't ridiculous at all IMO and just because they are teenagers or college students or young people doesn't disqualify them from a fair wage under federal or state law, and shouldn't allow employees to incur large amounts of business expenses under their own dime that their employer doesn't reimburse. If it means you have to pay 50 cents a more for a pizza, too freaking bad IMO, then drive your own car to pick up a pizza if you don't want to adequately compensate someone else for the expenses in driving theirs to your home.
Could you explain to me though why a teenager *needs* to be earning $10+/hour when not only do they provide limited skills, but their own bills are typically limited because most are living w/ parents still? In fact, oftentimes, the people that are on minimum wage are there because they have little or no skills and *cost* a business a large amount of money to train. By a business taking on an unskilled/underskilled worker, they are taking on a HUGE risk. They risk that by putting money into that employee for things like training, that that employee will only soon leave to find better pay somewhere else because the next business doesn't have to invest as much to train them. This is just a single example of the cost of hiring the type of people that typically apply for those minimum wage jobs.
Why should someone that has little or no work experience be paid nearly the same as someone that's worked for 10 years and added to their list of skills and knowledge every year, thus making them *more* valuable as an employee?
They don't need to be earning $10 an hour, they need to be earning $7.25, which is the federally mandated wage. If you are earning $20 an hour but are incurring $15 an hour in unreimbursed business expenses, then you are earning less than minimum wage. Make no mistake about it, when a delivery driver "tells" you how much money they are "making" it is basically a "revenue" number and not a "revenue minus expenses" number, which is how they should be reporting it. They just don't even take into consideration car related expenses - drivers will pay a much higher insurance number, pay for their own gas, and wear and tear on their vehicle.
I run my own business. If I make $200,000 in revenue I didn't really make $200k. The real profit for my business is netting out all the expenses required to make $200k. If I incur $100k in expenses to make that $200k my business profit is $100k.
Teenagers have a right to a federally mandated minimum wage and just because they don't have the business experience or knowledge to properly calculate their "real wage" does not mean they have a right to be compensated for less than the federally mandated minimum wage.
I'm not saying they should be under-compensated. Though there's a small part of me that feels they should be taught at an early age how to itemize if they're going to take a job that requires expenses out of the norm of a typical minimum wage paying job....but that's also the hazards of taking certain jobs, and people should be aware of this when they take the job. If they don't like it they should take another job then. There are many more jobs out there that don't have the same expenses that places like Pizza Hut do. And if Pizza Hut loses all their drivers because people think the wages are unfair, eventually those places will naturally have to increase the pay. It's supply and demand.
I'm aware of business expenses. I've worked in finance for 5 years now and ran 3 different small businesses of my own. A business owner actualizes very little of their business revenue as a cost. They shouldn't be making less though than their employees. But there is a HUGE difference between being a business owner and an employee.
I just feel that people need to stop being so sue happy over things like minimum wage because all they're doing is driving up the cost of living...which encourages more people to press for yet another increase in wages. It's a perpetual cycle and it really needs to stop somewhere. If someone is genuinely being treated unfairly with wages then yes, I agree there is cause for concern, but most of these cases I see come up are frivolous or have a plethora of ridiculous complaints attached.
If you really have ran your own business then you should understand that itemizing is almost certainly not an option for a teenage or college aged pizza delivery driver because they will almost never incur expenses in excess of the standard deduction.
Perhaps you are right that people may realize this and not want to do these jobs. But that's not really the point. The law is the law. Don't get me wrong the part about washing clothes is ridiculous and the cell phone thing could even be perceived as a stretch. But the miles thing is not. It's very clear about the mileage expenses. Very, very cut and dry IMO.
I actually don't see how this lawsuit is ridiculous at all. Perhaps you could explain it to me. At first I thought it was but then I actually ran the numbers involved and it changed my mind.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
