Overtime
I’ve been putting in ma-a-a-a-ad hours at work. I mean like 14-hour days. Tired and hungry, I’ve been driving home and contemplating about the regular vs. overtime pay, as well as salary vs. hourly wages.
I also noticed that my salaried co-workers have been putting in exact same hours I’ve been. Benefits aside (everyone’s are crappy anyway), I started to wonder about the best work arrangements for getting paid on an hourly basis vs. on salary basis.
Let’s say you make x dollars per hour. Your gross weekly take is 40x, and if you work all year, your take-home is 40x times 50 = 2,000x. Suppose you stay at work for just one hour later (or come in one hour earlier). Given the standard overtime conpensation of 1.5x, your weekly take goes up to 47.5x, an increase of 19% for just 13% of extra work.
If you work for one year with putting in that one extra hour a day, you’ll end up making 47.5x times 50 = 2,375x, and increase of … you guessed it … 19%. If your x is $15, that’s $30,000 vs. $35,625 per year.
However, I’ve been averaging 11-hour days (yep, the “come at seven, leave at six” routine). Each week, instead of 40x, it’s 62.5x – an increase of 56% for 38% of extra work. Annually, the regular-time 2,000x becomes the over-time 3,125x. At the same hypothetical $15/hr, it’s $30,000 vs. $46,875. If you consider the IT industry average of $25/hr, the numbers go up to $50,000 vs. $78,125.
Therefore, the salaried co-workers should receive almost $30,000 more per year in benefits, incentives, profit-sharing, etc. In reality, all they receive is a crappy healthcare plan and a crappy 401k contribution plan, along with the crappy requirement to stay at work as long (or longer) that the houry workers because of some “company above all” schpiel pushed on them by middle management.
In return for the ass-busing labor, the salary guys get … stability? … a fancy badge? … a parking spot? Please.
So you see, sometimes it’s much cooler (and more lucrative) to be a clock-puncher.
There are 52 weeks in a year… SO the difference would be even greater.
Comment by Lawrence — September 28, 2006 @ 9:28 pm
How To Be Poor,
I’ll never forget my first job. I worked as a farm-hand on a blueberry farm. Those were the longest days in the history of my life. Talk about “watching the clock”! I think that every salaried employee should figure their hourly wage, so that they can get a good understanding of how much or how little they are making.
Your blog is green (but not as green as mine),
NCN
This comment is part of my 100 Comments Series.
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