How often have you heard and dismissed the phrase “time is money” as an old cliché? But, if you really give it thought, it makes a lot of sense. If you hire a person to, for example, rake and weed your lawn, the cost includes that person’s labor as well as the supplies that he needs. If you order a meal in a restaurant, the cost covers not only the food but also the time that it took to prepare that meal. Labor translates to time or man-hours worked. Understanding that, let’s take a look at the average paycheck.
After a week of work, an hourly employee receives a check for hours that he or she put in on the job. A salaried employee is paid for his or her time as well, but the actually hourly compensation may vary from pay period to pay period. A closer look at that paycheck reveals that the gross sum is larger than the net (take-home pay). The difference between the two figures represent governmental deductions:
1. Federal tax
2 State tax
3. Local tax
4. Union Dues (if applicable)
Add up all the deductions and divide the total by the hourly rate of pay. The resulting figure illustrates how many hours were worked to pay those deductions. For example:
$10.00/hour x 40 hours = $400
Total Deductions = $80
400 divided by 80 is 5.
That makes 5 hours worked by an employee just to satisfy Uncle Sam.
And now we get down to the nitty-gritty of a union worker’s check. Let’s say that you are a union laborer, working a three-day holiday weekend (i.e., Memorial Day). You might receive:
1. Time and a half for Saturday (equating to 12 hours of pay)
2. Double time for Sunday (equating to 16 hours of pay)
3. Double time and a half for Monday (the actual holiday, equating to 20 hours of pay).
Total up those hours and you’ll see that you would have been paid for 48 hours worked. In addition to your 40 regular hours worked the rest of the week, you’d have racked up grand total of 88 hours in the shop for which you are to be paid. At $10.00 an hour, your gross pay would have been $880 for that week.
As you review your big fat paycheck, reality slaps you upside the head. Your gross pay did increase, but it increased along with your deductions, the latter of which are based upon percentages. When $80 was deducted from $400, as shown above, it accounted for 20% of the paycheck. But 20% of $880 is $176.00. At $10.00 an hour, that turns out to be 17.6 hours worked solely to pay those taxes.
As they say in Denmark, “Aw shucks!” Your wife and kids were ticked off because you weren’t there to barbeque or picnic or go to the beach with them on the long holiday weekend. And you were ticked because you got shortchanged, literally. But, the good ol’ boys in government had a blast with your hard-earned money and never missed a beat enjoying the fruits of your blood, sweat, and tears!
You were screwed by percentages and not just as you perused that dwindled paycheck. By April 15th of the following year, you will have spent many hours trying to recover your wages from the IRS (Internal Revenue Service), or as I like to think of this agency, The Income Removal Service.
To add insult to injury, think about this. If you did not work that holiday weekend, you would have had three days off to relax with your family and enjoy life, instead of being tied to your job. And, the extra money that you did not remit to the government would have been time well spent!