Thursday, July 24, 2008

Letter to the Editor: Lakewood Salaries and Employment Economics

I know that when I fall into a bit of a blogging funk, I can always count on the Yated to print something interesting. This week is no different.

Here's a letter to the editor titled "What A Joke." Any spelling errors or typos are my own.

Dear Editor,

I must say that the salaries that women receive in the city where I live - Lakewood, New Jersey - are pitiful. It is a disgrace that they get little more than $10 an hour. I am not sure what the situation is like in other places such as Brooklyn, Monsey and the Five Towns, but in this city, where so many upstanding people are struggling financially, it is simply disgraceful that our wives can't find jobs that pay decently.

Some people now highly regret that their wives, when they were single, didn't get some sort of degree to enable them to get jobs that pay decently. I don't want to get into a whole discussion about whether a girl should or shouldn't get a degree, because that really isn't the point here. The point is that, in a city where the concept of "hashkafaToraso umnaso" can be applied to so many people, the fact that wives can't earn a half-decent salary to keep their families afloat is a serious problem that has not been discussed sufficiently. In most cases, even where the husband is the primary breadwinner, the family needs the mother to earn a decent salary to help cover ever-growing expenses.

In Lakewood, apparently, $10 an hour is supposed to cut it.

$10 an hour is what you give the guy off the street who you hire to clean your backyard.

$10 an hour is what you give Maria, your cleaning lady, for scrubbing your floors.

Because of the large number of young (and not-so-young) married wives who need jobs, storeowners and business owners can - and do - dictate how much they will pay their employees. And let me tell you, they are taking full advantage of the situtation. I know of two companies that are seriously contemplating moving to Lakewood for one reason only - cheap labor.

Not Mexican cheap labor.

The cheap labor of our neshei chayil, who can be hired for "bubkis."

It's a shandeh.

Eli Parkowitz

Here's my response:

Dear Mr. Parkowitz,

I can certainly understand the frustration that you and other people in the Lakewood community are going through in your efforts to raise your families. Gas prices have shot through the roof, food prices are up, and it seems that even the basic necessities are now more expensive than they've ever been. While this is certainly true in most places, it must be impacting the Lakewood communtiy all the more, considering how many of the residents are involved in full-time Torah study. I wish you and all the Lakewood families much hatzlacha in being able to support your families.

Now then, however, I do feel that there are several things that need to be pointed out about your letter. You don't state in your letter what type of work the wives in Lakewood are looking for, but my guess is that it is largely unskilled labor. The wages for unskilled workers will, of course, usually be lower than that of skilled workers. I highly doubt the doctors, medical technicians and computer programmers in Lakewood are earning only $10 an hour.

You have to understand that companies do not exist in a vacuum. Companies that employ workers usually have to compete with other companies who provide similar or identical products or services. In order for a company to exist, it must remain competative with others in their field. If I produce widgets at $10 each and my competitor comes along and is able to produce them at $8 each, I will have to do one of two things -- a. find a way to produce my widgets at a similar cost or b. go out of the widget business.

As such, if the women in Lakewood earn $10 an hour, it is because that is what the market will bear. Employers have to find people that will do the job properly at the lowest cost. If I need a secretary (a common example of an unskilled laborer) I will find one that can do the job at the lowest cost. If your wife doesn't want to work for $10 an hour, but I know that there are ten other candidates who will, then there is no reason for me to hire your wife.

In short, if I'm paying $10 an hour for a secretary, it is because of the following two reasons:

1. There are enough candidates who are capable of and willing to do the job properly for $10 an hour.

2. If I only offered $9 an hour, the candidate pool would shrink to the point where it would be too difficult to find someone who can or will do the job properly.

Now, don't get me wrong, I'd love to hire your wife at $20 an hour and help support your Torah lifestyle. But (and forgive me for saying so) the marketplace doesn't care about your Torah lifestyle. My competitors (many of whom are not Jewish) don't care about your Torah lifestyle either. They're not going to raise thier prices to match mine because I have the extra cost of hiring a Lakewood wife. Since they're not going to raise their prices, I can't afford to pay extra to hire your wife. To do so would make my company uncompetative.

Now then, is there any solution? Of course there is. While we all recognize that our parnassah comes from HaKadosh Baruch Hu, we also all recognize the fact that we have to put in the proper hishtadlus. And that doesn't just mean showing up in the morning, doing the job and going home in the evening. It goes far beyond that.

You write in your letter that you don't want to get into a whole hashkafa debate about whether or not a girl should get a degree. But, in reality, this isn't about degrees... it's about job skills. If your wife (or anyone else, for that matter) has a valuable skill that they can bring to the marketplace, then they can command a higher salaray. The general rule is that the rarer the skill (and the more in demand that it is), then the higher the salary the person can command. In many cases this means a college degree, but it does not necessarily have to be so. Allow me to give you an example:

When I started out in the workforce, I was earning only $10 an hour. I was young and newly-married. While I had some skill at using computers, it wasn't anything terribly specialized. I knew how to use WordPerfect, Lotus 1-2-3 (am I dating myself?) and some other basic computer programs. In short, while I had some marginal computer skills that placed me higher than a "shlub off the street," I was still certainly in the category of unskilled labor. As such, I earned a meager salary for a few years.

It was only later on that I began to realize that if I wanted to earn a higher salary, I would have to make myself more desirable to employers. So, I went out and learned some computer skills that are more uncommon. I went to an adult education center and, for the next year, took eight courses in computers covering programming and databases. As a result, because I invested in my human capital, my value in the market place went up and I was able to command a much higher salary.

Human capital is basically what you have if you were dropped off on a street corner with nothing more than the clothes on your back. Just to give you an example (albeit an extreme one), consider what would happen if two people were put in that situation. Let's suppose that Bill Gates and I were both stripped of all our possessions. He loses his billions, his mansion, his Microsoft stock -- everything. Me -- well, I lose my house, whatever savings I have in the bank, my 401(k), etc. We're both dropped off on a street corner with nothing more than the clothing we're wearing. Which one of us will be better able to provide for our families? The answer is Bill Gates, because he has more human capital than I do. He has skills and contacts that I don't have. He has years of experience in running a multi-billion dollar corporation. I don't. The combination of skills, contacts, experience that he has is worth far, far more on the labor market than mine. As a result, he will (in all likelihood) find a job faster than I and earn a higher salary than I.

The best way to improve your earnings for the long term is to invest in your own human capital. Tell your wife to go out and learn a skill that will make her more valuable to employers in the Lakewood area. That's the *best* way to ensure that she will be able to command a higher salary. Is it a quick fix? No, of course not. It takes time and money. It took me over $5,000 and a year to take the computer courses I mentioned above. It was very difficult -- my family had to make significant sacrifices for me to be able to scrape together the money for those courses. However, with the higher salary I was able to command when I finished, I earned the money back within a year. I'm now further investing in my human capital in two ways: a. I'm always looking to improve my skills at a database administrator/programmer and b. I'm going back to school for an advanced degree. You can rarely go wrong by investing in your human capital.

If you want your wife to earn more than "bubkis" then she has to be able to bring valuable skills to her employers. However, if she is indistinguishable (in a professional sense) from thousands of other women in Lakewood, then no employer can pay her more. She has to work on setting herself apart from the crowd. There's a reason that Maria only earns $10 an hour -- because anyone can learn very quickly how to scrub floors. Likewise, almost anyone can learn very easily how to answer phones. It's only when the skills become rarer and more valuable that the salaries start to rise.

Wishing you much hatzlacha,

The Wolf

21 comments:

Anonymous said...

Great response!
You said it all!

Anonymous said...

Well said.
One solution you left out: less Kollel families = less Kollel wives -> higher salaries for those remaining.

Ahavah said...

Wolf, I agree over all with your premise and your response.

But "tell your wife to go out and learn a skill" is extremely unrealistic for these families. The babies are already in daycare 8, 10, or 12 hours a day. As you pointed out, the training costs money they already don't have. And out here in real life economic land, a woman who has children is NEVER going to be able to earn as much as a man in the same positions, because there will always be pregnancies, hospital stays, sick children, etc. which will cut into her hours. These are married women who live like widows, having to be mother and father and sole breadwinner for their families because their husbands are busy "learning."

If this guy is REALLY interested in having his family not be on welfare and charity, he's going to have to step up to the plate and either get some real job training himself for a full-time market rate job, or at least do some make-work job in her place while she receives training. And neither of those things is going to happen - and he knew that when he wrote the letter. His only "solution" is to gripe that his lowly wife can't earn a CEOs salary so he can "learn" in style.

As far as I'm concerned, he made his bed and now he should get to lie in it. This entire mess is his fault - a man is responsible for the welfare of his family. Nobody owes an adult a living - only children and the sick and extremely old are entitled to care from other adults. He chose to remain a child, cared for by the labour of others. When he decides to be an adult and earn his way, then he can gripe.

A man who doesn't teach his son a trade teaches him to steal - or in this case, to beg for welfare and charity and sell his wife into servitude for slave wages.

BrooklynWolf said...

But "tell your wife to go out and learn a skill" is extremely unrealistic for these families.

I don't know that it is as unrealistic as it sounds.

When I first started going for the courses I mentioned in my post, I had to have Eeee's "buy in" for the project. I couldn't do it unilaterally. The reason is because the courses were taught at night, after a full day's work. It would mean that she would have to pick up some of the extra slack and work extra hard -- because I wouldn't be home during the 6-9 PM hours. She would have to run the household by herself. She was willing to make this sacrifice for our financial future.

Here too, the husband would have to do his share as well. It might mean missing night seder while his wife goes and takes courses. So be it. It might even mean missing an afternoon or two a week. Whatever it takes, he has to do his part too. I certainly didn't mean that he should tell his wife "go earn a skill" while he does nothing more than he's doing now.

I believe that if both partners are committed to the goal (and especially, if they have relatives who can help out with babysitting, etc.) then there is a far better shot of working out the details.

The Wolf

G said...

Officially requesting permission to send in your post as a letter to the editor signed in whatever fashion you deem appropriate.

For real.

concernedjewgirl said...

Nice response.
Except...
1. My Maria makes $16/hour
2. You can't teach everyone to wash floors WELL!!!
3. Not everyone answers phones well either. You do have to have skill. Not only that, usually the office manager really RUNS the whole office, they are truly overworked and underpaid. With that said, it is true if you have a skill that distinguishes you from the rest of the crowed then you will get the job, not necessarily making more money at it.
4. It seems that a nice majority...not ALL, but the majority of Kollel people want to live in two worlds but with one mentality! They want to live well, with luxuries, and nice salaries. BUT, they don't want to work, their wife's (in most cases) do not have education beyond high school and they have large families. All of those things don't necessarily complement each other.

Anonymous said...

I hear there's a move in Lakewood and B'nai Brak to do away with Rabbenu Gershom's takana...It's just too hard nowadays to make a living on one wife's salary!

G said...

ah, ah, ah...not so fast my friend.

Economies of scale may now work as well as you think in this case, you are forgetting about increased cost due to the additional children which will probably leave one right back where they started.

--i know, i know, i just killed a perfectly good joke by taking it too far

Critically Observant Jew said...

to CJG:

1. Your Maria doesn't live in Lakewood, where prices are different.
2. Agree. Though more people can learn to do floors well than to be a good computer programmer
3. About being underpaid: again, this is what market desires. Supply and demand.
4. Agree.

ProfK said...

A wonderful job with your answer Wolf and G is right, it should go to the paper (although I'm not betting about their publishing it precisely because it is so well thought out and logical).

As to "Maria's" salary--that too is dependent on other factors, location being one of them. Concernedjewgirls cleaning help makes more than mine and my sister's makes considerably less

What the letter writer failed to take into consideration is that $10 an hour for unskilled labor is high, not low. Plenty of those who make less--minimum wage.

I think we also shouldn't mix up secretaries with people who answer telephones. Trained secretaries need to know how to use computers well, need to be skilled in word processing and need to be skilled with people. They need to know how to juggle a number of projects all at the same time while not "dropping any balls." They also need to be savvy about the industry/business they are working in. There are far fewer secretaries today then there were 20 years ago, and those who are good at what they do make a lot more than $10 an hour. And if they specialize, their salaries are enviable. An experienced legal or medical secretary can write her own ticket. It is receptionists who generally make the lower salaries, because the skills required are few.

Anonymous said...

I have had unskilled secretaries who made minimum wage, but skilled ones make a lot more than $10.00/hr, and are well worth it.

Anonymous said...

By the way, the idea that ones salary should be set by the lifestyle one desires rather than by supply and demand in the market for the work one does extends far beyond Lakewood. it is pretty popular among liberal politicians.

Ahavah said...

My apologies, Wolf. This is a sore spot with me and I mistook your position in that last paragraph.

Moshe Klass said...

I didn't notice the line that said "Here is my response" and I was shocked that the Yated came up with this kind of answer. LOL

Excellent response as usual.

Commenter Abbi said...

Wait you didn't address this issue: If they can barely make ends meet, why the heck do they have anybody off the street cleaning their backyard or or their houses for even $10/hr?!

For heaven's sake, if they have the 8-10 kids, at least they can put the older ones to work around the house. (you can't have 8-10 under 5, unless you had insane infertility treatments) Wasn't that the whole purpose of large families to begin with in agrarian times?

Other than that, your response was spot on, Wolf, as well as your response to Ahava. What's saddest about this letter is how the writer doesn't see any other way- it's the community's responsibility to pick up the tab. A shandeh, indeed.

Lawstudent said...

I'm amazed that no one took offense at the overt racism in this letter! Apparently, because your wife is ...married? white? not Mexican? Jewish? she is inherently worth a higher pay? "The guy off the street," may be married, he may be Jewish, he may be not Mexican, but he deserves only $10 an hour for cleaning your back yard? But that's hard work. I've answered many phones while in possession of my college degree for less than $10 an hour. There is no chance that I would choose to clean a stranger's backyard for $10 an hour unless it was an extreme situation. Manual labor, including cleaning, is much more difficult than most secretarial positions.

The author does not object to, in fact, even supports, Mexican cheap labor despite the fact that these people have children and husbands. Until he understands that the economy doesn't care about your religion, nor should it, I predict he will continue being confused about why his wife won't be paid more than $10 for her unskilled, labor.

BrooklynWolf said...

Abbi,

To be fair, I don't think the letter writer said that his wife (or even the wife of anyone he knows) has a $10/hour maid. That may be just the going rate in the area and he feels that the Lakewood wives deserve more. He doesn't actually say that he's paying $10/hour.

The Wolf

BrooklynWolf said...

Lawstudent,

Actually, when I first saw the article, *that* was going to be the thrust of my post. But I decided to change it to the economic aspect when I changed my post from a "rant about the person" post to a "respond nicely to the person" post.

The Wolf

Anonymous said...

I would clean a backyard for $10 an hour! That's not a bad rate, plus you get exercise, fresh air, and the satisfaction of a job well done. Beats being a secretary at $10 an hour any day. And since when are secretaries going for $10 an hour? When I was a secretary, I was glad to get a $10/hour job... everyone else was offering $9 and that was in Flatbush.

That said, from what I hear from a friend in Lakewood, it's more supply and demand than skill set. She says there's no point in being an accountant in Lakewood because there are so many, they just fire them when they get too expensive and hire youngsters. So it is definitely important to have a skill that is not common.

That also being said, she says babysitting in Lakewood is the best job: no shortage of work, and a relatively high salary. Supply and demand all over again.

My recommendation: these women should become engineers. It only requires a 4 year degree and NJ is crammed chock full of industry requiring engineers. It pays far better than $10 an hour, too. ;-)

Anonymous said...

But "tell your wife to go out and learn a skill" is extremely unrealistic for these families. The babies are already in daycare 8, 10, or 12 hours a day. As you pointed out, the training costs money they already don't have. And out here in real life economic land, a woman who has children is NEVER going to be able to earn as much as a man in the same positions, because there will always be pregnancies, hospital stays, sick children, etc. which will cut into her hours. These are married women who live like widows, having to be mother and father and sole breadwinner for their families because their husbands are busy "learning."

I agree with you that the husband needs to "man up" and get a job. However, I dispute your assumption that the children are in daycare for 12 hours. Many Lakewood mothers work part-time so they are home when their kids get home from school. Few work a full 9-5 day. Maybe if they did they would get paid more?

Anonymous said...

Are there no prisons?
Are there no workhouses?