Does that make sense to pay $12/hr for a cashier?

Archived From: Finance
  • Text Only
Voting History
rated:
I live in Houston, TX where cost of living is extremely low. Yesterday, I was shopping at ALDI and I saw the sign on the window about hiring cashiers and it says right on the flyer, $12/hr starting salary.

Now, if this was happening in San Fransisco, I would understand, but why would any company pay so much higher than the minimum wage for a cashier?

So I asked the cashier who happens to be the manager. Here is the conversation

Are you really paying $12/hr to new cashiers?

Yes sir

But you know the minimum wage is $7.53/hr, I am just surprised

Well, we started with $9/hr which is what WalMart is paying but people did not stay long with that salary. They quit in couple of months
What is wrong with that?
Oh, you won't believe how much time effort energy money we spend to train
I see, well then what did you do?
So we increased the starting salary to $10/hr
And?
It did not help so we increased and increased incrementally to $12/hr so far so good
So nobody is leaving
Well, not yet
-----------------------------------------------
What is going on here? $12/hr means $24K/year salary. An engineer right out of college makes $60K around here. I have seen college grads making 30K/year but I am not gonna touch on that for now.

Something is really screwed up with the labor market. And now we will be deporting millions of illegals, so what will happen then?
Cashiers will be making same as engineers? Crazy

Member Summary
Most Recent Posts
If this proves anything, it's that minimum wage is completely unnecessary...

goku2 (Mar. 18, 2017 @ 9:56p) |

It has been about a dozen years since I've been in an Aldi.  It was a great store -- I just don't live close enough to o... (more)

Endeavorer (Mar. 18, 2017 @ 11:28p) |

Believe me when I say Aldi put a lot of time and resources into figuring out what level pay will get them their best inv... (more)

InFlamed (Mar. 19, 2017 @ 9:21p) |

Staff Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

A question you should have asked the ALDI manager is, after they quit, where did they go? Bum around at home (parents house)? Or get a job elsewhere?
And now we will be deporting millions of illegals, so what will happen then?
America will be great again. #MAGA

You're saying $24k a year is too high, but can a person in Houston pay rent, food, health insurance, living expenses etc on $24k? Logically, no job should be able to pay less than the wage necessary to pay living expenses, because no one would be able to afford to stay at that job, unless they expect to hire only kids/students/illegals.

I used to think like you.  As I get older I would much rather have the store pay employees more and keep some stability in the store.  This really helps with MS type activities.  You don't know how annoying it is to swipe seven gift cards in a transaction and have the cashier start giving me an attitude just because they have never seen it before.  CVS are you listening? 

The gap in your logic is that these employees won't be getting $12hr * 40 * 52 - they'll be part time, most likely without benefits, vacation, etc, and the $12/hr is probably close to the top end of what they'll get during their time there.

I'm against minimum wage creep as much as the next guy, but I can't argue with their logic here - they get better employees for a small amount additional, they probably show up on time, bother to get reliable transportation instead of just saying "F-it" when their car doesn't start (because its only $9/hr.. I could make that at WalMart!)   Cashiers are also literally the last face you see on your way out of the business - the wrong person there could lose customers, be slow, not scan things, all sorts of potential for failure of a minimum wage employee.
 

Aldi's stores typically maintain a relatively low number of active employees compared to other stores like a WalMart. This makes turnover a much harder problem than stores that have twice or three times the work force. Those stores can just move people around to cover turnover in employees. Pay attention next time you are inside a Aldi's they typically have less than 5 people working at any given time, and a lot of times you will only see 3.

For their business model of keeping a low head count, it would make sense they want to keep as low of a turn over margin as possible. Its highly likely they have to pay overtime to employees when someone quits, and they are forced to train a new worker. Some accountant has taken into account the cost to train a new employee and has determined its more cost effective to pay employees well to limit turnover. Aldi's might look like a small mom and pop shop, but they are a very smartly ran organization and I am sure have the financial data to back up the wages they pay.

I don't know about your ALDI, but they seem to have a broad definition about what a cashier is in my store. I see the "cashiers" pulling things off the truck, restocking shelves, basically doing anything/everything in the store in addition to being the cashier.

Side note about college grads. We recently hired a position in our organization that required a master's degree and the starting salary was $38,000. I thought that was crazy, but plenty of people applied. Some college degrees just aren't worth it anymore.

juliox said:   The gap in your logic is that these employees won't be getting $12hr * 40 * 52 - they'll be part time, most likely without benefits, vacation, etc, and the $12/hr is probably close to the top end of what they'll get during their time there.

 

  OTOH if they work 80 hrs a week like a lot of hard working real 'mericans do, they can make $60k a year. That should be what they are making. Same as the engineer! #MAGA

Also, if $12/hour is really to high of a wage, they wouldnt be hiring at all. The market is telling them they need to pay this amount to maintain the level of employee engagement they want for their stores. I know everyone wants the markets to decide a pay scale. Well that is exactly what is happening. The manager told you he started at $9, and increased it until the point he started getting the employees he wanted. This is the market working full force to find an equilibrium.

hairybeast said:   I don't know about your ALDI, but they seem to have a broad definition about what a cashier is in my store. I see the "cashiers" pulling things off the truck, restocking shelves, basically doing anything/everything in the store in addition to being the cashier.

Side note about college grads. We recently hired a position in our organization that required a master's degree and the starting salary was $38,000. I thought that was crazy, but plenty of people applied. Some college degrees just aren't worth it anymore.

  This is what I am talking about

Say an engineer makes $70K. But an engineer is at the top of the labor chain in terms of IQ and time energy money he spent to get this degree

The lowest is getting paid $24K and the highest is $70K? Imagine the whole labor pool and the highest is 3X the lowest

This does not make sense at all. Either engineers are getting really low or cashiers are getting too much

There are costs involved with onboarding/offboarding employees (training, overhead, etc.). and at $12/hr they're getting a better/more efficient employee who will stick around longer. As someone else mentioned, compared to other grocery stores of the same size, Aldi has MUCH fewer employees. So their in-store labor cost is pretty insignificant.

For them, the $12/hr is worth it, and $9-12/hr is the true market equilibrium for a cashier (no one is forcing them to pay these wages).

fleetwoodmac said:   
 
The lowest is getting paid $24K and the highest is $70K? Imagine the whole labor pool and the highest is 3X the lowest

This does not make sense at all. Either engineers are getting really low or cashiers are getting too much

  Why does the 3X multiplier not make sense? How do you determine what multiplier what "makes sense"?

rufflesinc said:   
juliox said:   The gap in your logic is that these employees won't be getting $12hr * 40 * 52 - they'll be part time, most likely without benefits, vacation, etc, and the $12/hr is probably close to the top end of what they'll get during their time there.

 

  OTOH if they work 80 hrs a week like a lot of hard working real 'mericans do, they can make $60k a year. That should be what they are making. Same as the engineer! #MAGA
 

  If an engineer is only earning $60k/yr and doing 80 hrs/wk, they are getting screwed badly.

fleetwoodmac said:   
hairybeast said:   I don't know about your ALDI, but they seem to have a broad definition about what a cashier is in my store. I see the "cashiers" pulling things off the truck, restocking shelves, basically doing anything/everything in the store in addition to being the cashier.

Side note about college grads. We recently hired a position in our organization that required a master's degree and the starting salary was $38,000. I thought that was crazy, but plenty of people applied. Some college degrees just aren't worth it anymore.

  This is what I am talking about

Say an engineer makes $70K. But an engineer is at the top of the labor chain in terms of IQ and time energy money he spent to get this degree

The lowest is getting paid $24K and the highest is $70K? Imagine the whole labor pool and the highest is 3X the lowest

This does not make sense at all. Either engineers are getting really low or cashiers are getting too much

  I think the difference is the potential to earn more is available to the engineer.  They might start out at 70K (I assume and average, so you could have some starting right above the cashier and others starting over the average), but in 5 years they could be making $100k while the cashier is making $25k. 

Also, engineers will eventually be in the same boat as other degrees if they continue to churn out more and more graduates which will expand the pool of applicants and eventually lower salary.  Working in engineering higher education, you can see the pressure to increase enrollment and graduate more students which could eventually result in lower salaries for everyone. 

fleetwoodmac said:   What is going on here? $12/hr means $24K/year salary. An engineer right out of college makes $60K around here.
 

looks like you're low:

http://www.payscale.com/research/US/Job=Mechanical_Engineer/Sala...

civil is lower, of course...but the average for all disciplines is likely above 70k. also, did you really create a thread to complain about a $12/hr cashier job being excessive? Are you one of those that never adjusts their prices from when they were young?

fleetwoodmac said:   Say an engineer makes $70K. But an engineer is at the top of the labor chain in terms of IQ and time energy money he spent to get this degree
 

huh??? engineers are not at the top end of that scale. doctors, lawyers, etc.

the only way an engineering degree is [perhaps] superlative is in short-term salary efficiency, when acquired from a state school. not many other ways to make 70k out the gate after 4 years of college doing a "normal" job.

$12/hr in San Francisco gets you living in your van down by the river.

I live in Houston -- yeah it's low cost of living -- but $12 is not much here if you don't want to live an hour or more outside of the city. OP, how much do you make?

Also consider that the store knows the quality of employees they get for various wages.  They want good people that will make the store a friendly place... you don't get that for minimum wage.  I work in a moderately skilled profession, and I can't hire really good people for less $75k -- and while I like them to be degreed, if they have experience I'll waive it.

mattun said:   $12/hr in San Francisco gets you living in your van down by the river.
  Not even. Those spots are taken by people making 6 figures. That is just straight homelessness in SF.

rufflesinc said:   
fleetwoodmac said:   
 
The lowest is getting paid $24K and the highest is $70K? Imagine the whole labor pool and the highest is 3X the lowest

This does not make sense at all. Either engineers are getting really low or cashiers are getting too much

  Why does the 3X multiplier not make sense? How do you determine what multiplier what "makes sense"?

  Not arguing that 3x does or does not make sense or that 24k and 70k are good estimates.  But 24k-70k as "3X" is an exagerration.  70k single might have 20% average income tax = $56k.  $24k will have 0% income tax (or negative due to several refundable tax credits).  So the multiplier is really roughly 2.33X between $70k and $24k.

And a starting engineer will likely have more than 40 hours of work in a "salary" position.  Less than 80, but more than 40.  You can insist to stick to a strict 40 later on (I try to.), but it will likely pull down your future pay/raises.  You won't be as "productive" or useful on imperfectly managed/planned projects as those staying till 8PM, voluntarily taking their work home every day, and coming in on weekends and holidays.

edit:20% was overestimate, looks like it's only 17% at 70k

In my field of engineering the starting pay isn't super attractive, around 60k in the mid-west. But after four-five years, and acquiring a PE, you can easily break 100k. Also its still a very competitive industry so if you are flexible in locations you can push it up higher than that pretty easily. Also I have near 100% job security as long as I do my job, and dont do something that I know is unsafe.

I dont think $12/hour is a very high wage for someone that shows up, and works for the entire shift. Even in a low cost of living area it would be hard to raise a family on $12/hour. I dont get what the issue is here. The Government isn't demanding the $12 wage, the MARKET is demanding it, which is what most government hating people want...

Bend3r said:   
 
And a starting engineer will likely have more than 40 hours of work in a "salary" position.  Less than 80, but more than 40.  You can insist to stick to a strict 40 later on, but it will likely pull down your future pay/raises.

 

  That depends on how profitable your hours outside of that engineer job is 

Houston isn't that low. The GS scale has a locality adjustment of over 30% there. There's also the question of what is considered an entry-level engineer. Fresh out of a BS, if you hold out for that around here, you'll be waiting forever. If you're competent it can reach and pass that in a few years, but you're not seeing it on day one.

Don't know why you'd say it seems too high. It means the market is working. They want more than the ability to occasionally fog a mirror, so they're paying what it takes to get it. Adam Smith's invisible hand at work.

tennis8363 said:   mattun said:   $12/hr in San Francisco gets you living in your van down by the river.
  Not even. Those spots are taken by people making 6 figures. That is just straight homelessness in SF.


Minimum wage is $13/hr here now so no one is only making $12. $14/hr starting in July.

The guy explained it to you pretty clearly. What are you not getting about it?

the world has gotta have cashiers too...

This is a change for Aldi. It is becoming more Americanized after 40 years in America. They now open on Sunday and minor holidays. A decade ago, they paid $15-17/hour as their lowest rate, but they hired no part-timers and expected you to be available anytime between 6 AM and 9 PM everyday to work those hours (except maybe Sunday).

daw4888 has the right answer here. THis is the market deciding. Aldi isn't paying "too much" because they're idiots or running a charity.

Cashiers at grocery stores are not the bottom rung of employment. There are much lower jobs with lower skill and expectation levels.

How many people have you employed for minimum wage? How good of a job did they do? Could they handle basic math? ... show up on time? Did they flake out and stop showing after 3 months? Could you trust them to not be idiots in front of customers? Did they pass drug tests and not have face tatoos?

You seem to overestimate the quality of the bottom 2% and underestimate what is required to be a cashier.

fleetwoodmac said:   
hairybeast said:   I don't know about your ALDI, but they seem to have a broad definition about what a cashier is in my store. I see the "cashiers" pulling things off the truck, restocking shelves, basically doing anything/everything in the store in addition to being the cashier.

Side note about college grads. We recently hired a position in our organization that required a master's degree and the starting salary was $38,000. I thought that was crazy, but plenty of people applied. Some college degrees just aren't worth it anymore.

  This is what I am talking about

Say an engineer makes $70K. But an engineer is at the top of the labor chain in terms of IQ and time energy money he spent to get this degree

The lowest is getting paid $24K and the highest is $70K? Imagine the whole labor pool and the highest is 3X the lowest

This does not make sense at all. Either engineers are getting really low or cashiers are getting too much

Pssst, there are people making more than $70K per year.

Throughout history, businesses have complained about increasing minimum wage, unions, having to offer benefits, worker protections, etc. Yet somehow the whole economic world hasn't collapsed.

In fact, economies that pay low- and mid-range workers more are far more healthy. Those workers turn around and circulate the money, often spending it right back at the very businesses they work at.

Not to mention that, if companies pay less than a living wage, we either need the government to subsidize those workers, or they would just quit/riot/starve. Why work all the time if you can't even keep a roof over your head & food on the table anyway?

Or we could have an economy where a few CEOs make billions of dollars, everything else is automated, most people starve, and those businesses find out they have no customers to sell their products to. After all, a CEO with 1 million times more money than a cashier does not buy 1 million iPhones.

Now in this case we're not even talking about mandating minimum wage, we're talking about a free market situation where the business has voluntarily chosen to pay more to attract higher quality workers. They've done the math and realized the turnover/training costs were higher, and they are actually MORE profitable paying their workers a living wage. Imagine that. I know it goes against a lot of "free market" jargon you may have heard.

jerosen said:   daw4888 has the right answer here. THis is the market deciding. Aldi isn't paying "too much" because they're idiots or running a charity.

Cashiers at grocery stores are not the bottom rung of employment. There are much lower jobs with lower skill and expectation levels.

How many people have you employed for minimum wage? How good of a job did they do? Could they handle basic math? ... show up on time? Did they flake out and stop showing after 3 months? Could you trust them to not be idiots in front of customers? Did they pass drug tests and not have face tatoos?

You seem to overestimate the quality of the bottom 2% and underestimate what is required to be a cashier.

  
I have to agree.  At both the Aldi's near my house the cashiers are much more competent than at the local WalMart/Grocery stores.  They work faster, and count change without looking at what the screen tells them.  I always see all the employees on the floor actually doing something, not standing around chatting, and just goofing off.  

daw4888 said:   
jerosen said:   daw4888 has the right answer here. THis is the market deciding. Aldi isn't paying "too much" because they're idiots or running a charity.

Cashiers at grocery stores are not the bottom rung of employment. There are much lower jobs with lower skill and expectation levels.

How many people have you employed for minimum wage? How good of a job did they do? Could they handle basic math? ... show up on time? Did they flake out and stop showing after 3 months? Could you trust them to not be idiots in front of customers? Did they pass drug tests and not have face tatoos?

You seem to overestimate the quality of the bottom 2% and underestimate what is required to be a cashier.

  
I have to agree.  At both the Aldi's near my house the cashiers are much more competent than at the local WalMart /Grocery stores.  They work faster, and count change without looking at what the screen tells them.  I always see all the employees on the floor actually doing something, not standing around chatting, and just goofing off.  

  exactly. they're hiring a higher caliber more efficient and productive worker.
it doesn't mean they would pay a horrible cashier (like often found in WalMart) 12 bucks an hour

Rajjeq said:   You're saying $24k a year is too high, but can a person in Houston pay rent, food, health insurance, living expenses etc on $24k? Logically, no job should be able to pay less than the wage necessary to pay living expenses, because no one would be able to afford to stay at that job, unless they expect to hire only kids/students/illegals.
  
I managed. When I had my first pc repair job, was making 11.00 hr. I owned a home, owned a car, had insurance and all the stuff. I managed fine. Yes you can make a decent living with 12hr in houston  

tantuti said:   
Rajjeq said:   You're saying $24k a year is too high, but can a person in Houston pay rent, food, health insurance, living expenses etc on $24k? Logically, no job should be able to pay less than the wage necessary to pay living expenses, because no one would be able to afford to stay at that job, unless they expect to hire only kids/students/illegals.
  
I managed. When I had my first pc repair job, was making 11.00 hr. I owned a home, owned a car, had insurance and all the stuff. I managed fine. Yes you can make a decent living with 12hr in houston  

  
If you dont want to have a family yes you can manage.  But most people with kids wont manage to live off $11/hour without some type of assistance.

Hell I lived in college off of $1000/month, including bar expenses, but I couldn't have did that if I had a kid to support.

The mistake here is thinking that capitalism is logical.

daw4888 said:   
tantuti said:   
Rajjeq said:   You're saying $24k a year is too high, but can a person in Houston pay rent, food, health insurance, living expenses etc on $24k? Logically, no job should be able to pay less than the wage necessary to pay living expenses, because no one would be able to afford to stay at that job, unless they expect to hire only kids/students/illegals.
  
I managed. When I had my first pc repair job, was making 11.00 hr. I owned a home, owned a car, had insurance and all the stuff. I managed fine. Yes you can make a decent living with 12hr in houston  

  
If you dont want to have a family yes you can manage.  But most people with kids wont manage to live off $11/hour without some type of assistance.

Hell I lived in college off of $1000/month, including bar expenses, but I couldn't have did that if I had a kid to support.

  
So what? Why does it matter what it costs to raise a kid when deciding what to pay your employees? Your first post was a great explanation of when Aldi pays it's cashiers $12/hr and whether or not the employee has a family to support didn't seem to factor in.

As an employer, they also realize it's better to have 4 competent employees working at $12hr than 6 crappy employees at $8. Same cost but the 4 employees are happier and more productive which is a win/win for employer and employee.

fleetwoodmac said:   I live in Houston, TX where cost of living is extremely low. Yesterday, I was shopping at ALDI and I saw the sign on the window about hiring cashiers and it says right on the flyer, $12/hr starting salary.

Now, if this was happening in San Fransisco, I would understand, but why would any company pay so much higher than the minimum wage for a cashier?

So I asked the cashier who happens to be the manager. Here is the conversation

Are you really paying $12/hr to new cashiers?

Yes sir

But you know the minimum wage is $7.53/hr, I am just surprised

Well, we started with $9/hr which is what WalMart is paying but people did not stay long with that salary. They quit in couple of months
What is wrong with that?
Oh, you won't believe how much time effort energy money we spend to train
I see, well then what did you do?
So we increased the starting salary to $10/hr
And?
It did not help so we increased and increased incrementally to $12/hr so far so good
So nobody is leaving
Well, not yet
-----------------------------------------------
What is going on here? $12/hr means $24K/year salary. An engineer right out of college makes $60K around here. I have seen college grads making 30K/year but I am not gonna touch on that for now.

Something is really screwed up with the labor market. And now we will be deporting millions of illegals, so what will happen then?
Cashiers will be making same as engineers? Crazy

So I am being a little sarcastic here but the sad thing is you think $24k/yr is alot/livable wage, it isn't even in most lower cost areas. According to google search for rent in Houston the answer excerpt says the average rent in Houston is $1105/mo for a one bedroom. If we want this hypothetical young grocery worker to find a suitable mate and procreate they need a one bedroom for dating and since you think 24K is a lot they shouldn't have to be living with their parents, either so again a one bedroom should in reach.  And that one bedroom would be more than 50% of their pre-tax income alone, never mind health care, utilities, transportation, taxes, eating, savings and maybe a modicum of entertainment. . But hey it just a starting job right or if they are older maybe it is this hypothetical grocers fault for being on the low rung of society, they clearly are a lazy slob with no ambition and god doesn't love them or they would be a lot more successful and smarter.  If we all wanted to we could be engineers making 60K starting salary with robots scanning and packing our groceries. And well my wife's grandma, 90+ now still living on her union grocery store pension and healthcare, she earned and deserves that but yeah the workers now they don't deserve anything half that good because.....reasons. /sarcasm

meade18 said:   
daw4888 said:   
tantuti said:   
Rajjeq said:   You're saying $24k a year is too high, but can a person in Houston pay rent, food, health insurance, living expenses etc on $24k? Logically, no job should be able to pay less than the wage necessary to pay living expenses, because no one would be able to afford to stay at that job, unless they expect to hire only kids/students/illegals.
  
I managed. When I had my first pc repair job, was making 11.00 hr. I owned a home, owned a car, had insurance and all the stuff. I managed fine. Yes you can make a decent living with 12hr in houston  

  
If you dont want to have a family yes you can manage.  But most people with kids wont manage to live off $11/hour without some type of assistance.

Hell I lived in college off of $1000/month, including bar expenses, but I couldn't have did that if I had a kid to support.

  
So what? Why does it matter what it costs to raise a kid when deciding what to pay your employees? Your first post was a great explanation of when Aldi pays it's cashiers $12/hr and whether or not the employee has a family to support didn't seem to factor in.

  
Well I would prefer employers pay their employees enough that they don't have to be also supported by governmental programs.  

I always find it funny that the same people who rail against increasing the minimum wage are the same people that rail against food stamps, medicaid, and welfare programs.  Letting the minimum wage stay at $7.25 all but guarantees that the government will have to supplement the income of a large number of people due to them earning a non-livable wage.  This allows companies like WalMart to take advantage of the situation and pay employees a non-livable wage since those same employees can then go to the Government and get assistance to make up the difference.  Yes increasing minimum wage will increase prices, but what most people continue to fail to see if that we always pay these increased prices, its just all rolled into our taxes which are supplementing the profits of companies whose bread and butter is based on the back of near-minimum wage employees.

fleetwoodmac said:   

What is going on here? $12/hr means $24K/year salary. An engineer right out of college makes $60K around here. I have seen college grads making 30K/year but I am not gonna touch on that for now.


 

  They can't be STEM degrees.

Skipping 39 Messages...
Believe me when I say Aldi put a lot of time and resources into figuring out what level pay will get them their best investment

Aldi expects a lot more from their cashiers than a $7 an hour cashier. Also, people with that level of skill know they aren't going to be much better. So they are more likely to stick around.



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017