How to Go from Cog to Boss and Earn Much More Than $8 an Hour

money

Towards the end of last year, after publishing my cog job post, I came across an article about 10 companies who pay their employees the least.

Here’s what the companies pay their cog workers:

1. Walmart – less than $9 / hr

2. McDonald’s – $7.25 / hr (federal minimum wage)

3. Target – less than $9 / hr

4. Kroger – unknown

5. Yum! Brands (owner of KFC, Pizza Hut, etc.) – less than $8 / hr

6. Sears Holdings (owner of Sears and Kmart) – less than $8 / hr

7. Darden Restaurants (owner of Olive Garden, Red Lobster, etc.) – less than $10 / hr

8. Macy’s – less than $9 / hr

9. TJX Companies (owner of Marshalls, TJ Maxx, etc.) – less than $8 / hr

10. Starbucks – less than $9 / hr

As you can see, the majority of the low-paying companies pay $8 – $9 / hr. If you work 50 weeks a year, 40 hours a week, and makes $9 / hr, you’ll earn $18,000 for the year. You can barely support yourself with that salary, let alone a family.

Not surprisingly, in the summer of 2013, a bunch of fast-food cog workers went on strike and demanded to be paid $15 / hr. After a year, they’re still making the barely livable hourly wages. I’m not surprised.

If you are a cog worker, you can demand all you want, but you will never make more than a hair above the minimum.

Why? Think of it this way …

Would You Pay $15 for a McDonald’s Cheeseburger?

Let’s say McDonald’s wants to boost its revenue and decided the best way to do so was to make more per burger. So instead of charging the customer $1 for a cheeseburger, it decides to charge $15.

With one stroke of the pen, it could potentially make 15x as much money.

So why doesn’t it do that? Because of competition and substitution.

Why pay $15 for a cheeseburger when you can get it for $1 from Wendy’s or Burger King. That’s competition.

Why pay $15 for a cheeseburger when you can get a pie of pizza from Domino’s for $10. That’s substitution.

McDonald’s can’t raise prices too much because people just won’t pay.

In the same way, cog workers cannot raise their salaries because the companies won’t pay. If you’re low-skilled and are not willing to work for such a low amount, a million other people can do what you do and will accept the barely-livable wage. Your competition is immense.

Even if the government gets involved and raises the minimum wage to $15 / hr, the companies will figure out a way to cut cost — either through outsourcing or automation. Your substitution is equally dangerous.

Why Schools Don’t Teach You How to Think

If you’re a cog, you’re not entirely at fault. You didn’t know any better … until now.

The schools you’ve attended — from elementary school, middle school, high school, college, and beyond — do very little to teach you how to excel. Rather, they teach you how to be cogs.

They tell you:

  • to become reliable. “Come to class on time.” So you can learn how to be on time for your cog job.
  • to become obedient. “Follow these instructions.” So you can do what your masters tell you in your cog job.
  • to become hard-working. “Get good grades and you’ll get a good job.” Your good grades show your masters that you are indeed a good, lil cog.

Being reliable and hard-working isn’t bad. They’re traits of successful entrepreneurs. But when coupled with blind obedience, you have the recipe for the perfect cog.

Why do schools train cogs? Because that is their purpose … to mass-produce workers of the future. Schools for the masses were created in beginning of the 20th century to house children as parents went to work. But schools won’t function just as babysitting centers. They’ll teach children how to fit into the big business machines.

Seth Godin writes in Stop Stealing Dreams:

A hundred and fifty years ago, adults were incensed about child labor. Low-wage kids were taking jobs away from hard-working adults.

Sure, there was some moral outrage about seven-year-olds losing fingers and being abused at work, but the economic rationale was paramount. Factory owners insisted that losing child workers would be catastrophic to their industries and fought hard to keep the kids at work — they said they couldn’t afford to hire adults. It wasn’t until 1918 that nationwide compulsory education was in place.

Part of the rationale used to sell this major transformation to industrialists was the idea that educated kids would actually become more compliant and productive workers. Our current system of teaching kids to sit in straight rows and obey instructions isn’t a coincidence — it was an investment in our economic future. The plan: trade short-term child-labor wages for longer-term productivity by giving kids a head start in doing what they’re told.

Large-scale education was not developed to motivate kids or to create scholars. It was invented to churn out adults who worked well within the system. Scale was more important than quality, just as it was for most industrialists.

And anyways, cogs are much easier to control. Teachers have every incentive to train cogs because that will make their own jobs easier as well.

Now do you understand why schools suck? Because they are a representation of the cog job future. And cog jobs suck hairy donkey balls.

Once you’re done with your schools — your cog job trainings — you’re a prime target for exploitation unless you educate yourself to see how the game really works.

Look at all the 50-year-olds who faithfully dedicated their lives to their masters. They were used and abused, but at least they’ll have a secure life of comfort, right? Nope. During the Great Recession, when things got a little tough, the employers presented to them gold watches (if the employees were lucky), gave them a swift kick in the butt, and sent them out of the doors. And now, even though the economy picked up a bit, they’re barely scraping by because no one wants to hire them.

There is no room for loyalty, especially when Wall Street demands higher and higher profits.

How to Earn What You’re Worth

The goal of every business is to make more revenue, to cut down expenses, and to maximize profit. Your salary is an expense. The more you make, the lower the company’s profit. Thus, your employer has every incentive to pay you as little as possible.

(When a slick recruiter tells you that so-and-so company views its employees as assets, you’ll see how much of an asset you really are when it lowballs your salary.)

In an employer-employee relationship, there is no loyalty. Your boss has no loyalty to you, and you should not have any loyalty to your boss. So don’t feel bad when you wrestle every last cent onto your paycheck.

How do you earn what you’re worth? Through a two-step process:

First, become immensely valuable. That means the company needs you so much, it cannot function without you. And because you are that precious to the company’s survival, you have hardly any replacement — no competition and no substitution. In Seth Godin’s words, when you are immensely valuable, you’re a “linchpin.”

This article will show you how to become a linchpin.

Second, demand your pay to reflect your worth. No one will pay you megabucks because he feels generous. He pays because he has too … because it makes more sense to pay than to not pay. Because if he doesn’t pay your worth, many other companies would gladly do so. Heck, it is a good idea to apply for a new job — move laterally — in another company. This is a good way to see if you’re getting jipped with your current pay.

A cog fails the two-step process.

First, it is a mass-produced commodity. Sure, a cog is important, but if it breaks down, you can pick another one up for 5 cents in the local hardware store.

Second, when was the last time you have heard if a cog fighting for its fair pay? Pretty much never. They just keep on spinning and spinning like they learned in school. They don’t make a peep. They don’t cause a ruckus. They do what they’re trained to do. They were good students, and now good employees. (Good for the teachers and employers, that is.)

And after 30 years when shinier, sturdier, and cheaper cogs appear, the old cog gets switched out without a second thought. After all, what’s so special about a cheap commodity?

If you fail to meet either step, you will not get paid your worth.

If you take only the first step, you’re an exploited superstar. It’s not a bad place to be, because the balance of power is on your side. You only have to exercise your power. If you wise up and fight (or jump to another ship), you could potentially increase your salary by leaps and bounds.

If you take only the second step, you’re like a fast-food worker demanding $15 / hr. Your employer will merely laugh at you because a million other cogs could take your place. At this stage, stop focusing on increasing your pay and focus on becoming a linchpin.

Look at who you are today. Are you a cog or are you a boss? If you’re not happy with who are you in life, you now know what to do.

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Comments

  1. Good article, Alex. I share the same mindset. And I’ve also read & watched that content from Seth Godin. It’s good stuff. (Most of) The modern school system is a pathetic remnant of the 18th century. It is in dramatic need of renewal. . .

    . . . The only problem is that now, schools may soon be outdated. Save for general education. It’s all about becoming a “self-starter”, to borrow a phrase used by Tyler Cowen in his book “Average is Over”. It means to be self-motivated, autodidact, and disciplined enough to use a computer responsibly. Very straightforward, yet most people struggle with it.

    • Ludvig,

      The problem with people is that they do not want to be a self starter instead they want someone else to deal with the problem. I have been working in the IT field for a very long time in an Corporate environment and to be honest I have said it many times that people should at least take the time out of their day and take a class in basic computing. But for people to take the time to do something they think is boring they would much rather give me the responsibility so they can point their fingers at the IT guy knowing that the problem could have been solved by the user. Believe me I had my share of uploading printers something they can do with a click of a button to make my head explode!

      Self starting although I’m a big fan of it because it means to me that the person who is a self starter makes stuff happen, solves problems and is the “Go To” guy. It makes me feel like I’m accomplishing something worth while. Most people are just content in doing nothing to progress themselves, although they act as if they want to progress but in reality they want something for nothing!

      Why would a person demand a higher wage in a low skilled job that a 15 year old kid can do? Do they not know that by asking for a higher wage means that something else will either be stopped or the price of that thing will go higher or even worse they will work with less personnel while the majority will be automated.

      First I think we would have to go through a serious withdrawal of the already ideas and ideals in society today. For the person to be a self starter he or she will have to be forced by certain dynamics in order for them to change their whole outlook. Some will do it in an instant while others will not!

      In the end things will change for the worse rather than for the better and it the end the strong shall survive!

      Great comment Ludvig and a great post Alex!

    • Alex Ding says:

      Hey Ludvig,

      I agree with what you said. It is about becoming a “self-starter.” I think with most people, they don’t even know how to start. This is where school comes in … someone to tell them to what to do. But for people who are willing to take control of their own lives, they will get far. Very far. My next book is something related to this.

  2. This is a great article and I hope it inspires people to step out of the “cog mentality”.

    To anyone reading this comment, I just want to add two things:
    1) You can do it.
    2) You deserve to do it.

    Find something you’re passionate about and bridge the gap between ‘top cog’ and ‘top dawg’. If you don’t have something you’re passionate about, then it’s because your heart has been calcified way too long.

    In order to bring your passion back to life, sometimes it just means you have to stop doing what you’re doing. Once you stop the thing that’s destroying your soul, then your heart can open up and you’ll start to uncover your passion that’s been there the whole time.

    Unfortunately, until you’re 18, you kind of just have to play by the rules. Alex makes some great points about school but I can’t really see anyway around it if you’re stuck having to do it. Just know in the back of your mind that school is baloney and bite the bullet and go.

    And if you’re really badass, do extremely well in school just to stick it to the man. Remember, this is your life. Don’t do poorly at something just because you don’t care. Do well in school because it keeps your mind sharp…and how you do anything is how you do everything.

    Think of school as a training grounds for your own, personal, ass-kicking dojo. And when they hand you that diploma, you can start a whole new game — and it’s called the real world…

    …unless you plan on going to college. Then you have to stay put for another four years.

    But the mistake so many people make in college is just going through the ropes. If you’re going to go to college, at least be known for something. Do something outrageous. Frat hard. Read lots of books. Start a business. Create a club…

    …something! Anything!

    Don’t let your dispassion for school prevent you from being a top dawg.

    Got it, comrade?

    Cheers from D/C Russ.

  3. Nice post man,

    its a nasty system, but at least there is a way out. In many countries unless you move into crime its slave for life. The problem is most guys don’t know they’re slaves, and pointing it out only makes them angry. They will remind you that you’re not a patriot, team player or whatever other rationale they use to justify being part of someone else’s dream.

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