Does the Increase in the Minimum Wage Mean an Increase for Private Investigation Employees? #112

Does the increase in the minimum wage mean investigators will get paid more as employees?  Many people think that because of the rise in the minimum wage it will force companies to pay other employees more as a result.

About 12 or 13 years ago I entered the private investigation world as a surveillance investigator for Omega Insurance Services.  At that time they were probably the 2nd or 3rd insurance investigation services company in the United States.  If you have followed me for some time you know that they provided me with training, a laptop, a camera, performance bonuses, and a cell phone.  I started with that company at $15.50 an hour plus like .28 cents a mile (or something like that).

Before I was hired with Omega Insurance Services I had two jobs.  At 25 years old I worked as a Loss Prevention Agent for Banana Republic (GAP Inc.) and I delivered newspapers 7 days a week.  I made something like $12.50 an hour at Banana Republic and maybe like $700 a month delivering newspapers.  I just wanted one job that would equal the pay of my two jobs because I was married and gone all the time.

And as I previously mentioned I was hired on with Omega Insurance Services at $15.50 an hour plus like .28 cents a mile. By the time I was hired on with that company I was 26 or 27.  The only skills I came with were from the Army and Loss Prevention.  None of my other jobs before the Army really applied to an investigation job.

After learning the ropes I came to find out that the company I was working for was charging its clients (most of them) $65 an hour.  And when you factored in all the perks (my salary, computer, cell phone, mileage, bonuses) I was getting about ⅓ of that $65 an hour.  Omega and a few other big insurance investigation companies had many huge accounts because of this discounted pricing.  The company made their money in volume of cases and their profit margin was pretty thin.

So that was about 12 or 13 years ago in this industry.  Over the past 12 or 13 years the minimum wage has slowly increased and the price of gas has fluctuated dramatically over those years.

Over the past 12 or 13 years clients have wanted more educated investigators and have wanted investigators with certifications and degrees (just to get their business).

What has not changed dramatically is the wage for a private investigator employee.  Depending on the company the entry pay would vary between $15 and $23 ish an hour.  And this is the same pay companies were paying employees when I first entered the business.  The rise in cost of living, the raise in the minimum wage, the raise in gas prices did not affect how much I was paid by any company over that time.

Competition is what drives the investigation markets prices.  The big companies grabbed many of the big insurance clients because those clients had the ability to call one company and have their file worked anywhere in the country at a lower rate than smaller companies.  It’s about competition with the final product and competition in the prices.  It’s about the client getting as much as they can while paying the least amount possible.

If you asked your current company for a wage increase just because the minimum wage is increasing your company will likely tell you no and to find another company that is willing to pay that.  And they will say that because every investigator to some degree is replaceable no matter how good you are.  No matter how good I am as an employee there is probably someone out there a little bit better and/or willing to work a little bit harder for the same or less money.  A company doesn’t owe me anything, though if they would like to keep me happy then raises are always nice.

So we fast forward to 2016.  Investigation companies whether it be insurance or for the public sector still charge about $65 an hour. Now that price will vary of course depending on the client but the average is still probably about $65 an hour.  The investigator’s wage is still about the same over that time.

The market is what drives prices and just because the government forces companies to pay their people more money doesn’t mean the client has to adjust and pay more.  It doesn’t make the investigators more valuable just because the minimum pay threshold has risen.

I could go into various rants about this topic but I will give this advice to every investigation employee that his not happy with the wage they are making.  Start your own company and charge $65 an hour (or whatever the market in your area will bare).  Get paid what your skills are truly worth.  Get rid of the middle man (your employer) that takes ⅔ of the revenue.

You can start off slow and build up over time.  I wouldn’t quit your day job until your business makes more than the company you are working for.

I truly believe in this country we will not see a wage bump as a result of the increase the minimum wage because we are likely earning more then the minimum wage when we enter the industry.  We will only see an increase in the starting wages when the minimum wage surpasses what the entry pay is now.

Until then I would say build your skills and go out on your own.  Then make sure to tell me about your new business and your successes.