On 5/28/12 6:18 PM, Ro Grrr wrote:
> Jim Brown
> I think I previously had mentioned something about the PRIME quoting $100 an
> hour, then passing on to the SUB/Tier 1 a rate of $50 per hour, who passes on
> $25 per hour, who passes on ONLY $25 per hour for the actual work.
> The main contractor and tier 1 Sub DO NOT DO any work. They only push paper
> and get paid political "confiscatory" amounts of PROFIT, while the WORKERS
> bust their butts. Some of them get killed too.
> Do any of those upstream care ?
> I doubt it.
> It's those workers who have tokeep their hands on the tower to save their
>I don't know that profit is confiscatory at any point in the chain.. the
problem is the number of steps in the chain.. Each step costs a minimum
of 20-25%. Rack up 3 steps, and you're looking at 1.2^3 = 1.7 times
And each of those steps really can't do it for less than a 20%-25%
adder.. Gotta have an office, gotta have staff, gotta make a profit
(maybe 10%). Only if you're huge can you get the percentage down from
economies of scale.
Rarely, rarely does any one step make more than around 10% profit,
because you get higher than that, and somebody steps in to undercut you.
Less than that is not enough to deal with the risk, and the slow pay,
and all the other BS you deal with as a business owner. YOu might as
well put your money in a mutual fund or something.
Here's a typical breakdown..
$20/hour to worker
various and sundry costs to employer is 15-20% (FICA, Unemployment, etc.)
Paid holidays (10/yr) = 4%
Assume no vacation or sick days or health insurance (2wks/yr of
vacation and sick leave is another 4%)
workers's comp is about $4/hr (looked it up in some tables.. maybe only
$3.50/hr, but construction at height is expensive.. but not like mining
Cost for supplies, office, etc. another 25%
so we're up to 50%
General and Administrative (i.e. management) 10%
now we're up to $36-37/hr
After that, each layer adds about 20-25%
Work your guys harder and rack up some OT at 1.5 x, you don't incur more
costs for vacations, and you only accumulate more workers' comp at
Pay your tower guys $10/hr (which is pathetically low, by the way).. the
fixed costs (worker's comp, etc.) eat you alive... WC is going to be
half the wages cost, unless you hire your guys as independent
contractors on a 1099. (which is very much skating the edges of the law)
Maybe you pay piece work or "by the job" and make them go get the gear
with a 8 hour (uncompensated) drive (like in the show).
Myself.. when I'm hiring construction workers, I want no more than one
tier between me and the toiler (i.e. I'll pay a general, and he'll pay a
sub, who will pay the worker) I ask how much they're paying the
workers.. basic, no risk stuff, I'm expecting to spend $20-25/hr.
Cheaper than that and I know I'm getting rookies picked up at the
corner, so there better be a good foreman. that is, I don't expect
ditch diggers or concrete breakers to be paid $20/hr, but I sure as heck
expect the guy or gal supervising to be getting $25.
Something with skills? Or Danger? I'm expecting to pay more. Heck, the
guy who fixes my car is getting something like $80-90/hr to the shop,
and the mechanic is probably getting $40-50/hr of that.
On an assembly line, where you have one task and one task only.. yep,
you're down in the $10/hr range.. but I can't imagine that tower work
fits in that category.
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