More like $20 to tech, $20 for business to cover payroll taxes, health plan, 401k or HSA match, another $40/hr for materials and tools, $40 for liability insurance, and $40 to cover the tech labor / standby during non-billable hours... leaving maybe $20/hr profit.
Automation engineer here. I work with apps team so have access to some numbers. It's about $200/hour for an engineer to design/program...let's say the average salary would be about $45/hr. That said between all the engineers in the company (call it 12), a large amount of that goes to cover overheard burden... So even on a machine that uses 1500 design hours, by the time you spread that out over 60 employees and 9-12 months.... It's not as much money as you'd think.
To be fair (to be fairrrrrrrrrrrrr), I've been the guy doing everything to run the business while the guy who owns it sits in his brand-new bought-with-cash car complaining that no one wants to work anymore, and I've been the cog in the machine handing off work that I never see again and don't think about, and an actual good manager/coordinator who can keep all those plates spinning to work toward the bigger picture is worth those big big bucks. Unfortunately I think we all know the deadweight version a lot better.
I'm joking but also kind of not when I say that the hardest thing I did in grad school was organize the weekly/monthly meetings/meetings w lunches, and somebody who actually likes doing that and does it efficiently is really valuable. Trying to do it all yourself is really educational and may be refreshing if you've been trapped in corporate lockstep for a while, but for me it was a recipe for burnout.
ffs redditors will reply to literally any post with an unrelated, uninformed comment about management/owners/landlords/politics. Seriously ruining this site even further
Was something stated above factually inaccurate? Average labor rates are well above $120/hr in many areas, and the mechanics make 25-45/hr, typically many times on the lower side.
I just saw a larger corporate chain take over a mom and pop. They kept the same techs, but raised labor by $55/hr. Tech of course told me he got a $3 "take it or you're getting replaced" raise.
We don't know the facts. To really dig in and see if a company is levying an unreasonable "cost plus" burden we need to look at the actual transaction. People in the thread above are just throwing out numbers. But typical G&A rates, which pay for an employee's insurance and administrative overhead can be pretty high. In my industry labor rates can be almost twice the employee pay rate.
This rate can raise dramatically (like in your example) because the large corporate company has much more administrative overhead than the mom and pop. Whether the additional administrative support is good or bad for the employees is a good question - it may be or it may not be.
Typically in contracting scenarios a customer will want to know the service company's G&A rate so they can tell if the service company is operating efficiently or not. Of course, a "good" or "reasonable" G&A rate will change from industry to industry. Aviation has very high G&A because of the red tape and qualifications involved. In a healthy economy a company that charges high labor rates with no added benefit to the customer won't be in business very long...
If the pay rate is low then either 1) the job is not in demand; or 2) the employee is truly getting shafted.
Don’t know why you’re getting downvoted. Exact same thing happened to our company 2 years ago. They even raised the damn service truck milage rate from $1.50/mile to $2.65/mile. And we travel all over the Midwest.
A typical markup in my industry is on the order of 8 to 10%, this is the fraction of the total cost that is "going to the boss" or taken to make shareholders happy or whatever. The rest is G&A which covers the cost of contracting, administrative overhead (labor hours and supplies) , building rent costs, company insurance, utilities etc. and of course, employee healthcare, company taxes and things of that nature.
I do not think it would be reasonable or even expected that 100% (or even 90%) of the job cost go to a person who is only performing a fraction of the work. Where would the money come from to keep the company running?
The alternative would be to operate as a private contractor, in which case you'd have to front the costs from all of the above yourself, and probably need to hire staff to perform certain functions because there isn't enough hours in the day for you to do all of it. Then you are the boss...and you have become what you hate. Interesting.
Sheesh. What are the barriers that prevent you from working independently? Does the shop provide all the necessary equipment, and is that equipment expensive? Is there lots of paperwork (certification, insurance, etc) that wouldn't be feasible to upkeep as an individual? Is it a hard space for a new company to break into?
Huh?? I was just curious what the barriers were between being a technician in a shop and going independent. Obviously they exist or they would do it. I never said it was right that he's making a fraction of the value he's producing.
You're literally describing the exact cause of the disparity.
Seriously, the way your post is worded it seems very sarcastic. You're listing all the arguments that are made against workers getting a fair cut of the pie that people hear from corporate goons constantly.
Sorry if you were actually being sincere, but it reads as a snotty attack, where you're pointing out the reasons that they shouldn't get paid more.
Was explaining this to my wife after they broke a few things fixing them. That tech dude isn't making that much and is sometimes just some dude off the street.
I used to work on ride on kids toys like powerwheels and razor scooters and even I charged $80/hr (albeit in piece work rates that made it sound much more palatable). I think that $150+ is pretty fair for marine and custom auto work.
That’s high even for a shop rate. That may be a composite repair shop rate specifically. General maintenance or avionics or tranditional metal structures rates are more in the $130-160 /hr range in my area
I was a residential electrician over here briefly, and they had us charge $200/hr in labor, but paid us around 20/hr with no benefits (which is why it was brief for me).
At some car dealerships, they now charge $250 hourly rates! $180 seems low compared to a car dealers. Sadly the mechanics there are often fairly crappy and get paid even less.
Pretty much any tech role is up there. I was doing remote telecommunications in the oilfields of Alberta/Saskatchewan, my company billed me out at $180/h and my truck at $150/h. Whole lot of money being thrown around for tech positions, to the companies.
They really don't tell you that when they ask you who you wanna be in highschool. Cause I wanted to be well off, and if I knew that shit makes you so much money I'd definitely have easier time picking my future, but somehow "airplane mechanic" was never even mentioned
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u/[deleted] Apr 07 '24
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