Rosinante @ 45,

Referring to a previous post, 13$ an hour is suck wages for a carpenter. My brother owned a carpenter business up until late ‘08. He started guys at 18 and his lead man was getting 25. And those were average for this area.

Two points to make here. First, our lead men get paid about $26, so there’s not a lot of difference for lead men. Second, the entry level job is stripping forms after the concrete cures. That is virtually unskilled labor, not what folks normally associate with carpentry.

The key is that a guy is paid according to his skills. Someone who starts at $13 can get to $26 in short order if he works hard, shows up regularly, is safe at all times, and learns. Education doesn’t have to take place in a classroom; we spend lots of money teaching people skills, so that they can progress up the wage scale by being more productive. They don’t progress because of seniority; they progress because of productivity.

The biggest challenges for that business right now are:

1. There is very little or no private commercial construction happening right now, so profits and wages are plummeting.
2. The work available is for government, and government work is a real pain.

Another couple of anecdotes from category 2:

We recently bid a project for a governmental entity. The engineer’s estimate was $31M. Our bid – the low bid – was $19.5M. We were asked to price up some changes – they amounted to about $3M. My thought at the time: this illustrates the fundamental problem with government work. As a contractor, I was happy to have the extra revenue. As a taxpayer, I was extremely irritated. Why spend that extra money? The project supposedly met the needs of the public as designed; why add scope to the project? Just give the money back to the taxpayers, and let them spend it.

We have a project with another one of our companies for another governmental entity. That entity has a representative on site who thinks he knows more about how to build a building that we do. But his main activity is going around telling people that their work is not good enough, forcing them to tear out the work and rebuild it. The workers, who got an order from someone in authority, simply did what they were told by this idiot. But when this was elevated to a superintendent, we looked at the “non-complying” work and found it was build exactly according to plans and specs. The idiot agreed, but said that wasn’t good enough for him, so we had to tear it out. We have run it up the line, and have yet to find anyone who will face down this bully. No one, I repeat no one, is better off because of this guy’s behavior. Our profits are lower, the workers are discouraged, the public pays more (because we will eventually get something for changes), and the product itself is no better (and might be worse, since rework is never quite as good as original work).

The fundamental problem is that government is a monopoly, and acts like a monopoly: corrupt, risk-averse, cowardly bullies. There are lots of good people in government, but the monopolistic incentive structure punishes them.

The design of our nation called for checks and balances to control the monopoly. But most if not all of the negative feedback loops have been severed by those who have accumulated power. As it is now, you’d need to be a hero to do the right thing within the monopoly.

And, human nature being what it is, there are simply not enough heroes to go around.

Cheers,
L3