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I don't think that's the paragraph you're looking for to make your point.
He said plumbers would start in the low $30-an-hour range but would earn low-$40s when they were experienced.
Apprentices would start on minimum wage but progress fairly quickly towards $30 an hour.
If you’re charging your plumbers out at $110 per hour (minimum hours, plus travel, plus parts) and only paying them $30..
That's some margin.
Yeah, I'm a software developer, and in the past when my time was billable it was billed somewhere between 3-4x what my total compensation was. I get that they need to make money off me but that was a quick disillusionment when I learned what the variance was
Depending on overheads, your time has to be worth between 1.8 - 2.2x your compensation. For the company to make money and stay in business, it has to charge above this amount.
But if your company is charging you out at 4x your compensation, they are making a massive amount off your time. A reasonable amount would be aroung 2.1 - 2.5x your compensation.
As an anecdote, my little brother finished his architecture degree after being a builder for years. He had both the practical skill from building and the eye of an artist. He got a job at a very prestigious firm. It wasn't long before they saw how good he was, even though he was a grad his charge out rate was $180/hr. I asked how much of his time was billable, it was not as you would expect for a grad, his time was 100% billable work, he was being paid $25/hr. I was shocked, after trying to negotiate with the firm for a year he got a pay rise to $30/hr. It was only a month later he quit and started his own business, he charges much less than previously for the same work and he makes significantly more.
Yeah, that adds important context... and makes it worse.
He's actually offering $30/hr and topping out at $40/hr. When the paragraph I quoted indicates that tha top rate should be about $50/hr.
Either way, it's another case of an employer complaining that the labour pool market is wrong.
Even with the normal expectations and earning possibilities etc.
If you've been advertising a job at a certain rate and nobody has applied, then either the location, conditions or pay are not meeting the market. You can't change the location for a business like this, so you have to change the conditions and/or pay. ie, the true hourly rate for any given job is what you can hire someone to do it for.
true hourly rate for any given job is what you can hire someone to do it for.
Exactly. That's how a free market works.
It's also not that uncommon for companies outside the main centres to have to pay more than the main centres to attract skilled workers. Why would they move to Putāruru to work for the same money they can get in Auckland?
One key reason to move is cost of living, it's a lot cheaper in many ways to live out in the sticks, especially with housing. Lifestyle can also be part of it.
It can be cheaper, but it's well known how hard it is to attract skilled workers to the regions.
There is a certain lifestyle that comes with it, but that lifestyle doesn't always appeal. There are far more people moving to cities than there are people moving out of cities, generally. Many employers in the regions find they have to hire from overseas, it can be quite a problem finding skilled staff at prices businesses can afford.
$40 an hour? Shiet, man! Plumbers around here charge around $600 per hour.