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View Full Version : Illegal labor vs. legal; setting wages


sprinkler guy
03-19-2010, 12:40 AM
This subject came up in Tommy's thread titled "things do come full circle..." and I thought it should have it's own thread. This is the quote from Greenlight -

David,
No knock on you, because it is the norm, but
You start guys at $10.00 an hour and top them @ $13.50 as foreman. I think that is something most of us don't want to examine any further than we have to. You simply aren't going to get a lot of loyalty out of people who can barely afford to survive. Their options are work a regular work week of 40 hours and not be able to pay your bills or work 60-80 hours per week, pay your bills and manage to avoid spending because your job dominates every aspect of your life. As guilty as the employee who stabs the owner in the back is, the owner has certainly never complained about the unbelievably low rate for skilled labor in the field. Let's face it, for years the hispanic market has kept labor rates excruciatingly low nationally and we have reaped the benefits (ironic considering most are illegal). Now I know most will counter with "hey, I never hired anyone illegal". You didn't have to, the illegal labor was so widespread (and still is) that it kept labor rates extremely low across the board.


When I worked in manufacturing, I thought an easy answer to the "illegal migrant worker problem" was to only hire legal. When I got back into contracting, I found out how hard that was. Like it or not, wether it is your company, or the competition, the company that only hires legal has a harder time competing. I know of two guys in the South Bay that will only hire a legal and fully documented employee. Most others just dismiss the idea as impossible. I work alone most of the time, but when I have had guys, I know I get way more work out of the guy who came from somehwere else, vs. the guy who was born and raised here. I don't remember it being this bad in the early nineties, my first contracting go round. I agree with Greenlight. The proliferation of illegal migrant workers has kept labor rates down, and in some cases driven selling prices down. I don't have an answer to the problem, but may or may not ever hire someone full time, so it may not be my issue to solve.

irrig8r
03-19-2010, 10:32 AM
For a while, after selling off my L/S maint. biz to former employees in the mid 90's, I tired Labor Ready. I figured they'd be legal and all the taxes and insurance would be taken care of and I'd lose those headaches.

Found out they don't do criminal background checks. Decided not the best idea to take guys with sketchy backgrounds into customers yards. Some were good workers, but that was less than half... one guy fell asleep on the job... told me he was homeless and had to stay up all night to protect his stuff. Another was a former gang member involved in some kind of youth ministry and loudly proselytized to other workers and even my customer. Some of those who were any good wanted side money... most I'd do was buy lunch.

irrig8r
03-19-2010, 10:39 AM
Oh, almost forgot... back in the 80's helped 4 hard working employees (who had until then provided me with phony SS numbers up to then) become legal under the amnesty program. They are still grateful for that. A couple of them lucked out and even as renters got bought out when the airport was knocking down houses where excess noise was an issue. They got enough for down payments and have been homeowners now for over 10 years.

David Gretzmier
03-20-2010, 12:44 AM
I agree the illegal labor probably has kept labor rates down, but it also has kept rates down on what customers pay on lawn care and other areas as well. So it is not as if the guy that owns the lawn care company is getting rich.

I have been doing lawn care and landscape work since I was 13 and I am 41 now. I was making 20-25 per hour mowing lawns with a push mower, electric weedeater and electic blower. when I was 14. I started my first employees when I was 15 so they could drive me to properties. I paid them 5 bucks per hour back when minimum wage was 3.35. I never had trouble finding folks to hire and were willing to use thier truck back then. fast forward 7 years, and when I was 22 was paying around 7-8 per hour and was making about 35 per hour using a riding mower, no ZTR. another 6 years down the line, around 28 years old, with ZTR, the mowing rates were around 60 per hour using a ZTR, but still around 25-35 if you were using a push mower or regular rider. I still had no trouble finding folks to work at 7-8 bucks per hour. Then a funny thing happened, and you can blame it on hispanics if you like. The rates you could get for mowing stopped going up, and have stayed that way for the past 12 years. most other landscaping trades have expereinced the same zero customer rate increases as well, in areas where you don't see many hispanics working- tree work, chemical applicator companies, even guys that install sports field turf tell me they still charge the same per square foot they did 10 years ago.

If you dig back on lawnsite to when it started, you will find guys 10 years ago that shot for 1 buck per minute as a good mowing rate. that is still the rate many guys shoot for today. and most are happy to get it. yet all things, gas, cost of trucks and equipment, cost of renting or purchasing shop space, plus most other expenses have went up.

Other trades that have barriers to entry, that require school, certification, internships, etc, have seen wage and regular customer rate inflation- plumbers, heating and cooling contractors, electricians, for example, those guys working for companies make 20-30 bucks per hour around here. the companies also charge customers 75-95 per hour as well.

My reccomendation to folks desiring to make a higher wage and actually work outside for a living is to learn a skill that an everyday joe cannot go out and do. Otherwise, the guy digging a hole or the guy taping masking tape on windows for painters is going to make a fairly low wage in general.

INTEGRA Bespoke Lighting
03-20-2010, 09:59 PM
The old adage applies: If you pay peanuts you will get monkeys.

I have a new installer technician starting in April... no experience in this trade whatsoever. $16 per hour to start, $18 per hour when he is working independently and a healthy salary offer to him for next year if all works out.

I have a firm commitment to providing any person who works for me with the ability to live with dignity and make a respectable living that enables them to live comfortably. As our profitability increases so does their income. Fair is fair.

The Lighting Geek
03-21-2010, 11:24 AM
The old adage applies: If you pay peanuts you will get monkeys.

I have a new installer technician starting in April... no experience in this trade whatsoever. $16 per hour to start, $18 per hour when he is working independently and a healthy salary offer to him for next year if all works out.

I have a firm commitment to providing any person who works for me with the ability to live with dignity and make a respectable living that enables them to live comfortably. As our profitability increases so does their income. Fair is fair.

I agree with that James. When you pay someone 16.00 for example, how does that compare to wages here? I mean in the sense of exchange and taxes. You have .18 sales tax don't you in Canada? I am curious what would be relatively equal here.

sal rodriguez
03-21-2010, 11:43 AM
I agree with that James. When you pay someone 16.00 for example, how does that compare to wages here? I mean in the sense of exchange and taxes. You have .18 sales tax don't you in Canada? I am curious what would be relatively equal here.

for $16
per hr in CA you will probably maybe just get by and pay the bills. No extras that's for sure and you could never possibly own a home here.

The Lighting Geek
03-21-2010, 01:12 PM
for $16
per hr in CA you will probably maybe just get by and pay the bills. No extras that's for sure and you could never possibly own a home here.

I meant that I agreed with the premise of his statement. But the reality is that we have to be competitive as well. It is possible to pay someone a living wage and still do well as a company. I was using 16.00 for comparative reasons. But let's face it, an entry level is an entry level job. You should not expect to earn a living wage until you have a skill in which to produce the company income enough to support it. I believe a skilled craftsman could make enough money to keep him/her from becoming your competition and make enough money to buy a house or whatever is reasonable. It is a sensitive balance. I pay my employees according to their abilities and their ability to make the company grow through their efforts as a team member.

elegance_alex
03-21-2010, 02:06 PM
Our applicants put in their application what their desired wage is. I try to start them at 50 cents more than they have asked for. After 2 or 3 jobs I give them a sit-down review, and either a little bit of a raise or some requests for improvement in some specific area.

David Gretzmier
03-22-2010, 10:25 AM
As an employees' ability to generate income for a business grows, so should his compensation. As far as what that employee should be able to afford on that money, that is tougher. It really depends on what your market is paying other trained outdoor techs for similar type of work, and what you can afford to pay them based on what you can close job prices at. I know many landscape business owners here and keep track of what they pay thier crew foremen, and I am about a buck per hour higher than them for guys starting, and that have 3-4 years working in the field.

Just did a search on a real estate company site, and found 38 homes for sale from 20,000 to 50,000 bucks. did a map view, so all of these homes are within 5 miles of my home. most are what i would call starter homes, or just 2 bedrooms and one bath, although some are 3 bedroom. The payments on those homes would run someone 250 to 500 per month, or pretty close what they would pay in rent. If someone saved thier pennies for a down payment and closing costs, with good credit someone working for me that pays rent can buy a house.

Honestly tho, most guys that work for me don't save, and they tend not to buy a home based not on income, but thier lifestyle. they tend to spend a bit of thier money on ciggarettes and alcohol/bars ( thier right, but then I spend about zero on those things) , They tend to borrow for a car then not make payments on time, and they have credit card debt that is high. The trade guys I meet that make 25 bucks per hour- vinyl siding installers, framers come to mind, They tend to not own homes either, but spend more of thier money and also purchase hunting and fishing gear and do those things in abundance.

I cannot count the guys I have talked to over the last 20 years in the trades That are 45-50 years old and near the end of thier physical ability to do hard labor. They have training in dozens of areas, but have no capital or assets to show for working for 25-30 years outside.

It is not really how much folks make, as 80% of NFL and NBA guys are bankrupt 5 years after leaving the pro leagues. It is a manner of most folks cannot manage what they earn.