Sunday, September 5, 2010

The Construction Industry and You

I wanted to write this article on the construction industry as a whole on some of the changes I would like to see implemented. We all know just how hard this industry has been devastated by the current housing bust, but I believe there is a way that we as citizens of this great country can help each other. I know it is a tough and challenging environment out there with the economic situation being what it is today and nobody wants to have to pay anymore than they have to for any particular product or service.

The housing industry as a whole needs to be revamped, that is from the lending institution, building suppliers, contractors and the sub-contractors. I know that just a couple of years ago we were all making money, well times have changed and we will all have to do some soul searching and reorganization.
That being said the home owner and or buyers need to make some changes as well, and I’ll start by asking you do you want a quality product and quality services, naturally everyone does. The hard part is are you willing to pay for that quality. I think the vast majority of people are willing to pay for quality; they just don’t want to pay an exorbitant amount. I would ask do you want your contractors to be insured, do you want all your sub-contractors to be insured, and of course you do.

Let me give you an idea of just how much insurance cost for sub-contractors, first we are supposed to carry general liability, this one is relatively inexpensive around $1500.00 per year. The workman’s comp. insurance is the one that drives all employers’ nuts, according to which trade you specialize in this one can get very expensive. I am going to give you a few examples just to give you and idea of the cost.
Framer Hourly
Rate of Pay     Insurance Cost Per Hour                  Based of 40 Hours           Per week  
$25.00                                        $4.50                                $1000.00                  $180.00
$18.00                                        $3.24                                  $720.00                  $129.60
$17.00                                        $3.06                                  $680.00                  $122.40
$17.00                                        $3.06                                  $680.00                  $122.40
$12.00                                        $2.16                                  $480.00                    $86.40

Per Week Ending Cost $3560.00 $640.80
Now add the payroll to the insurance cost, the total cost of this framing crew for the week is $4200.80, this is before we adjust for taxes and or benefits. This cost also does not cover the nails (approximately .25 per square foot), no tools the average cost of tools to set up a framing crew is approximately $5000.00, and crane if needed.

Now I want to break this down even further starting with the framing crew. A typical framing crew will usually consist of five members, this framing crew is capable of framing approximately 1000 square feet per week, and let’s say they were being paid $4.50 per square foot to frame, that means this crew brought in $4500.00 for this weeks work. The employer paid out a minimum of $4100.80, before taxes, equipment cost, or nails. This is back breaking work and as you can see these guys are not getting rich, in most cases the owner of the framing crew is working with the crew and his pay was what is left over and not counted in the above figures.

Roofing Trade
$18.00         $5.04        $720.00          $201.60

I won’t bother to do the roofing detail as you can figure that out by following the framing example. Except a roofer can average 500 square feet per day on average 8-10 pitch roof
I would like to add a side note, as an employer if you do not have more than two employees you do not have to carry workers comp, although all builders require you to have it before you can be paid, if you do not carry workers comp. they will deduct it from the sub-contractors pay, and usually at a higher rate than they would have to pay an insurance company.

I know this article has gotten a little lengthy, but I thought the information above was relative to where I am going with this article. We are all complaining about illegal immigration and the construction industry is rampant with illegal aliens, and what I am about to suggest is to use either citizens of the U.S. or individuals that are here legally. I personally think the playing field should be level and since most illegal immigrants don't carry insurance of any kind you can see why you can get a cheaper price from them.Yes it might cost a few more bucks but if the federal government is not going to do their job why don’t we do it for them. Hire responsibly and we can help everyone and hopefully we can help turn the housing industry around. The construction industry should be held accountable as a whole from the contractors to the sub-contractors, and finally the home owner, we all have a responsibility to each other.

The task of determining whether on or not an individual is here legally has been made simple by the federal government and it is free to employers to use, it is a website called E-Verify, so I am asking you to please make your contractor provide you with proof that they e- verify all sub-contractors, if they won’t move on to another. If you are looking for a new home and going to a production builder let’s put pressure on them to also make their sub-contractors e-verify, if we all work together we can accomplish anything. You the home owner should also do your part and only hire quality legal contractors, and quit trying to get something for nothing. Let me tell you people if an illegal immigrant can’t get a job they will go home.If you would like to read more please follow the link below.

I would like to add this link to show what is going on in the construction industry, follow this link about Pulte Homes.

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