Labor Rate:
The labor rate in this publication is based on a National
Average Rate of $34.00 per craftsman man-hour. Thirty six
metropolitan areas were used to derive the national average without
proportional weighting based on population. This National Average
includes a signatory base hourly wage rate (equal to Davis Bacon,
state prevailing wage and/or union shop). Added to that base rate is
a 10% fringe benefit package and 20% for taxes and insurance. It
does not contain overhead and profit.
This rate or any other labor rate published in
this book is not to suggest this is what you should use in your
budget, estimate or bid, or what you should be paying. The sole
purpose of the National Average Rate is to establish a fixed
benchmark to measure and adjust information in this book to your
reality.
For example if the actual rate is $40.00
including fringes and taxes, use it! Divide the actual rate by the
national average rate of $34.00 to get a
labor adjustment factor of 1.176 rounded to 1.18. If your cumulative
total for labor is $100,000 using this book your actual cost for
labor would be $118,000 plus overhead and profit.
Crews:
The labor rate surveyed for this
publication is one journeyman electrician. All of the labor costs in
this publication are based on a crew of one skilled craftsman or
journeyman electrician making $34.00 an hour. What are the chances
of you using a crew of one electrician on a large project? Not
likely! Most likely the project will be installed by a crew of
craftsmen ranging from helpers or apprentices to working and
non-working foremen.
Let's construct a typical crew for a small
elementary school. The estimate for this school is 10,000 man-hours.
The contract documents set the schedule at
350 calendar days. The first step in the process is to find the
average number of craftsmen required to
complete this project on time. This analysis will be a straight
average over the total duration of the
project. Understand in reality more or less than the average will be
required at times as work becomes available.
The schedule is specified in calendar days not
work days. To convert total calendar days to total work days divide
the number of work days in a week by the number of days in the week.
To get the total work days multiply the
calendar days (350) times the work day factor (.7143).
We now know we have 250 work days to complete
a 10,000 man-hour job. If we divide the total man-hours by the
number of work days, we get the number of man-hours per day we need
to complete the project on time.
Divide the total number of hours per day
needed to complete this project on schedule by the number of hours
each craftsman is required to work per day. Although 8 is by far the
most common work day it is not unusual to find some craftsmen having
a 7 or a 7-1/2 hour work day. For this example we will use eight.
The result will be how many craftsmen are required to complete the
project in 350 calendar days.
Crew Composition:
The previous example suggests our crew should be comprised of an
average of five craftsmen for our sample school project. We also
know that the likelihood of our entire crew being journeymen
electricians is rare and not very practical. The crew composition
which we will refer to as the composite crew should be determined
after careful examination of numerous variables
such as labor agreements, state, local or federal mandates, job
type, schedule, complexity, labor availability, pre-negotiated step
increases, raises, holidays, vacations, sick days and existing
employee makeup just to name a few.
To measure the impact on our National Average Labor Rate we will
examine a common five man crew without considering variables that go
beyond the scope of this publication. The crew will be composed of
one (1) working foreman, two (2) journeyman electricians, one (1)
fourth year apprentice and one (1) second year apprentice.
e-Cost does not include or
recommend a crew to use in this publication because of the endless
combinations that can be put together. Our goal is to produce a
fixed labor rate by which the user knows exactly what was assumed
and therefore is not chasing a moving target when applying project
specific modifications to his budget, estimate or bid.
The open shop labor rates
in the Labor Rate Index were derived by using a correlation analysis
of union versus open shop labor rates for the thirty six cities in
our index. The sample size was two open shop contractors per city or
seventy two shops surveyed. Although the open shop wages varied
greatly, even within the same city the best statistical fit was at
75% of the union shop. Only open shop contractors offering benefit
packages including at least seventy five percent health insurance
paid by the owner, paid vacations and at least eight holidays were
included in our survey. In other words only legitimate licensed and
bonded contractors in good standing within their respective
communities were used in this publication.
As a result of this survey
the open shop rate is listed as 75% of the union rate for each of
the thirty six cities. The National Average Rate is derived from the
union rate only.....
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