This is a very skewed view of billing and profit. I have worked at consulting agencies as an engineer most of my career, in management for a few years, and have

This is a very skewed view of billing and profit. I have worked at consulting agencies as an engineer most of my career, in management for a few years, and have seen the numbers. There are quite a few overhead considerations you need to take into account. Just in payroll, a $16/hr employee is a lot more expensive than that number. Closer to $30-$50/hr with taxes, healthcare, and other per-person costs. Then add office space, equipment, sales and marketing cost, management, HR. Some management hours are billable but not most. Then consider that most employees don't bill 100% of hours. If we paid an employee for 40 hours, I would be impressed if the billable hours were more than 35 on a good week. (We did not bill for stand-ups, breaks, and other events that were not directly project-related.) Additionally consider the risk factor, that some clients end up not paying for one reason or another, or we comp time due to mistakes, going over budget, etc. We still pay the employee.