4 ms·

I bet if it was $100k salaries for ALL technicians there would be no shortage. Of course this would cut into profits.

missedthecue 3y ago
It would do more than "cut into profits", it would inflate repair and maintenance bills for your average person dramatically. For automobile servicing, labor costs are about 50% of the bill. Double salaries from $52k national average to $100k and everyone is now everyone is getting hit with 25% higher costs at the mechanic. That money has got to come from somewhere. And for all the owner-operated mechanic garages out there, which is probably the majority of them, their profit IS the labor bill. "cutting into profits" while raising salary are literally opposite concepts.
- rat9988 3y ago
  if it's owner operated then the owner isn't concerned by this salary discussion.
- notyofriend 3y ago
  Mechanics rates are over 100$ at even the cheapest shop. The overhead rate is over 60% which is kind of the problem. At dealers the overhead rate is probably close to 80-90%. There just isn’t enough pass through for folks doing the work
s1artibartfast 3y ago
What do your think the profit margin is for mechanic shops and most service businesses?
- mindslight 3y ago
  If we consider the 'profit margin' to include all the white collar make-work jobs that aren't performing the actual work, then pretty damn high. Last time I was at a stealership there was a whole line of people just sitting at desks pretending to be shop techs but actually just doing customer management. Never mind the entire behind-the-scenes management structure. Or you call a plumber for a simple repair and there goes one kilodollar, while the guy doing the work gets a few hundred of it. The rest is all going to the overhead of phone answerer, scheduler, manager, business entity owner, franchiser, etc. I suspect the majority of "cost disease" is going to such intermediaries, and the thing about intermediaries is they know their main job is maintaining their position.
  - JumpCrisscross 3y ago
    > suspect the majority of "cost disease" is going to such intermediaries The trades are relatively efficient at forming new entrants. Most of the plumbers, painters, carpenters, et cetera I've worked with ran their own businesses. That didn't make them cheaper.
    - mindslight 3y ago
      My second example there was Roto Rooter [0], so along with the stealership [1] these aren't examples of vibrant competition allowing for new entrants. But the fact they can have this outsized overhead and yet still have customers demonstrates something, even if not universal about the entire market. I think this somewhat ties into business discovery getting harder. There was a period where the Internet was making this better, but has now been seemingly completely locked down by web spammers and the surveillance-adtech industry making it into a pay to play game (aka more overhead). I'm halfheartedly in the market for contractors myself, and it seems like the best way to find leads is to sit down for lunch at a restaurant next to a main road, and write down the phone numbers on the trucks going by. At least that only requires people to spring for the fancy truck wrap, rather than the fancy website and surveillance-based advertising. [0] My aunt's drain was slow and I was too swamped to look at it, so that's who her helper ended up calling (sigh). If I had known the bill was going to come to $1200 for installing 12 feet of PVC pipe, I would have made the time. [1] Warranty recall.
      - JumpCrisscross 3y ago
        > halfheartedly in the market for contractors myself The good news is, in most towns, you only need to do this once. From there you can rely on referrals.
      - notyofriend 3y ago
        1200 is cheap. Your paying 300$ for the pipe and 900 for the 3x2x12 trench they had to dig
        3y ago
- tuatoru 3y ago
  It all goes on liability insurance. And other insurances.
rasz 3y ago
Fixing cars is already expensive to the point minor damage requiring skilled labor is considered full write-off sending vehicle to a salvage auction.
yumraj 3y ago
> I bet if it was $100k salaries for ALL technicians there would be no shortage. OTOH, at some point outsourcing will become a viable alternate. Pack up all the cars that need expensive repair, ship them to Mexico for fixing, ship them back once repaired.
- DamnYuppie 3y ago
  You under estimate the cost of transportation, that alone would negate any benefit most people would reasonably obtain from wage arbitrage.
- notyofriend 3y ago
  You would think that would be viable in San Diego but even there it’s not

It would do more than "cut into profits", it would inflate repair and maintenance bills for your average person dramatically. For automobile servicing, labor costs are about 50% of the bill. Double salaries from $52k national average to $100k and everyone is now everyone is getting hit with 25% higher costs at the mechanic. That money has got to come from somewhere. And for all the owner-operated mechanic garages out there, which is probably the majority of them, their profit IS the labor bill. "cutting into profits" while raising salary are literally opposite concepts.

rat9988 3y ago
if it's owner operated then the owner isn't concerned by this salary discussion.
notyofriend 3y ago
Mechanics rates are over 100$ at even the cheapest shop. The overhead rate is over 60% which is kind of the problem. At dealers the overhead rate is probably close to 80-90%. There just isn’t enough pass through for folks doing the work

s1artibartfast 3y ago

What do your think the profit margin is for mechanic shops and most service businesses?

mindslight 3y ago
If we consider the 'profit margin' to include all the white collar make-work jobs that aren't performing the actual work, then pretty damn high. Last time I was at a stealership there was a whole line of people just sitting at desks pretending to be shop techs but actually just doing customer management. Never mind the entire behind-the-scenes management structure. Or you call a plumber for a simple repair and there goes one kilodollar, while the guy doing the work gets a few hundred of it. The rest is all going to the overhead of phone answerer, scheduler, manager, business entity owner, franchiser, etc. I suspect the majority of "cost disease" is going to such intermediaries, and the thing about intermediaries is they know their main job is maintaining their position.
- JumpCrisscross 3y ago
  > suspect the majority of "cost disease" is going to such intermediaries The trades are relatively efficient at forming new entrants. Most of the plumbers, painters, carpenters, et cetera I've worked with ran their own businesses. That didn't make them cheaper.
  - mindslight 3y ago
    My second example there was Roto Rooter [0], so along with the stealership [1] these aren't examples of vibrant competition allowing for new entrants. But the fact they can have this outsized overhead and yet still have customers demonstrates something, even if not universal about the entire market. I think this somewhat ties into business discovery getting harder. There was a period where the Internet was making this better, but has now been seemingly completely locked down by web spammers and the surveillance-adtech industry making it into a pay to play game (aka more overhead). I'm halfheartedly in the market for contractors myself, and it seems like the best way to find leads is to sit down for lunch at a restaurant next to a main road, and write down the phone numbers on the trucks going by. At least that only requires people to spring for the fancy truck wrap, rather than the fancy website and surveillance-based advertising. [0] My aunt's drain was slow and I was too swamped to look at it, so that's who her helper ended up calling (sigh). If I had known the bill was going to come to $1200 for installing 12 feet of PVC pipe, I would have made the time. [1] Warranty recall.
    - JumpCrisscross 3y ago
      > halfheartedly in the market for contractors myself The good news is, in most towns, you only need to do this once. From there you can rely on referrals.
    - notyofriend 3y ago
      1200 is cheap. Your paying 300$ for the pipe and 900 for the 3x2x12 trench they had to dig
      - 3y ago
tuatoru 3y ago
It all goes on liability insurance. And other insurances.

rasz 3y ago

Fixing cars is already expensive to the point minor damage requiring skilled labor is considered full write-off sending vehicle to a salvage auction.

yumraj 3y ago

> I bet if it was $100k salaries for ALL technicians there would be no shortage. OTOH, at some point outsourcing will become a viable alternate. Pack up all the cars that need expensive repair, ship them to Mexico for fixing, ship them back once repaired.

DamnYuppie 3y ago
You under estimate the cost of transportation, that alone would negate any benefit most people would reasonably obtain from wage arbitrage.
notyofriend 3y ago
You would think that would be viable in San Diego but even there it’s not