Originally Posted by KMA-628

Scenario: SERVICE TYPE INDUSTRY

Let's say I charge my customers $25.00/hr for the labor my employees provide (negate taxes, etc.)

Worker "A" is an average producer and gets paid $12.50/hr for an eight-hour day (no overtime). If I can keep at least seven of his working hours billable, I will gross $175.00 for Worker "A". My net profit would be $75.00/hr.

Worker "B" is an above-average producer and gets paid more an hour than Worker "B" (let's say $17.00/hr). I can only charge my customers $25.00/hr. I can't say that the price would be $25.00 an hour if you get my average tech or $35.00/hr if you want my above average tech (even if I try and tell them that the time on site would be less so their bill would probably be less--nobody is going to believe me anyway).

The law of averages says that of my techs, some will be average, some below-average and some above-average. There is no way for me to only keep "above-average" techs. There just aren't enough people out there to fill this role. When I was running crews in this type of situation, one out of five techs was "above-average", the one "above average" tech did get paid more, but our hourly rate was the same, regardless of which tech showed up on site. (plus they were union, so there was nothing I could do there--ever try and get a union worker to voluntarily be more productive, regardless of the pay? I was on a site in Mass. where the union stipulated what the techs made, that they got at least XX hours of overtime and nobody could set requirements for them--i.e. pull 1500 ft of wire a day, they could only be told to pull 1500 ft of wire, time limits were not allowed)

In other words, this idea could not work in a service-type industry. The first step would require that American unions be abolished, which will never happen.