Vard01 has commented that "skilled labor costs are getting more and more"

and Urbandad commented sort of the same about the difficulty finding people to do small jobs.

why is that?

aside from the usual BS that comes with working in NYC, driving two hours to a job 5 miles away, the city and state and the courts (legal system) do not create a favorable environment for “free lances” to work. Please allow me to explain:

Prior to having a child and owning a house, i used to work in buildings for others. i was an employee. the organization was responsible for my safety and my potential screw ups: if i left a hammer on the floor and someone tripped on it, their insurance would pay. of course i had all sorts of benefits and other protections in a job like that.

during the period i was working for others, i would do side jobs for $25 an hour and was quite happy doing that (and i did not openly advertise this; it was not my business it was something i did word of mouth and for friends or family). even today, an otherwise clear, pretax 25 or 30 an hour looks very attractive considering all the BS a free lance business owner has to go thr ough:

when i had a child and bought a house, that was when it all changed:

First, the city views single operators or “free lances”, as an “HIC Contractor” and the city only sees two classifications “licensed” and “unlicensed”. the courts do not recognize any standing for an unlicensed contractor and the city can sieze the vehicles of unlicensed contractors (and perhaps the tools? my tools are worth a lot more than all the vehicles in this house combined). so right away for me to go and put up a storm door for one person in my neighborhood and charge them more than $500 (or is it 250?), if i am unlicensed, i am breaking the law and the threat of enforcement exists.

i own a house. to protect that, business owners like myself form corporations. that means we have to file tax returns for the corp, no matter what – even if i do $3,000 worth of work in a year or $0. we have to buy software for that and spend a long morning doing it. Most of us have state sales tax numbers and there are benefits to that – but we have to file that return.

the fear exists that certain other things can go wrong:

if we injure someone, someone’s attorney or an insurance company’s attorney can find a way to “pierce the corporate veil” or if we drop something on the sidewalk and someone’s child trips on it and they can sue us personally. So what do we do? carry insurance.

add to this vehicles. we hit a point when we do this and have the trouble of the license and expense of insurance that we cannot justify knocking around the neighborhood working for people word of mouth so we are forced to expand. you have to invest more and travel further. so now we need vans. we have two options here: buy a new van and maintain an auto loan and collision on that van or own two used vehicles so if one breaks down and we have to get to a job, we have backup. there’s the expenses for all that. (i do the latter because i am mechanically inclined and that takes time). and guess what, using the vehicles daily for work, carry a thousand pounds worth of tools plus materials and a person on NYC streets? the vehicles wear different than the car used to run to the grocery store or take out of the city on a weekend.

if i were working in houses, ripping out moldings like i used to do and disturbing lead paint surfaces i would now have to take a $200 lead paint course and pay 150 for myself and 150 for my tiny 1 person corporation for the privilege of removing lead paint.

If i were the sole income earner in this house, i would also have to worry about a couple of other things. basically business interruption and by that i mean unemployment and disability. the unemployment insurance is cheap and i used to pay into it. but the disability insurance for what i do is very expensive, even for say $2500 a month in protection. If i were the sole income earner living as i do in NYC, 2500 a month is nothing.

i will not even go into the cost of tools for someone running a business who has responsibilities to a customer, but in my little business, there are two and three of everything; a detour to HD for a new saw could cost a lot of money.

I have not included everything here. the list goes on with all sorts of annoyances and petty expenses that someone working alone has to deal with. I consider myself fortunate to have found a way to deal with all of this – i have specialized and doing so i can justify my prices. But that WORKS FOR ME. it does not work for everyone and guess what, it does not work for most people reading this because all sorts of people are on here all week long with issues that people like me have at one time or another dealt with in their lives but since we do not do them daily, we are not organized enough with parts and tools and muscle memory to go out and do them for people and look professional and make money. and it hurts everyone reading this but there is little we can do about it.

all the result of a one person operation.

basically what i am telling people about this is, if someone had no assets they had to protect, they could knock around brooklyn and work for $30 or $35 an hour part time absolutely no benefits or legal protection, and be very happy. as soon as they have to protect something – their health or a home or family – the minimum cost to run a small one man business is $1,000 a month before purchasing gasoline for the vehicle and they can not do that part time. thank the city, the courts, the litigious nature of people for that-

in suffolk county, i can see someone doing part time work on some one’s house without insurance. you can be walking to the house and drop a hammer and leave it for a minute while you set the other stuff down on the steps. here, if you drop something on the sidewalk and cannot pick it up right away, 5 children can trip over it in five minutes. people need insurance here. drop an extension ladder in suffolk county and it lands on the shrubs. drop one here and its over an 1880’s iron fence, on someone’s mercedes suv, on the kids sitting on the stoop next door.

This was interesting to read. I like to use the illustration of an Iceberg. You only see a portion of what goes into a service.

@chris: the older i have gotten and the further along i have gotten in my career, i have felt more comfortable sharing things like this with the customer base. previously i did not want people to think i was complaining or unhappy (i am not). what i am learning is most customers do not realize the challenges people who do the work or own small companies face (i would hate to see the insurance bill for a plumber or electrician; a roofer running two three man crews once told me his liability was $95k a year). People also do not realize how competitive the industry is and how bad actors, people willing to break laws, impact what honest contractors can charge. the reason for all the regulation is because of the bad actors and they still continue to move around the city without any fear because the city only seems interested in enforcement if someone has tangible assets or they can find a way to squeeze a $10,000 fine out of them. there is a lot of discrimination with the enforcement and the optics are not good.

it is bad for us and bad for the customers. it p ushes talent away.

For talented youth to consider this kind of work, we need unions. a union mason or electrician gets $92 an hour with benefits and on top of that they are covered by unemployment and have the employers share of fica paid. but the political environment has not favored unions in decades and it is not getting better- the current administration says one thing and does the other and the previous administration was an all out disaster for small contractors and workers.

i would like you to write a blog 🙂

You can hire painters without all that, they use ladders and hammers and screwdrivers and such. Just saying. I think it’s more about the cost of living in NYC. Back in the day, you could get a little apartment and make the rent on odd jobs. Also, people knew how to do odd jobs. But you don’t really have that group of folks anymore. The folks living in the low rent apartments, which are still insanely expensive, are kids who never really learned how to hold a paintbrush or use a miter saw. But yes, handyman work is probably mainly an area for folks who don’t have a lot of assets to worry about. But it’s also not a job that’s likely to generate a lot of assets for you, so there’s that.

urbandad: the painters should be carrying liability to protect themselves, they do not need a license. anyone reading this who is an employee someplace would be loathe to think they had to be responsible for something that might go wrong – an accident – at the office or something that someone on their team did wrong and have to think that the corporation they work could not cover on the job liability – the wheel breaks off the office chair and they fall back and hit their head. stuff happens. i spend a lifetime explaining this to workers – why we can’t do this and that and that i am responsible if it goes wrong – and i still have to worry that i might walk to the hardware store or corner shop and come back and the police and an ambulance out front (working alone is so easy and relaxing). i am dealing a 38 year old educated (american; he knows how litigeous people are here; people from europe and south america often don’t) and i have explained “responsibility” away to him until i am blue in the face and he still does not understand that if a company is involv ed and there are assets and lawyers get involved, it is going to get messy and they will punch holes in every defense. people at my level do not have the resources to defend lawsuits. part of the attitude has become that if someone can make it someone else’s problem – they will – and it was not always that way (look at the post about someone not paying the rent in full every month).

Some of this is the cost of living. but those who work with their hands have not found a way to justify what they have to get. i managed to do it but it took a long time and a high level of specialization. I still run into people – mostly over here where i live and often civil servants who have caddilac benefits packages and are handed everything they need to do their jobs (and have been in their houses a long time and have smaller mortgages) – who think paying someone who works with their hands (without actually running a company) $35 an hour is a lot – they even bristle or get mad at the mention of it. so as a business owner, if i did not have to travel to brooklyn and tried to charge those same people $65 an hour (which is probably what they get with benefits), they would call me a “gouger” (it happen once). it is not the cost of living that gives them this mindset. these people often drive pricey cars, so the money is there. it is the mindset that makes it harder and the refusal of SOME people to accept that people who work with their hands are entitled to make what a cop or utility worker makes. they balk at it though.

the prevalence of “judgement proof” cheap labor running around the city only makes it harder for people who work with their hands. people get used to paying a painter 25 an hour off the books and they might think paying a wood worker $30 an hour is good. Look at the list above again and see what someone with a sense of responsibility and someone who wishes to retire at 65 and wishes to send their child to college has to make and try to understand that to do this work, and not risk it all, we have to charge $75.00 an hour, minimum, to make 30 an hour.

the cost of living is high, but it is high for everyone and everyone should get paid more as a result and everyone should benefit from this economy.