Personal experience: how much do builders in America get
Blogger Nikolai Grigoriev wrote in Facebook based on personal experience post about how much builders in the United States earn, and also described how the system of conducting the construction business in America.
Construction salaries in the United States range from $ 12 / hour for utility workers to $ 93 / hour (public works construction, prevailing wage, 1,5 odds for overtime over 40 hours per week). There are many projects for the government, for the army, where the minimum wage for, say, an electrician is $ 62 per hour. All workers, naturally, want to get to such a construction site. But there are also many private projects, for example the Tesla Gigafactory, where, due to the frantic pace of work, a standard operating mode is established 6 days a week, 10 hours a day. On such a project, qualified personnel receive the first 40 hours a week about $ 40 per hour, and the next 20 hours at a rate of 1,5, that is, $ 60 per hour. In total, about 11 dollars a month before taxes, and about ten thousand after taxes.
But this is at a private construction site, where the schedule is very tight and people are in short supply. On a typical construction site, skilled workers earn $ 40 for 40 hours a week, that's about $ 6 before taxes, and about $ 700 after taxes per month. I am deducted 5% of taxes, because I have a large family, from single people - about 650%.
To get to this remuneration, you need to be a good worker, skillful, which is appreciated by colleagues and superiors.
There are also construction sites such as Prevailing Wage and Davis-Bacon Act. At such construction sites, all salaries per hour for each type of labor profession are set by the US government, and are updated once a year. An electrician makes, say, about $ 62 an hour. Accordingly, all hours over 40 hours a week are another half times more. Such workers receive more than top managers in many companies.
All Public Works (roads, bridges, utilities for cities, schools, government buildings, power plants, pumping water and sewers, military infrastructure, etc.) are pay-controlled projects. Therefore, they tend to be much more expensive than private projects. One example is the reconstruction of the UN building in New York, which cost more than $ 2,5 billion. And the lion's share of these costs fell on labor costs.
The demand for labor is now very high in the US construction market. Companies cannot find people for projects, people just run out, there is a construction boom. Therefore, the mechanisms of motivation, attitudes towards employees, their training to increase their efficiency - all this is given special attention.
In Chicago, an hour of work (up to 8 hours, then x1,5) costs 72-75 dollars.
Hours of operation
Almost all construction companies in the United States have the same working hours: at the construction site, everyone works from 6 am to 14:30 pm, and in the office from 7:00 to 17:00. There is a lot of extracurricular work here and there, but at a construction site it is paid at a rate of 1,5, but not at the office.
I think that when a man finishes his working day at 14: 30, this greatly influences the entire socio-economic situation in the country. The second half of the day he can build a house, ride a motorcycle, spend time with his family. A lot of things can do. I think economists greatly underestimate the impact of this factor.
Not a single project in the USA has a section on Civil Defense and Emergencies, and POS as well, energy efficiency, environmental protection, estimates, and other documentation.
As I have long suspected, all this is rubbish. And the design standards are spelled out in the Building Code. And there, too, there is no PIC, GOiCHS and OOS and all this nonsense.
Because the judicial system normally works to settle insurance claims between the parties to the conflict.
And estimates are made only by general contractors and their subcontractors, and they never show them to customers, because the contract price is solid.
A Explanatory Note (in the USA it is called Specifications) - 1500 pages thick, with detailed instructions on which sockets to buy and which manufacturers is aimed, basically, not at the norms, but at the correct determination of the client's wishes and the level of the budget of his project. So that the contractor can calculate the price as accurately as possible.
The composition of the project is described by the “CSI 50-Division MasterFormat” standard and almost repeats the structure of licensing of construction contractors. That is, say, if our company is a Plumbing Contractor, then we open the Plumbing section of the project and the Plumbing section of the specification. And also a general section of the project (General) for all contractors and a general section of the specification (Division 1). And on the basis of these four sections, we calculate the project estimate.
In addition to federal standards, such as the National Electric Code, and state standards, such as California Title 24, there are special standards, for example, for the army, navy, and air forces, this is the UFC, for hospitals this is the Blue Book, and so on. People who are well aware of special standards in detail are highly valued, because these projects are very profitable, but without knowing the standard, it is easy to make a mistake of more than a million dollars. For example, if you do not know what specific conduits, pipes for power and telecommunication cables, are poured with concrete protection with reinforcement, on a project for a naval military base or airfield.
Almost all design codes are written by associations of contractors and licensed design engineers (IEEE, NECA, NFPA, ASME, ASCE, ASHRAE, UL, and two hundred others), based on a historical analysis of insurance claims and under pressure from insurance companies.
Building licenses in the United States are issued only to people, and only then they become attached to the company. Therefore, if such a person left the company, you need to get a new license for another person.
Such a person must successfully pass the 6 hours exam, 240 questions in it, half of the laws, half of the industry, for example, calculate the voltage drop in the feeder 360 feet long at 480V voltage, 260A current strength and 300MM feeder thickness.
To become a licensed design engineer (Professional Engineer), you need to pass two exams (one at the beginning of a career, immediately after university, the second through 4, a year of engineering practice), ten times more complicated than a construction license. With integrals, differential equations and calculations of stress diagrams.
Only such people sign each drawing and put their personal seal on it, not the company. The company simply puts its logo. If something is designed incorrectly and there will be an accident, this engineer will answer. For this, he has professional liability insurance.
In the US construction market, contractors are very deeply specialized in their areas of work. If you look at the official license classifier (Google “CSLB Licensing Classifications”), you will see 46 different licenses. Each has its own exam, its own separate procedure.
As a rule, contractors work only in their narrow specialization. General contractors hire subcontractors, fulfill a set of customer requirements for insurance, bonds, guarantees, and manage risks. Subcontractors, as a rule, deal with one or two licenses at most, and have a general contracting license in order to be able to hire a subcontractor in their work package. Those. for example, if I am an electrician, I will receive a license for general contracting only in order to be able to hire concrete workers who will flood the plates for transformers. Otherwise, if I do not have a license for general contracting, the client will have to hire them directly, and this is often very inconvenient, there are gaps in responsibility in determining those responsible for marriage and accidents.
Working in several completely different licenses is very inefficient, only very large companies can afford it, for example, the Emcor Group, which is run by financiers, and buy many companies around, carrying out their KPI from investors to increase turnover. Practice shows that it is much more efficient to choose a specialization, and work in your niche, continuously improving the quality of services to clients. For example, put the system of ventilation and air conditioning in different states.
In the oil and gas industry, construction licenses do not apply. There is a completely different system of classifications, permits and certifications, in no way attached to military and civilian construction. For example, all electrics are done without a license at all. But many other requirements, first of all, insurance for a large amount, which is very difficult to obtain.
In the US, in the construction business there are no sellers. Every estimator is a seller. It depends on him on 70% whether the company will have a job tomorrow or not. It is he who is responsible for ensuring that the company wins a tender for construction, that not only an estimate be prepared, but also all the supporting documents for the tender. Huge responsibility and subtle skill.
The remaining 30% depend on the decisions of the owner of the company during the competition, as well as on the decisive meeting with the client with intensive coordination of its final requirements.
Each construction company maintains and updates its own price database, in which there are approximately 40 000 positions. Through 10-15, the years of operation of a database of different contractors are very different due to this customization, although at the beginning of the company’s formation, its owner simply buys a ready-made solution, such as Accubid, Conest, TurboBid or McCormick, with an integrated database of his association of contractors based on NECA). All these programs have On-Screen Take-Off, that is, you can remove all the data directly from the drawings in PDF format on the screen. Many companies hire programmers and write their own software (like Turner, for example).
Contractor associations publish books of estimated prices every year, each in its own direction, for example, NECA publishes every year a book of labor costs for each type of work, according to which the electronic bases of estimated prices from electrical contractors are automatically updated, and services such as "TraSer Accubid" are automatically pulled to this classifier of suppliers' prices via the Internet.
The estimate is a hundred times simpler and clearer than in Russia, any foreman in it will figure out what's what. It is arranged according to a very simple principle: for example, the line "Socket 125V, 20A": the socket costs three dollars, and it takes half an hour to install it in the wall. All. No marasmus with coefficients and indices, widespread in my homeland.
The estimate is intended to win the project, and since at the stage of the competition and the struggle for the contract, there is very little time for drawing up the estimate, then all operations for its drawing up should be as effective as possible. The estimate for a project worth $ 20-30 million is made in 5-10 working days, for a project of $ 1-2 million - in one or two days.
Small companies make estimates, which, after winning a contract, can be safely sent to the supplier for packaging and delivery. In large companies, this is a two-step process: first, an estimate is made in general terms to take the contract, and then, if they win, they make a second estimate, already for the daily work on the project, for deliveries and for recording work time and materials.
As the project portfolio and company experience grows, daily adjustments are made to the database. In the database, and change the price of the material, and labor costs. This is not for fun, but is the result of painstaking work and disputes between estimators and production workers, after all, estimators must win the project, and production workers always come to complain that they don’t have enough money for construction. The eternal dichotomy of the construction business.
The project manager receives the project from the estimator who sold it to the client. From this point on, the two main tasks of the project manager are to comply with the construction schedule and maintain the margin at the level set in the estimate. Say, if the margin was 25%, and in the middle it became 24%, then his bosses would begin to grumble. If it falls to 10%, serious problems await him. If it falls even lower, it will be fired, and the market will be told that it was a dummy. Therefore, managers go to all sorts of tricks, how to compensate for the loss or pre-stock reserves in the budget. They themselves are looking for cheaper suppliers, they themselves optimize the project with an engineer and an architect, they themselves conduct difficult negotiations with clients about change-orders. Almost all of the profit problems lie in Labor's inefficiency. Those. work force. Improper planning, incomplete supply of materials, downtime of workers, strikes, accidents, rework of scrap, etc.
The most important type of document in a construction company is a table on one piece of paper, comparing the budgets of the estimate and the actual one for today, with the forecast of the project margin. The project manager updates this table. Once a week, after receiving a summary of the man-hours costs from the construction site (time-sheets) and a certificate of the money spent on the project per week from the accounting department. The second document is the construction schedule.
The project manager is the most valuable and valuable asset of the company, which can easily receive 150-000 thousand dollars a year, sometimes even more. Adequate salary, considering that he is personally responsible for making a net profit of more than three to five million dollars a year. I have not seen at any construction site in Russia that any of the business owners clearly understood this. Usually they pay about 160-000 thousand rubles, this is a good option, which is in the region of 200-350 thousand dollars a year. And this is for projects, including hundreds of millions of dollars with a budget like Amethyst. In the USA, the project manager is, in fact, subordinate to the whole company, everyone who does something on his project. Except for the owner of the company. This is somehow clear to everyone without explanation. His time is more important than the time of any other employee. The post of a project manager is roughly on par with a vice president. The entire process of the company is built around the assembly line for the Materials & Labor of several projects and making a profit from them.
In the US, it is not customary to be rude to colleagues, almost never. In general, swearing is not accepted, because many conflicts end in lawsuits, in which, as a rule, not an employee, but the company must prove that it behaved appropriately. A lawsuit with an employee could easily cost the company about 400 000 dollars. Therefore, do not swear, everyone smiles at each other, and behave very correctly. At the same time, smiles are sometimes obviously strained, but culture of education forces them.
I don’t know about other states, but California and Nevada have the “At Will” law, that is, “of good will”. It means that an employee can leave the company with 10 minutes notice, and the company can dismiss an employee at any time with the same notice.
This law quite disciplines everyone - both employees and the company. The owners of the companies understand that it is possible to lure a valuable staff from them in no time, and the fool understands that they can fire him right at lunchtime today. Perfect market competition.
If a company hires too few people from minority groups, it can be sued for discrimination. Therefore, the composition of companies is very diverse, people from all over the world work.
The more you work in such a very DIVERSE environment, the more amazed you are how many smart people from all countries came to the USA. The more you understand how your perception of other races and cultures was inferior and arrogant. We have very cool guys from Colombia, the Philippines, Korea, Mexico, Dubai, there are guys from Russia, Belarus. They teach me everything they know, for which I am very grateful. And they know a lot of things. Many owned in their own countries their own companies, by 100-150 employees. Ten percent of employees are aimed at starting their own business, especially young people.
Before being hired, each employee is run through four main tests: a written test for comprehension, logic, knowledge of English and the subject of work, then an interview with three or four Senior employees of the company, then a mandatory medical test for drugs, and the last one is a Criminal Background check. and DUI (driving under the influence of alcohol or drugs). This procedure more or less guarantees that the company will hire a good person.
There is an amazing law in the USA, which is not in Russia, called Mechanics' Lien (Builder's Pledge). This is almost the only law that very strongly protects the contractor’s rights to receive money. According to this law, ANY of the contractors, subcontractors, any of the suppliers of equipment and materials, any of the WORKERS, architects, gardeners, socket outlets or faucets, mixers, etc. may impose a DEPOSIT on real estate if he has completed his work under the contract (design, construction, supply of materials, and other improvements), but he has not been paid (and it doesn’t matter who did not pay him).
This is a very powerful tool for getting money for your work.
If you worked, and you were not paid for the project, you register with Registrar (an analogue of Rosreestra) a pledge for the building along with the site, and you have the right to submit documents for the forced sale of this asset and the receipt of your money in 30 days. This security deposit may be imposed on the property at any time, even if the contractor did not receive an INTERIM payment under the contract on time. The deposit is unconditional, the consent of the property owner is not required.
Therefore, in the USA it is very rare to throw contractors and workers with payment by contract or salary (of course, for this they must submit the documents required by this law, for example, Preliminary Drawing, for example, withstand submission deadlines, etc.).
This law has the reverse side of the coin: if you are a homeowner and a contractor works for you, it is YOUR responsibility to ensure that all of its subcontractors and workers have received their money, otherwise your house could be FORCED sold by auction for debt size For example, 700 dollars for repairing a fence. For this, homeowners also have a whole set of tools, which they usually don’t realize.
Business integrity in the United States is not a spiritual and theoretical concept, as in Russia. It directly follows from the daily practices of marketing, production and project closure, is armed to the teeth and has advanced tools for mutual verification of counterparties.
For example, at the stage of the competition for a project, when you are competing with two or three contractors of your specialization, at the stage of opening envelopes and announcing prices, it turns out that prices differ by 3-5%. The requirements for insurance and guarantees are general and the same for everyone. The estimated databases are very similar for everyone, and they are updated precisely based on the results of competitions and the struggle for contracts. The winner of the tender, "Low Bidder" does not just win the competition, its documentation is checked by the second-place contractor and has the right to appeal the results of the tender and cancel its results if he finds something to complain about. If not, he puts a signature on it in the tender protocol (for expensive Public Works tenders, there are also closed tenders).
If the supplier appreciated the delivery of the package of materials to the contractor for the specification, and forgot something, he would have to swallow this loss in order to maintain a relationship with the contractor. If the contractor forgot to count something in his estimate and so won the tender, he will do this work at his own expense.
At the production stage of the work, Material Submittals and numerous inspections of local authorities cannot be avoided. That is, materials and quality of work are fully controlled. Any serious violation leads to huge fines and in the worst cases to Revoking the License. The whole history of serious violations is tied to a license and is available online for everyone, with the names and surnames of people, insurance coverage, etc.
The only time when you can exhibit additional work is the release of new drawings from the architect and engineers (whoever disagrees - all to court). But at the same time, if the prices are raised, the client will hire another company for these works. Loss of face and uncomfortable neighbor at your construction site. It means you need to keep a balance, at what prices to do additional work, so that it would be unprofitable for competitors to go out and work with you. In fact, unit prices for change-orders are about 40-60% higher, and usually there is not much additional work.
Salaries to workers are paid once a week, if you try to cheat with them, then your company will end its existence in four months. Not an option.
At the stage of closing a project of a company, it is very important to go out without any courts and with good relations with a client, because otherwise you can lose four to five years of life, communicating with lawyers instead of clients, and lose several million dollars. One of my acquaintances bankrupted his general contracting company because of a case on 2 million dollars (it was much cheaper to do than to continue working, because the project’s legal case grew like a snowball, he had to lay his house in the bank to pay the workers) mass phenomenon in construction.
Do not forget that the average American in the house is more than 5-7 units of various small arms, from pistols to sniper rifles and heavy machine guns. So with gross deception, living in the world becomes simply dangerous.
Thus, if everyone in the company honestly performs their duties and does not lie to the client and the authorities, then the company thrives and develops. Direct consequence, without need of someone to convince in the theories of psychoanalysis. Honesty is one of the main, massive financial variables in the equations of business optimization functions.
A direct result of a superior section, talent, intelligence, quickness, connections, in a good sense of the manager's tricks and market conditions for any successful company is the achievement of the indicator of its main optimization function: the planned profit on the project.
Small companies (“Mommy & Daddy Shops”, as they are called in the US in local slang), earn 30-70% of pre-tax profits on projects, that is, according to the formula (price of all materials + labor costs + cost of all subcontractors + cost of use equipment) * (from 1,3 to 1,7). On average, about 1,5. After taxes and office maintenance, about 25-30% remains. But the projects of such companies are small, up to 0,5 million dollars, and 90% of the projects do not even reach 50 thousand dollars. This type of construction company is classified as a Service Company.
Huge companies with a turnover of several billion dollars (like Skanska, Emcor, Jacobs) earn about 5% to 25% before tax, depending on the project (using the same formula as above). I think the exact estimate of the market average profit figure is around 15%. After paying taxes and maintaining the central office, about half remains, but if the company has a not too bloated staff, and a smart accountant, who is well versed in taxes, then more.
In bad times, when the market falls (as happened in 2007-2009), and many companies go bankrupt, the survivors work for 5% or less, simultaneously collecting the best pieces of the ruined ones. It comes to 0-1%, which makes a lot of sense, because once again you have to re-assemble the team after you fired, it’s incredibly difficult to hire anyone back. But in good times, when there are a lot of projects and people everywhere with fire not to be found, all (suppliers, subcontractors, general contractors) raise the bar for customers to 20-25% (big companies) and 50-70% (small companies) before tax, to accumulate fat until the next market fall. And the market pleases with its constancy and falls exactly once in 10 years.
Many companies in the construction market are 100-150 years old or more (for example, McCarthy, since 1864), so the evolution of “how much does it cost to put brick on brick” has come a long way, and the rules of the game are exactly the same for companies.
Here it is considered in the order of things to bring a child with you to work and show him what you are doing, what you are doing at work. I see children in our office about once a month, sometimes they come in a big, cheerful crowd. It is very funny to watch such processions at a construction site - there is such a chain of penguins, helmets twice as many heads, orange vests almost to the ground, and everyone adjusts their protective glasses on their nose that they dump and slide off. And the eyes look at the foreman in such a way that it is beyond words, they suck the world around into the brain, like a tornado.
My colleague has five children, he somehow six hours three of them explained how the work is done, what the company does.
Many interns. They are paid half as much (about $ 17-20 an hour), they work for three months during their university holidays, and during those three months the company watches them, and they - the company. They still have to study for two or three years, but they are already working.
We bill the customer for equipment that is already in 5 months in stock, and for which we have given a lot of our money. Due to a hole in cash-flow, we cannot pay the same supplier for equipment to other facilities. On other objects, problems start slowly due to creeping deadlines.
The client writes to us that we have not installed the equipment in his building, and does not want to pay (under the contract, he pays for the installed). We begin to swear with him that he himself does not give us the opportunity to have a shutdown for 5 months already, and we ask for meetings. All the nerves, our say: the contract says shutdown, so give it to us. He writes to us that he can not shutdown, because he has about a dozen switchboards that he cannot turn off. No We are all mad and do not understand.
We're going to meet him. A huge medical center, which is over 60 years old. An old Japanese man comes into our elevator, all white hair, an intelligent, modest face with glasses, professorial eyes. It turns out. Busy people are moving along the corridors, half-running, half-step, who are smiling through some subtle tension. We go on floors, talk, study the problem. I walk and snow-white beds with patients drive past me. The patients have tired faces - it is clear that the old man is tormented by pain, the mother has just given birth to a child, more and more different faces are passing by. Rich and poor.
We reach the shields.
They feed the heart of the complex - bright, blinding clean, sterile surgical rooms and spaceship-like incubators for tiny premature babies, weighing 500-1500 grams each, on which human technology is focused with all the power of intelligence. Oxygen, light, robots feeding solutions, pulsating heartbeat lines on screens.
The client tells us quietly: “I can't turn this off in any way. We'll figure out the rest somehow, but this is not possible. " In 10 minutes we develop a scheme for switching these rooms to our generators and huge battery packs of backup power. We agree on where we will put them in the yard, through which balcony doors we will throw thick cables through which energy will flow into these small bodies and to the tips of the surgeons' scalpels. I thought - what are we doing? Why are we working? Why are we installing equipment worth millions of dollars?
Why did the teachers teach us for decades? Why do we argue and swear?
And I have known Zen. That which cannot be expressed in words.
Love, like water poured out of my heart, rushed to the floors, spattered the walls of the corridors, and I went to draw a plan for the arrangement of the generators and the laying of cables.
Read also on ForumDaily:
stdClass Object ([term_id] => 13337 [name] => Our people [taxonomy] => category [slug] => nashi-ludi)Our people
stdClass Object ([term_id] => 13831 [name] => builders [taxonomy] => post_tag [slug] => stroiteli)builders
stdClass Object ([term_id] => 20988 [name] => salary in the USA [taxonomy] => post_tag [slug] => zarplata-v-ssha)salary in the USA
Let's face the crisis together and support each other
Thank you for staying with us and trusting! Over the past 5 years, we have received a lot of grateful feedback from readers, whom our materials have helped to arrange life after moving to the United States. We have big plans, we do not want to stop or slow down the pace of work. Even now…
The COVID-19 pandemic has negatively affected our income, and in order to stay afloat, we have to ask YOU for support. We will be grateful for any amount and will make every effort to continue to publish news and a lot of useful information just as quickly.
Thank you for being with us!
Always yours, ForumDaily!
Security of contributions is guaranteed by the use of the highly secure Stripe system.
Do you want more important and interesting news about life in the USA and immigration to America? Subscribe to our page in Facebook. Choose the "Display Priority" option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram - there are many interesting things. And join thousands of readers ForumDaily Woman и ForumDaily New York - there you will find a lot of interesting and positive information.