Quote:Part of the problem with the cost of labor is due to government regulation.  Let's just say for example that the mechanic's wage is $15 per hour.  That's really not the cost for one hour of his time, that's just what he makes "cash wise".  The business owner, in addition to paying his salary has to pay taxes on his salary (SS), pay for workman's compensation insurance, any possible benefits (health care, 401k, vacation time, sick time, etc.).  The real cost for that employee for an hour of work to an employer is north of $50 per hour... just for the employee.

 

Then take into account other expenses that the employer has to pay.  Electric bill, water bill, inspection fees for fire safety, EPA, OSHA, etc.  You also have to figure equipment cost and maintenance.

 

Suddenly, $100 or more for one hour of shop time isn't really unreasonable, and that doesn't include turning a profit.

Speaking from experience managing in the service industry (in California, no less), you're overstating things here. We charged $105/hr. for technician labor, and that brought in a healthy $35/hr. profit. That was after paying the employee (hourly+production), paying for materials, fuel, wear and tear on vehicles and equipment and general overhead. It wasn't car repair, but the basic structure of the organization and employee pay structure was about the same. The main difference was that we paid more on production than in base salary.

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