[HN Gopher] America's new millionaire class: Plumbers and HVAC e...
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America's new millionaire class: Plumbers and HVAC entrepreneurs
Author : hhs
Score : 70 points
Date : 2024-10-13 15:35 UTC (6 hours ago)
(HTM) web link (www.wsj.com)
(TXT) w3m dump (www.wsj.com)
| hooverd wrote:
| Can this be the next thing tech democratizes?
| gjsman-1000 wrote:
| Nope. The average tech worker would be screaming about these
| working conditions being unreasonable for any human by the end
| of Day 1.
|
| I'm being partially sarcastic, but partially honest in that
| tech workers are often ludicrously blind to how good they have
| it.
| doubled112 wrote:
| "Shit rolls downhill" is different in plumbing. Much more
| literal. You might be standing in some. You might have to
| stick your hand in some.
|
| A lot of people just aren't ready for that kind of work.
| gjsman-1000 wrote:
| I worked when I was a teenager digging a 6 foot pit under a
| house, that was located next to a stream. Almost no
| visibility, pit filling with water as you dig, almost no
| room to shovel dirt out. I also worked on the 12th story of
| scaffolding grinding out mortar joints on bell towers.
|
| I have little respect for when people complain that just
| coming into an office will affect their mental health
| outcomes.
| doubled112 wrote:
| Some people's tolerance for "stress" makes me question
| how we ever got this far.
|
| Not quite the same level of hands on, but I spent some
| time working in chemical plants.
|
| The safety training includes "you will die" many times.
| What do you do if you hear an alarm? What do you do if a
| cloud of ammonia comes your way? Where are the escape
| bags? Which way does the wind sock show the wind blowing?
|
| Stories about people being shredded, falling, poisoned,
| dying, etc.
|
| Reverting to snapshot when a maintenance goes poorly is
| just not the same kind of stressful.
|
| Quick edit: I do, however, find office life stressful.
| I've never been happier overall than when working from
| home. Those stresses are real too, but different.
| bryanlarsen wrote:
| > I have little respect for when people complain that
| just coming into an office will affect their mental
| health outcomes.
|
| I have shovelled many tons of chicken shit. I have also
| felt the stress of my screw-up jeopardizing a multi-
| million dollar contract the company depends on.
|
| There are many many advantages to a tech job. But
| shovelling chicken shit is better for your mental health.
| gjsman-1000 wrote:
| I didn't say "screw-up jeopardizing a multi-million
| dollar contract" shouldn't cause stress. I totally
| understand that.
|
| I'm talking about people offended just by needing to show
| up and function in a normal office.
|
| If someone is offering me $120K; I'll physically show up
| in a suit if you want.
| bryanlarsen wrote:
| Traffic jams are also more mentally stressful than
| shovelling chicken shit.
| gjsman-1000 wrote:
| You still have to drive to work to clean up chicken shit,
| unless you live with your employer.
| bryanlarsen wrote:
| Generally no traffic jams in places near chicken shit.
| feedforward wrote:
| How ludicrously blind are the heirs who collect dividends on
| Oracle stock to how good they have it?
|
| I guess the workers doing the work and creating the wealth
| are lucky that Steve Jobs, Eric Schmidt etc. illegally
| conspired to do wage-fixing so that they and the heirs they
| work for could get more of the wealth that others created.
| raziel2701 wrote:
| How would tech do it? Uber for plumbers? Theranos for
| electricians? Juicero for HVAC?
| toast0 wrote:
| The trades are pretty democratized as it is. Every service
| company I use with is hiring at all levels. Training is
| available. If you have to get a certificate before you start,
| that's a barrier to entry, but a nearby community college is
| likely to have classes.
|
| The real barrier is it's a hard job, and other work is more
| tempting for a lot of folks.
|
| Tech for trades either looks like a centralized dispatch
| service that takes 10-30% of the fees and results in a new
| person showing up for every job (no thanks! Once I find a
| plumber I like, for non emergency use, I prefer to work with
| the same one) or maybe something per company that helps
| organize appointments, scheduling, billing, and notifications
| about arrival times. This may reduce / eliminate office
| managers / answering services for busy firms, and could help
| improve communications for owners that have no employees; but I
| think it already exists.
| HPsquared wrote:
| There's also potential for planning / drawing / information
| tools. Augmented reality and stuff. Knowing and recording
| where the pipes and things are. Sourcing materials. Things
| like that.
| pjbk wrote:
| https://archive.is/GkBGi
| jacknews wrote:
| "The wave of investment is minting a new class of millionaires
| across the country, one that small-business owners say is helping
| add more shine to working with a tool belt."
|
| How naive. PE does not enter a market in order to make existing
| workers into millionaires, but to create a monopoly/monopsony
| where they can gouge both customers and employees, to extract
| maximum profit. Quite often, the goal is not even to run the
| market sustainably, but just to produce optical profits for a
| quick resale.
|
| A few local contractors may get bought out and become
| millionaires, but everyone else will be impoverished.
|
| We can probably even predict some next steps. They will recommend
| and lobby for various 'safety' regulations or certifications that
| would be difficult for smaller shops to meet, and then pressure
| commercial landlords, housing associations, etc to require those
| certifications.
| halfcat wrote:
| Exactly. Eventually regulatory capture begins and eventually
| enshittification.
|
| No one can start a new plumbing/HVAC small business. Your only
| option is to go work for Walmart (metaphorically speaking).
| SoftTalker wrote:
| > No one can start a new plumbing/HVAC small business.
|
| This isn't true at all, I know several people who have done
| it.
| khrbrt wrote:
| They meant after consolidations.
| raziel2701 wrote:
| I understood OP's comment as once PE comes in, monopolizes
| and regulatory captures, then no one can start a new
| plumbing/HVAC small business.
| Kon-Peki wrote:
| Yeah, I think that's the sentiment. I do wonder how true
| it can be, however.
|
| I wonder how it is in various states, but at least where
| I live the actual plumbers get licensed, not the plumbing
| company. So what can they do to stop it? NDAs? Non-
| Competes? The state also takes a dim view on such things
| until you are paying someone a significant amount of W-2
| money.
|
| SEO? Brand recognition?
|
| Well anyway, a few months ago I shared a table at a
| restaurant with someone that worked at a family office,
| and was buying up landscaping companies. I asked some
| questions in a polite and friendly manner; nothing too
| pointed or invasive. But came away with the idea that
| there is a lot of money out there looking for something
| to do, and not a lot of good ideas.
| sokoloff wrote:
| Creating ever more onerous/costly/time-consuming
| requirements for lengthy apprenticeships or other
| licensing gatekeeping is one common way to restrict
| supply, all while _appearing_ to be serving the public
| interest.
| halfcat wrote:
| Not unless you know time travelers. It's a statement about
| the future, and how this kind of industry consolidation
| tends toward regulatory capture.
|
| So in 5 years or so, we suddenly see laws everywhere that
| require expensive certifications, new kinds of insurances,
| audit requirements, and so on in the name of "safety" no
| one can start a new small business in those industries
| without a team of consultants, lawyers, big auditing firms,
| and so forth.
| Aradalf wrote:
| Are they also as bad at reading as you?
| bebop wrote:
| That has already begun. Saw stop technology is already working
| it's way into regulations. A decent non saw stop table saw will
| cost you ~500 USD. A saw stop saw will be 1200.
| HarryHirsch wrote:
| You can always sell used equipment. There is a thriving
| market for that.
| nasmorn wrote:
| But an average table saw used professionally probably cuts
| more than 700 USD of limbs during its lifetime. So that seems
| very warranted and no, we will just take care very well is
| not a real substitute. That is what at least 10% of our
| parents also thought while we were fathered.
| linotype wrote:
| Seems like a small price to pay to not dismember your
| employees with accidents.
| atonse wrote:
| When this article first came out, I had a similar reaction,
| that it seems that regulations that just favor one company
| doesn't seem all that right.
|
| But I remember in that thread a few had said that as part of
| this, SawStop will be forced to license their patent to
| competitors.
|
| Maybe that'll drive up the cost of table saws, but to be
| honest, people like me (at best, a wannabe weekend
| woodworker, not a pro) have stayed away from Table saws
| because of a concern for safety, but things like Sawstop
| being more ubiquitous might result in people like me buying
| them, and expanding the market, possibly bringing prices
| down.
|
| Sure, Sawstop does nothing to prevent the big issue with
| table saws (kickback) but still, having a riving knife +
| sawstop probably makes a huge difference in the overall
| safety of using a table saw, and that seems worth it.
| bradfa wrote:
| Some local skilled trade companies have been recently bought out.
| From feedback I've heard from customers, quality has declined.
| Lots of car dealerships locally have consolidated lately and
| their service quality has declined while prices have shot up.
|
| While private equity may be making some local business owners
| rich, they're ruining the customer experience.
| infecto wrote:
| Which opens up the door for the next generation.
| oarla wrote:
| With respect to car servicing, I'm getting a deja vu feeling.
| Like smartphones have made it almost impossible to get a
| phone repaired by third party companies, car makers are
| making it very hard to get their cars serviced anywhere other
| than their dealerships where they can overcharge everything.
| With so much (unnecessary?) technology in the cars these
| days, it's easy for them to slap more conditions on the
| owners and lock in services for years.
| CraigJPerry wrote:
| It's not servicing so much as parts. A friend recently had
| a 4 year old car written off by insurance after a minor
| front end shunt. He was incredulous so bought the car back
| from the insurer as part of his settlement BUT the car is
| still off the road because the laserlight headlights are
| just over PS5000 each from BMW and there's no second hand
| ones of the right type available in the UK currently.
|
| It's quite a lot cheaper to rewire the car for the more
| common and cheaper Xenon HID headlight (it's only PS300 2nd
| hand) but a fairly big job with ZERO support from BMW for
| the conversion.
| fakedang wrote:
| To be honest, that's a very BMW problem. Good enough
| reason to stay away from BMW (or any German car really).
| brookside wrote:
| One reason the most minor of collisions are so expensive
| to repair is that car designs no longer include bumpers.
| somerandomqaguy wrote:
| They might not have a choice but to do so.
|
| UN Regulation 155 and ISO/SAE 21434 are going to require
| that intra-car communications require some sort of
| authentication system between computers. It's regulations
| attempting to get ahead of potential hacks for Vehicle to
| Everything (V2X) infrastructure.
|
| Unfortunately this likely also means the ability to replace
| failed ECU's on a car will be only limited to car
| manufacturers willingness to explicitly authorize a part to
| be installed into a car, even genuinely OEM parts straight
| from the manufacturer. Don't know when it comes into force
| but it's on the way.
| tocs3 wrote:
| I have always assumed that as service (or products) get worse
| consumers will start looking for alternatives. This does not
| seam to be happening. It might be the alternatives are run
| out of business and are doing something else now. Maybe
| consumers have a hard time finding alternatives, as in
| independent contractors do not show up at the top of the
| search or are not in the app. Maybe it just cost to much and
| pays to little to be an alternative. I do not see a lot of
| open doors.
| ghaff wrote:
| Good contractors are hard to find. My longtime one retired.
| For a bathroom refit a few years ago, I eventually booked
| through Lowe's. He got the job done but communication was
| terrible and his plumber was awful. I live in a fairly
| small town and I can probably get decent recommendations
| through Facebook these days.
|
| For recent remodeling though it turned out my housekeeper's
| husband is a carpenter and I just coordinated a number of
| things myself.
| bradfa wrote:
| It's definitely harder to find the indy tradespeople now.
| My tactic has been to spend a bunch of time reading
| reviews. When the same first name of the tradesperson keeps
| showing up in the review then it becomes clear it's a one
| person company and I'm much more likely to hire them.
|
| If you are the business then you have incentive to do a
| good job. I have more faith in getting a quality job done
| by someone like that.
|
| I used to have an HVAC guy like this. I currently have a
| plumber and a car repair shop like this. I can DIY the
| smaller things but I know my limits so it's frustrating
| when finding good help is difficult.
| antisthenes wrote:
| I wonder if that's the reason my HVAC guy tried to charge me $700
| for running a thermostat cable less than 8 feet (that I later did
| myself in less than 30 minutes).
| SoftTalker wrote:
| This is the typical trade tactic for rejecting a job that is
| too small to be worth your time. He still has to come out to
| your place, with his truck and tools, and install that 8 feet
| of cable. He could spend that same overhead doing an 8 hour,
| much more profitable job.
|
| So he bid an outrageous amount. If you had said yes, he covers
| his overhead. If you reject it, he does something more
| profitable with his time.
| asdefghyk wrote:
| RE ".... If you had said yes, he covers his overhead..."
| Really - a overhead of several hundred dollars. Seems far
| fetched to me.
| RyanCavanaugh wrote:
| It's not just the overhead of showing up, it's the
| opportunity cost of not doing contiguous hours at a bigger
| job. It's very difficult to fill up a day with 45-minute
| jobs all over town, so he's basically working part-time if
| he takes a small job.
| ghaff wrote:
| Even easy job is probably going to take a few hours between
| scheduling overload, driving to and from the site, figuring
| out what needs to be done, and actually doing the work.
| Expensive? Possibly. But doesn't seem out of bounds. How
| much would you charge to drive to an office to solve some
| problem even if it turned out to have an easy fix? I can't
| imagine quoting much less than that.
| bryanlarsen wrote:
| Let's say he can do two such jobs per day and has 50%
| overhead. That puts his hourly rate at $700/4/2 = $88.
| That's good money, but it's probably less than what you
| make.
| somerandomqaguy wrote:
| Overhead which probably includes warranty of the work and
| materials, and liability in case he damages something doing
| the work along with the additional regular costs.
|
| Not to mention there's the possible, "I don't like you,"
| fee.
| sokoloff wrote:
| It takes time (plus money) to drive all over the place
| giving quotes for simple jobs that people end up getting
| multiple bids for and/or end up not hiring anyone in the
| end. Those costs aren't provided as charity, but rather has
| to be baked into the price of the jobs that do get
| accepted.
| Ekaros wrote:
| How much would you charge to fix a what someone calls "15
| minute bug" in office to new corporate customer on other side
| of the city? Considering that you would also take care of all
| paper work involved such as generating invoices and paying
| taxes.
| antisthenes wrote:
| Completely irrelevant, considering my private residence is
| not a corporation and doesn't generate anywhere near the same
| revenue. Nor does the "bug" involve having several months of
| context on how an IT system operates.
|
| Nor does it entail the same amount of liability in case
| something goes wrong. The failure mode for running a cable
| is...there's no cable connecting the 2 points.
| ghaff wrote:
| The fact that a company has more money is what seems
| irrelevant. Messing with electrical wiring seems like more
| liability than messing with code in most situations. By all
| means do it yourself if hiring someone costs too much.
| carlosjobim wrote:
| People who might not be so brilliant are down voting you
| when you're completely right. A business generating revenue
| can pay much more for help than a private customer, because
| that expense helps them making money.
| xnyan wrote:
| Trade quotes include opportunity cost. Driving to your house
| and doing the 30 minute job could easily eat 1/4 or more of
| their daily billable hours depending on travel time and
| schedule inefficiency. Opportunity costs can vary widely
| depending on lots of factors,
|
| The other issue was in most jurisdictions homeowners get
| exceptions on licensure requirements for small jobs done in
| their own home, a pro has to cover this cost. Also I'm guessing
| you didn't need to pull a permit for the low voltage line, very
| possible one was not required but not necessarily.
| nasmorn wrote:
| That is exactly what I am charging if some client wants me to
| do some crap on their website that takes me 2 hours. And my
| only overhead is needing to invoice them and switching from
| another project. Because I rather make progress on some project
| that actually pays my bills long term
| SoftTalker wrote:
| There are several tradespeople I know (electricians, plumbers,
| carpenters) who make more money than I do. But I don't begrudge
| them that, electricians do work where a mistake can literally
| kill you, and all of these jobs have high injury rates and will
| wear your body down much faster than sitting at a keyboard.
|
| Edit: and there are no "open source" tools. You have to buy them,
| and good ones are not cheap.
| orwin wrote:
| Carpenters too? I'm not from the US but this is a crowd I know
| and talked to quite a bit, at least in western Appalachia. It
| seemed to me they are shafted quite often, as big companies
| hire them as subcontractors 90% of the time and underpay them.
| The last 10% another tradesman/local architect get a contract
| and hire them directly and they earn almost twice their usual
| pay but that's a small minority of their contracts.
| infecto wrote:
| Agree. Carpenter is the lowest of the trade skills unless you
| are in a specific niche.
| SoftTalker wrote:
| Rough framers cutting and nailing together dimensional
| lumber, yes I agree that is entry-level work does not pay
| very well. Skilled carpenters who can do things like design
| and build a beautiful deck or flawless ornamental woodwork,
| built-in cabinets, or custom furniture, or solve a tricky
| framing issue in an expensive historic renovation earn much
| more.
|
| I should add that all the people I know who are earning
| really good money in the trades put in some years,
| established a solid personal reputation in the area, and then
| started their own businesses.
| from-nibly wrote:
| If it was entry level work my house wouldn't have the bends
| in it that it has.
| sokoloff wrote:
| I'm not sure I follow. Perhaps your house has bends in it
| _because_ rough framing is entry-level work.
| orwin wrote:
| All woodworkers are not carpenters. Also to make furniture
| you need tools, expensive ones. Some coop exists (i've seen
| one in Ohio) to help independant carpenters do "built-in"
| furniture (especially planning the wood), but most of the
| time it's company material they use.
|
| Also, in the US (at least west appalachia, but it might be
| all of north america), it seems that the logging/milling
| industry has incestuous relationships with the building
| industry, and it seems to be pretty hard to find cheap wood
| from clearcuts if you're an independant. The person who
| hosted me and my familly for two weeks in WV used wood he
| logged himself for his home and dependencies (he was 70
| btw), but even for a contract he got he couldn't use the
| wood from the nearby mill and imported it from Ohio/Canada.
| And it was in 2018 so there weren't as many pressure on
| wood availability as post-covid or right now.
| clusterhacks wrote:
| This general topic about trade workers pops up on HN
| periodically and there is always some discussion about high-
| earning people working in the trades. But I can't find any data
| that actually supports this statement - the BLS numbers tell a
| story that plumbers and electricians make almost exactly the
| median income that full-time, year-round workers in the US
| earn.
|
| I don't doubt that someone who is running a business is earning
| more, this article in the WSJ says:
|
| "At the time that they sold the company, it had 18 employees
| and was bringing in about $3 million in revenue a year. "
|
| This was a plumbing business with two founders, founded in
| 2012. The article goes on to say that PE buys smaller
| businesses like the one above for:
|
| "smaller outfits (such as Rice's), which Redwood says it buys
| outright for an average of $1 million..."
|
| The Occupational Outlook handbook says:
|
| "The median annual wage for electricians was $61,590 in May
| 2023. The median wage is the wage at which half the workers in
| an occupation earned more than that amount and half earned
| less. The lowest 10 percent earned less than $38,470, and the
| highest 10 percent earned more than $104,180." The mean annual
| wage for all occupations in that resource is $65,470.
| mistrial9 wrote:
| in the construction I saw, there were several big groups of
| electricians.. a) ratty, self-employed often with serious
| baggage or obvious deficits.. can be paid well or very
| badly.. insurance is a problem; b) big company that hires and
| fires frequently.. wears a uniform, clean tools and trucks..
| do not expect anything different than the work order, and
| sometimes a pawn in some kind of low-ethics moves between
| developers and service company; c) career, union
| electricians.. involved in very large, slow moving, multi-
| part works.. by the book, can do industrial installation in
| large teams; all manner of insurance, and also health care
| and retirement benefits. Modern times? probably add non-
| English speaking versions of (a) and (b). The pay varies
| quite a lot between those situations.
| throw234234234 wrote:
| There's a number of reasons for that; although I'm not based
| in the US so it vary. The business/self employed earn
| significantly more than someone working under someone else
| where I live. There are also a number of benefits
| particularly tax wise which means you normally need to
| discount a white-collar wage significantly to compare blue-
| collar wages like for like (somewhat like 30-40% at least).
| Official statistics you quote are usually employment and/or
| tax statistics - none which are reflective of the actual
| money available to spend for the trade worker.
|
| Talking to them the common threads are:
|
| - Cash based jobs. e.g. I charge my materials to the business
| (tax expense) and give the customer a small discount (say
| 10%) if they pay in cash. Assuming a 30% tax rate it means I
| can make for tax purposes my income less and my expenses
| more. In the end however I'm significantly ahead - any
| savings I've given to the customer are more than offset by
| tax savings.
|
| - Income splitting: Wife "does the books" after hours, I
| split the income two ways. This way I don't pay as much tax
| in a regressive tax system as I can push myself to a lower
| tax band. If you want a single income family, better to own a
| trade business than be a professional. NOTE: Some
| countries/places support this more than others, if a country
| has good income splitting laws this diminishes this
| advantage.
|
| - Favors: A lot of money is earned by mutual favors rather
| than monetary transfers especially in renovations/etc. e.g. I
| will do the plumbing for your house, and mine, you can do the
| concrete slab for both houses and we will call it square.
| Trades people typically know other trades people and a lot of
| the property can be built that way. No money exchanged, no
| tax paid. But the capital gains from renovations can be
| substantial - and tax of them can be deferred till sale. I've
| seen people earn millions this way, completely dwarfing their
| business income. Capital gains in most countries is also
| taxed at a lower rate and there's a lot of exemptions (i.e.
| if you live in it, etc). The benefits of this over many
| renovations can add to millions in extra wealth, none of it
| reported as income and under taxed.
|
| - Asset Depreciation/Write Off: Want that big pick up truck?
| But want to pay the same after tax price as a small hatch?
| Claim it on your business, write it off, and expense it. May
| not apply as strongly in the US, but I've seen workers with
| very expensive cars here for the same after tax price as I
| could buy a simple sedan for. This applies to other things
| like tools for the house, etc.
|
| All of the above reduces the official statistics
| substantially as under reporting, and makes blue collar a lot
| more appealing than it may seem on the surface. I would argue
| a self employed blue collar worker on say $120k would be as
| good as a white collar worker on $200k where I live, maybe
| even more. If you have a family and are a single income
| earner in some countries it makes sense to jump straight into
| blue collar.
| sokoloff wrote:
| > I charge my materials to the business (tax expense) and
| give the customer a small discount (say 10%) if they pay in
| cash. Assuming a 30% tax rate it means I can make for tax
| purposes my income less and my expenses more.
|
| > A lot of money is earned by mutual favors rather than
| monetary transfers especially in renovations/etc. e.g. I
| will do the plumbing for your house, and mine, you can do
| the concrete slab for both houses and we will call it
| square. Trades people typically know other trades people
| and a lot of the property can be built that way. No money
| exchanged, no tax paid.
|
| Indeed, cheating on your taxes can leave you with extra
| after (instead-of?) cash in your pocket.
| ryandrake wrote:
| And posting evidence to a public message board for the
| IRS to find later... that's probably not going to be a
| great long-term money making plan.
| robsh wrote:
| Millionaire class? The article describes a small business owner
| who wants to retire. Meanwhile, the private equity firms are
| going to monopolize the market and raise prices. Sadly, none of
| the 20 or 30 year olds who are actually doing the work will be
| able to buy out their owners business.
|
| Any young tradespeople: form a coop and buy your bosses business.
| Better to be a 10% owner than 0%.
| game_the0ry wrote:
| The private equity + consolidation part concerns me too. Bad
| for the customer and the next gen of small business owners.
|
| I would expect those same PE companies to lobby for legislation
| to make it harder for new start up competitors to start.
|
| We are stupid if we let this happen.
| blackeyeblitzar wrote:
| What we need are new antitrust laws, not only to breakup or tax
| megacorps, but also to breakup consolidation of control from
| investment firms (private equity but also others). Without
| this, there is no real fair playing field for competition.
| carlosjobim wrote:
| Owners would never sell their business to young tradespeople
| for any less than twice the value. The hatred that the old have
| against the young is just too strongly ingrained.
|
| They'll be fine with selling for much less to a "worthy" buyer
| though, such as a private equity firm.
| bryanlarsen wrote:
| - Buying an annuity with the same benefits as a good pension will
| cost over >$1M, so it's not much of a stretch to call anybody who
| was one of those a millionaire too.
|
| - I think the keyword here in the title is "entrepreneur", not
| "plumbers & HVAC"
| dahart wrote:
| I wonder how this article was pitched. Strange messaging, turning
| the news of private equity hoovering up HVAC companies into
| plumbers getting rich? Surely private equity will do what it
| always does, drive up prices, drive down quality, and bail out
| leaving behind a mess if or when it suits them. It also seems
| pretty funny to call it a "class" when they're referring to a few
| dozen business owners, not really trades workers.
|
| Did the plumbers getting rich meme start with Joe the Plumber? My
| cynical hypothesis is that it's a movement to steer people away
| from college fearing a hollowing out of the working class and
| higher wages if everyone's university educated. Are there other
| reasons this talking point keeps circling? Googling multiple
| sources shows plumbers making an average of $60k/year which is
| lower than the average teacher salary in the US. Neither of those
| classes is getting rich and both are feeling the squeeze of
| inflation, no doubt being contributed to by private equity.
| skywhopper wrote:
| These folks are much more important and skilled than your typical
| software engineer at a FAANG employer. Kudos to them.
| blackeyeblitzar wrote:
| So how will this play out in the future? Once PE acquires all
| these businesses, squeezes all the life out of them, and runs it
| at aggressive prices, can any future small businesses pop up to
| compete against them? Or is everyone doomed to buying these
| services from PE companies with poor service?
| hoofhearted wrote:
| My theory behind the big private equity play behind buying up all
| the HVAC companies is that some smart people on wall street
| realized that R22 refrigerant was banned, and basically any
| system using R22 that was installed before 2010 will have to be
| replaced in the coming years because you can't find the
| refrigerant needed to charge your system.
| Ekaros wrote:
| My view is that someone just went over list of industries and
| asked can we afford to get regional monopoly here. That is do
| we yet have enough money to buy out enough of certain regional
| markets to extract enough value to make it worthwhile. Value of
| jobs don't even need to have anything big coming up see
| vetinary clinics.
| bilsbie wrote:
| It seems like it's changing every year. Why can't we just
| settle on one standard and let us start lowering costs again? I
| shouldn't have to pay 10k to replace my AC.
|
| (I like the idea of using propane as a refrigerant.
| Surprisingly efficient. Very cheap. And I don't think there's
| enough to be more dangerous than a grill?)
| sokoloff wrote:
| I think you'll be able to buy R22 for at least another 6 (and
| probably another 11+) years, at which point that system will be
| 20 (or 25+) years old and replacing it won't be viewed as out
| of the ordinary, nor provide a particular bonanza of
| income/profits to HVAC companies.
| chowells wrote:
| The PE play is _always_ "I see people getting good service at a
| fair price. That indicates I am not making enough money."
| nine_zeros wrote:
| It is true that trades work has picked up quite a bit. High
| school kids and their career counselors say the reasons are:
|
| - Well-defined career path.
|
| - High pay as you keep going ahead.
|
| - Union pay and benefits. Incredible stability. Incredible
| healthcare.
|
| - No outsourcing.
|
| - Lots of paid leave. None of that unlimited PTO scam.
|
| - Lot of camaraderie. None of the corporate nonsense where execs
| take it all at the expense of people.
|
| - Opportunity to start your own business at a certain point.
|
| - No large student loan to get started.
|
| While not all kids articulate all these points well, but they can
| tell how their seniors in college are grinding too much for
| little return - while trades people are working hard, taking
| vacations, raising families - and buying homes.
|
| The average tradesperson in a HCOL is a millionaire by age 40
| simply because they could buy a house earlier in their lives. And
| they are able to start families and live a very stable life. Kids
| are picking up on this.
| linotype wrote:
| You failed to mention any of the downsides:
|
| - competition from non-Union labor
|
| - broken body by 50
|
| - fewer jobs than programming (there are multiple times as many
| programming jobs than plumbing, for instance)
|
| - working conditions (no office work, expect hot/cold
| environments potentially far away from family)
| nine_zeros wrote:
| > competition from non-Union labor
|
| Very little. Because non-union workers join the union as soon
| as they see the benefits.
|
| > broken body by 50
|
| As opposed to broken minds by 50 for toxic corporate jobs.
|
| > fewer jobs than programming (there are multiple times as
| many programming jobs than plumbing, for instance)
|
| This is true. But that's because software development is
| considered one large blob while trades is broken into HVAC,
| plumbing, electrical etc.
|
| > working conditions (no office work, expect hot/cold
| environments potentially far away from family)
|
| And yet, they can pick and choose their work for the most
| part. No badging in for 5 day RTO BS.
| clusterhacks wrote:
| "The average tradesperson in a HCOL is a millionaire by age 40
| ...."
|
| This is a pretty bold claim that I'd like to dig into. Do you
| have a reference or source for this? What HCOL are you
| referring to?
|
| I'm quite interested in this whole topic of earnings and wealth
| in the trades. I am quite skeptical that any non-business-owner
| trades person is going to have a significant net worth (or
| earnings) above the general average locally, but maybe you can
| point me at a specific HCOL where the trades are more heavily
| unionized or something that would tell a more interesting
| story.
| nine_zeros wrote:
| Here is BLS data:
| https://www.bls.gov/oes/2023/may/oes471011.htm
|
| Remember that BLS data leans on the lower side. BLS data for
| software also leans lower.
|
| The reason they are millionaires by age 40 is because of the
| value of their houses. They bought early in life.
| clusterhacks wrote:
| This is for "First-Line Supervisors of Construction Trades
| and Extraction Workers." Does this represent the "average
| tradesperson" at age 40?
|
| If we dig into the BLS numbers for the people doing the
| work in what HN tends to talk about as trade workers:
| Plumber - median $61,550 per year [1] HVAC tech -
| median $57,300 per year [2] Electrician - median
| $61,590 per year [3] Framer(Carpenter) - median
| $56,350 per year [4] Bricklayer(Mason) - median
| $53,010 per year[5] Software engineer - median
| $130,160 per year [6]
|
| Of course, these are national numbers. We could pick and
| choose geographical areas to bump up the averages.
|
| It isn't immediately obvious to me what data source could
| give us a good answer to net worth by age for any of these
| careers. That is why I asked if you had a reference for it.
| It's even murkier when looking for data on when someone in
| the trades buys a house on average.
|
| My intuition (and I definitely don't mind being proved
| wrong) is that _high earning, high-ish net worth trade
| workers_ is a story we want very much want to be true. But
| I just don 't think it is, especially if we are talking
| about the average case. [1]
| https://www.bls.gov/ooh/construction-and-
| extraction/plumbers-pipefitters-and-steamfitters.htm
| [2] https://www.bls.gov/ooh/installation-maintenance-and-
| repair/heating-air-conditioning-and-refrigeration-
| mechanics-and-installers.htm [3]
| https://www.bls.gov/ooh/construction-and-
| extraction/electricians.htm [4]
| https://www.bls.gov/ooh/construction-and-
| extraction/carpenters.htm [5]
| https://www.bls.gov/ooh/construction-and-
| extraction/brickmasons-blockmasons-and-stonemasons.htm
| [6] https://www.bls.gov/ooh/computer-and-information-
| technology/software-developers.htm
| tennisflyi wrote:
| Bro, what? BLS has them at $48K/year
| int0x29 wrote:
| I love how they subjected me to a proof of work challenge to view
| their paywall.
| thomasjudge wrote:
| This article and a lot of the discussion fails to make clear that
| there is a big difference financially between being a
| plumber/electrician/hvac tech and owning a
| plumbing/electrical/hvac business
| 1123581321 wrote:
| The whole article is about trades business owners selling for
| seven figures. When employees are discussed it's to say they
| see a 20% pay bump after acquisition but that some owners worry
| about the fate of the workers post sale. What makes it seem to
| be conflating owners and non-owners to you?
| hhs wrote:
| The article seems pretty clear; it talks mainly about the two
| business owners, one is Aaron Rice and the other is Dana
| Spears, as well as the relationship with private equity over
| time.
| ryandrake wrote:
| Seems like every article that sings the financial praises of
| blue collar "tradesman" work fails to make this distinction.
| You don't become a millionaire being a plumber. You become a
| millionaire by owning a plumbing business. Those are two
| totally different things.
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