Half Past Noon

< A Story of Three Builders (Taken from "Running a Successful Construction Company," by David Gerstel, Taunton Press 2002)

Three Builders put up identical small additions. Each of them worked 125 hours at project management and carpentry. After paying for labor, materials, and subcontractors, each had $5,000 remaining, but they viewed their $5,000 very differently.
The least experienced divided his 5k by 125 hours, came up with $40/hr and concluded he had made a "good profit" on the job.
The midlevel builder looked at the $40/hr and concluded "at least I broke even." He figured that, though he had made no profit, at least he had $40/hr to show for his work on the project.
The veteran builder looked at the 5k and concluded, "I lost my butt on this one." He realized that he had lost money three ways:
#1 The $40/hr was $20 less than he would have had to pay (in wages and labor burden) to a good lead to work in his place on the job. Therefore, he had lost about $20 of the value of the labor for every hour he had worked.
#2 He had incurred $1,000 in overhead, none of which he had recovered.
#3 He had no profit to show for the job. He had taken on all the risks and responsibilities of building the addition without any compensating profit at all.
Though only the veteran builder recognized it, all three builders had lost money three ways. They had lost part of the value of their labor, their overhead costs, and a fair profit.>

The first time I read this, I got hung up on the “least experienced” builder scenario. The guy made $40/hr, what’s so bad about that? I finally figured it out and moved on. I was knee-deep in business management, and Gerstel made sense. It still makes sense, but only if you assume this “profit” idea.
Let’s do the math a different way. 5k minus 1k for overhead (cell phone, office, truck, license, etc) = 4k. I will grant Gerstel the overhead point, you need to charge for that. So, let’s add the 1k in overhead and say he charged 6k for the project. 6k minus 1k= 5k/125 = $40/hr. That covers all the expenses that the builder had, and means he took $40/hr home (before his taxes). If he made that wage 40 hrs/week for 50 weeks out of the year, he’d take 80k home for the year. Almost no matter where you live, 80k is nothing to sneer at. It is a very, very nice income.
And here’s another thing, there was a directly proportional relationship between what was done and the money that it cost the homeowner to have it done.
Let’s do the math again, Gerstel’s way. If the guy charged the $60/hr for the wages + labor burden he would have had to pay a good lead, he would be at 7.5k. Then he would need to tack on overhead, 7.5k+1k=8.5k. Then he would need to figure in his profit. Gerstel offers a range of percentages for different types of construction, but 10% is on the low end of his recommendations for the sort of work this project entails. 8.5kx1.1=9.35k.That means that this project, if the veteran had charged what he ought to have charged, he would have taken home $66.8/hr. Do the yearly math again, and you get 133,500k/year.
And the other thing; there is an indirect relationship between what was done and the money that it cost the homeowner to have it done.

The reasons for charging profit, Gerstel says, are:
1 Estimating errors
2 Project delays and disruption due to:
A Extreme weather
B Man-made and natural disasters
C Loss of key employees
D Subcontractor failure
3 Equipment failure and loss
4 Uncharged or unchargeable change order
5 Callbacks and warranty work
6 Difficult and labor-consuming clients
7 Litigation
8 Management errors
9 Recession

When I read this list, several thoughts come to mind. I am a contractor and I know the risks we take first-hand and they are real. But honestly, I just can’t get the risks to justify the profit numbers. #’s 1,5 and 8 are mistakes the builder made, not the homeowner, as is #2D. #’s 4 and 6 are risks that the contractor can either mitigate or simply charge to the client if and when they occur. #’s 2B (the first part), 2C, 2D (Whatever isn’t covered by the above mentioned 2D) and 7 are almost entirely avoidable by certain business practices. That leaves us with #’s 2A, the latter half of 2B, and 3, acts of God and broken tools. In an alternate setup, those could be charged to a customer if and when they are realized. But let’s not think about that yet.
So let’s figure those in. The guy that made 80k could lose 10% of that/year and still make 72k/year. In reality, the guy that made 133,500k/year is going to either: lose 50k of that in the risks Gerstel mentions and still clear 80k or get smart, minimize his losses, and take home 120k (after he loses 10% due to the acts of God and broken tools).
Hot Damn, I want to be a builder! Really though, how can we justify this idea of profit-beyond-wages if we can’t justify it with risks? Why am I entitled to more money than my wages? What is this idea of profit? Where did it come from and why is it built-in, assumed?
This arrangement looks a lot like an insurance policy that the homeowner is paying for. The money all goes into the builder’s pocket until something happens, then it goes to any number of other parties listed in Gerstel’s risk lineup. Let’s say it’s a given that something does happen and the builder loses all that insurance money every year. That’s 50+k every year going to something that has nothing to do with the homeowner’s addition. In this scenario the cost of doing business far exceeds the cost of building. It just seems downright wasteful.
Gerstel’s other point that I get stuck on is #1 in his story. The fact that it would have cost you $60/hr if you hired someone else (I desperately need to figure out how to do italics in this posting setup) = you should charge $60/hr for yourself, even though it does not cost $60/hr for you to do the work. YOU are doing the work, so charge what it costs YOU. Unless this whole thing is based on you not wanting to actually do the work, but to sub it out. If so, then we create a beast where the best-paid guy is the one who figures out how to get other people to do work he could do himself. That beast devalues the worth of the guy who actually does the work. Hmm, this sounds way too familiar. What’s more, in this scenario a sizable chunk (30-50%) of the $60/hr goes to parties that have nothing to do with building (insurance, taxes, workman’s comp, payroll, etc).

Someone will no doubt object to my saying that the builder pockets 70k or 120k. He won’t pocket it because he will take his wages out of that amount and then put the rest back in to the company. That sounds right, but the company is him and he is the company. Otherwise there is this entity out there that Chris described as “pathological,” it has no one’s interests in mind and does no one’s bidding. It’s just out there, making money for itself. This just isn’t the case. Companies make money for people.

So, how about this for a setup: I work for a homeowner, building him an addition. I arrange with him to build it for 10k. I came up with 10k by figuring out how long it will take me to build it at a wage that will support my family, and the materials/subs it will take to complete the project. I also arrange with the owner that he cannot take over my project, and I will charge more if he does. If acts of God slow us down, he pays for it. I also stick to my bid, if he changes anything, I charge for it. But, if I screw something up, I eat it. This means that if I’m good at what I do, I will bring more money home at the end of the job. In a scenario like this, the homeowner doesn’t pay for something he doesn’t get. If it doesn’t snow and take me longer, he doesn’t pay for it. If it does snow and I take a day longer because of it, he pays for it. This setup still gives me incentive to work hard and get better at what I do. The faster I complete the job (due to skill and hard work), the more I make per hour.
I only bring this scenario up to provide an alternative. Maybe it’s not a good one, but I’m sure there are others.The main question I have is the notion of deserving profit-beyond-wages.

Very confused here. I went to HPN, signed in, and I got this thing saying “Hi, Gabe. Whatcha up to?” Is this the new theme?
-Thag

You all remember the boycott of K-Mart in the 90’s? Frank, I don’t know if this reached Canada, I don’t even know if you have K-Marts. The American Family Association got Christians all over the country to purchase their goods anywhere other than at K-Mart. This was due to their ties to Walden Books, who sold/sopported pornography. The boycott was successful (though K-Mart has returned to its old, lucrative ways) , I wonder how much that helped Wal-Mart to become what it is today.

I have yet to set foot inside of a K-Mart. By the time the boycott was over, K-Mart was so pathetic that I never had a reason to go patronize them. Anyway, the principle behind that boycott was simple: you support whatever you give money to. Christians cannot support pornography in good conscience.

My father used to tell me that the battles I would fight would be the same ones he and my mother fought. His generation fought abortion, pornography, homeschooling, and theology. These battles are not over, but we are the next generation and grew up aware of these issues. Our battlefields extend beyond these, our focus lies well beyond these. We fight our parents’ battles by living the way they taught us. Our battles must be fought on new frontiers or we are not progressing.

Economics is one of the battles of our generation. So is food.  What I mean is that if we ignore these fronts, we will reduce the size of the battlefield we hand to our kids. In other words, we will not progress. We will waste the upbringing our parents gave us and the battles they fought will need to be fought all over again.

I remember when the K-Mart boycott was in full-swing, there were discussions of how far to take the issue. Maybe we should stop buying Nikes because they support child labor. It gets messy very quickly. However the mess cannot be used as an excuse to ignore the battle.

We have many potential roadblocks to get past before we can even begin fighting. With the way money works today, how can we even know what we are supporting when we buy a t-shirt or a gallon of milk? How is it possible to support our neighbors with our money when they work at the nursing home, gas station, and Wal-Mart-either places we don’t need goods/services from or places we don’t feel right supporting? If I work for an energy company that uses coal and petrol in a fashion that I am uncomfortable with, what do I do?

In my case, how can I build houses using toxic (at best), unsustainable products manufactured by people I have never met and probably don’t speak English? This is a mess, a big mess.

We have to start sorting this stuff out. We have to start asking questions, talking about it. In short, we have to take a stand. Pick a standard and live by it. Choose your place on this field (there is room for many) and make your stand there. With the knowledge we have today from writers (Berry and many others), our own study, the fruition of our parents’ teaching, and preaching (hopefully I will not be the only one preaching on this stuff), we can no longer plead ignorance as generations before us have. What we don’t know we must search out. What we do know we have to put together and formulate a plan. What are we going to teach our kids about this?

The economic principles we own are not good enough. We buy stuff because it is cheaper and believe in all sincerity that this is a virtue. For some this is ignorance, for the rest of us it is sin. For all of us it is madness. Our basic economic principle is stockpiling money, yet we point our fingers at the corporations and government. Really? Maybe we should examine our accounts and see what economic principles our last ten purchases were made based upon.

From Bringing it to the Table: He (Elmer Lapp, a small farmer in Lancaster, Pa.) is also aware that the pattern of subsistence is a community pattern. He says, for instance, that he deals with the little country stores rather than the supermarkets in the city. The little country stores support the life of the community, whereas the supermarkets support “the economy” at the expense of communities.”

This forces a question I have had for a while. What is the “economy?” The stimulus package Obama gave to America was designed to be a shot of epinephrine into the coutry’s failing economy. “If the economy is good, everything will be fine for us.” This is the dominant underlying assumption of every bit of news we have heard in the last two years. But, this is as absurd as trusting in money. I am angry that I have bought this line to some degree, but it is simply not true. It is a line right out of the liturgy of Materialism.

But what is even more interesting is that it as soon as we recognize this line as idolatry, we have to ask how the economy became a god. Not everything about the economy is bad, but what is this thing? I can wrap my mind around the economy of a family, a business, even a town. But I can’t figure out what “the economy” that is being referred to actually is. It is not the economy of the USA. It is not something that can be mapped or described. It does not describe anything itself.  It is a mystery.

It seems to me that it is a god. It is a colossal distraction in the very least. Why should I feel the need to support something that has no relationship to me? Why should I fear something that no one can describe to me, that I can’t be sure even exists? This is too much. That I should base most of my actions on a day-to-day basis on something that has been conjured up like this is absurd, and culpable.

Let’s say it does exist and it is the standard by which we measure our economic health as a country and as individuals. Why should I make a decision based on the good of the economy (for the sake of the individuals it contains) that clearly does not benefit my neighbors? This is a contradiction in terms. It is a contradiction of ethics. At this point, we are being asked, solicited, even paid to support our economy. Yet this does not help our neighbors, it hurts them (I think on this forum I can safely assert this?). When it comes to this point it is obvious that we can no longer give ourselves to this pursuit or any pursuit that is based on this line.

Hello there Austin, Chris, Davey, Frank and Brian.

We are on the mend from a virus or something nasty, and I have been thinking (and reading). First off, I believe all of us are in town except for Frank, so expect a phone call. My house? My whiskey stock has magically increased over Christmas and there is a shocking excess of tobacco.

Next, I read Wendell Berry’s latest, Bringing it to the Table. I’m sure several of you beat me to it, but I didn’t see anything on the site about it. If you haven’t read it, please do so soon. I am very interested to see how it strikes you. It sorted out some things for me. The great thing about Berry is that it is what he doesn’t say as much as what he does say that carries insight to the reader. I have to be careful here. I am still learning what questions to ask as I said in my last post, so ashamedly long ago. I could easily assume that I have a handle on it now, when in fact I don’t. But reading Berry and Economics as if People Mattered (thanks for that reference, Austin) is helping some things to fall into place in my mind.The thing is, this stuff cannot be left alone in good conscience. If one agrees with it it will be formative for his future (and his generation’s future), and disagreement can hardly be any less.

Also, I intend to actually read your posts, frequently too.

Hello there fellas. Davey, I hope our Mother is treating you well. I have had something on my mind for a while. It’s finally developing into thoughts that can be discussed. Strangely enough, it was provoked into discussion by watching “Julie and Julia” last night. That is a fine movie, it provoked alot of thought and then discussion between Kristen and I.  So here I am to open it up on a larger forum.

I am a contractor. By that I mean I make a contract with people to build something for them, then I build it, and they pay me. If I am to be a successful contractor, I will find ways to increase my profit margins by getting faster, paying less for materials, paying less for labor, and offering a service that customers are willing to pay more for. My only problem is that I don’t want to be a businessman, I want to build houses.

I want to get better at the processes that mark out foundations, set grade, frame structures, set windows, wire outlets, plumb supply and waste systems, install trim, set doors etc. I want to invest myself in learning and perfecting a craft that I enjoy. I want to be an old crotchety guy who can get more done with a hammer in a half an hour than a crew of young bucks can with all their fancy new tools. I want to be a craftsman. My tools, materials, customers, and the transformation of something that isn’t into something that is. That is plenty enough to keep me busy and challenged for at least a couple more years.

But I can’t, I have to be a successful businessman. I have to focus on writing tight contracts, performance agreements, realistic schedules, marketing, overhead, and a host of other things that have no more to do with building than Priuses have to do with saving the ozone. If I don’t do those things I will not get much business, I will not have anybody to work with me, and my customers will not trust me.

Surely this was not the way they used to do it? Craftsmen cannot be businessmen, or they would be poor craftsmen. Is this why the craftsman is a dying breed? Why must there be a middleman, a manager between the guy who wants something built and the guy who builds stuff? It seem that mostly the answer to that last question has to do with people seeing an opportunity to fill a gap and make some money. But why the gap? Why must a homeowner hire a guy to manage the guy who can do what he (the homeowner) wants done? Are people that detached and incapable of managing their own project? Can’t the average Joe who has or can get enough money to remodel his house also hack it enough to get a guy who knows how to use wood, metal and tools to make him a new set of rooms?

The heart of the issue for me is that this “business” model we operate on hijacks the other business that people used to do. I’m not mad at corporate America, I’m not taking the artist’s “me and my paintbrush” reclusion, I just want to pursue what I love doing. Sometimes I’d genuinely rather be driving a dump truck than being a carpenter, because I like driving trucks and if you are a truck driver that is exactly what you do.

The other side of it is the money. Everything is about success, about survival, about making enough money to then go do something else. What about the product? What about being successful at framing? The guy who manages the guys who drive trucks probably doesn’t even have a CDL, much less any idea what to do when the brakes go out on a 60,000 lb truck. But he is there, getting paidto tell drivers to haul gravel by people who want gravel hauled. I know, I know, division of labor. But there is an end to that road too, packed with people who get no fullfillment out of what they do. But hey, whatever makes the $$$, right? People do not care what they do anymore. They just want a job. They just want the security of a paycheck. This is no way to live.  Yetwe have to have a paycheck so that we can buy from the myriad of vendors we get our food, clothes, and stuffs from–and so we can make enough to regularly and one day finally get away from the thing that gets you a paycheck.

Frank, you can probably relate directly to this since you work in a construction company now. Davey, you are interested in political theology and you love talking about capitalism. Austin, you have read some of the weirdest stuff I have never heard of. Chris, you are well aquainted with the business world and businessmen. Brian, you know me pretty well, you know the direction we are headed as a family. Help me out here. I don’t really have a handle on this thing yet, I need to know what to read, what topics to look up. What is the history on this topic? Where did we get this model and why is it so dominant? Is this one of the downsides of capitalism? Where  and when did we get locked into this paycheck system?

This may sound like I’m dissatisfied or disillusioned with my job, like I’m having a mid-life crisis when I’m 25. I am not, I just do not want to carve grooves now that I will run in for the rest of my career or life. I’m starting to run up against things in the Christian business world that don’t jive with the direction we are taking as a family. I also care very much about my profession. I do not want it to get shaken up and emptied out by some god.

I realize I have not stumbled upon anything necessarily new or insightful, but that’s just the trouble. I don’t really know what I’m running into here. I have been rambling on now for over a page, and I’m not sure I’ve actually talked about what I’m trying to get at. So help me out.

-Gabriel

I’ve been reading Hemingway’s short stories and started to wonder: is it ok to write about everything? For sure, there is a story in every situation, but some of them must be off limits. Occasionally Hemingway will write a story with enough sexual detail to force this question to the discerning reader’s mind. He never seems to write the story or the scene just to be explicit or dirty, so he is still well inside the parameters of good old fiction. But there is still a problem with writing about someone having sex. Just because it is consistent with the rest of the story, or just because the author is still telling us something about someone in the story does not justify it.

So what can we write about? What can’t we write about? The writer’s wisdom: “write about what you know” only gets you as far as the writer, and so you have Hemingway writing about things he knew very well. On the other hand, if you read the Old Testament in Hebrew, you will definitely find no examples of avoiding a subject just because it is explicit. In fact, Moses, Solomon, and the prophets were far more explicit than any Hemingway story I’ve read.

I can immediately see one difference between the Old Testament and Hemingway. That is Hemingway tells us about a specific set of characters doing the explicit stuff. The Old Testament tells us about Israel through general comparisons. She was like a prostitute, etc. But then there is Song of Solomon, which is impossible to relegate completely to allegorical-lesson-land. And there is also Moses, who if put in our pulpit today would probably make everyone of us (myself included) uncomfortable.

Maybe it has to do with the intent of the writer? Maybe it is one of those things where the content of the story is only good in proportion to the character of the writer? I don’t know. Help me out here.

The Bible is full of admonitions about money. In the Gospels, Christ frequently warns people about seeking reward for their sacrifices. Pastor Leithart preached on the Parable of the Vineyard Owner recently, and Christ’s reproval of those who want money for security or pleasure. But Acts presents an unusual angle on money, one that doesn’t come to mind as easily.

Acts 19:23-27:

About that time there occurred no small disturbance concerning the Way. For a man named Demetrius, a silversmith, who made silver shrines of Artemis, was bringing no little business to the craftsmen; these he gathered together with the workmen of similar trades, and said, “Men, you know that our prosperity depends upon this business. “You see and hear that not only in Ephesus, but in almost all of Asia, this Paul has persuaded and turned away a considerable number of people, saying that gods made with hands are no gods at all. “Not only is there danger that this trade of ours fall into disrepute, but also that the temple of the great goddess Artemis be regarded as worthless and that she whom all of Asia and the world worship will even be dethroned from her magnificence.”

The Apostles have been busy preaching everywhere they go, and figuring out the whole new Gentile dimension to the Gospel. What they haven’t realized (or maybe they had) is that their preaching is emptying the pocketbooks of those who oppose the Gospel. And this what the Gospel does: provides what is a stumbling block of offense to some and a stumbling block leading to salvation for others.

However, this requires no little confidence in what we believe. Think what you would do if something you did put respected people (that you knew) out of business. Would you be looking forward to speaking with them in public like Paul was? What if they were powerful and could ruin your job? What if they had kids to provide for? What if they were your neighbor or a member of your own family?

There is no easy way out with the Gospel. That’s the point. If you aren’t preaching something that is a stumbling block to the world, then you are not preaching the Gospel. If the way you live does not threaten the livelihood of certain groups of people, then you are living something other than the Christian life.

And this is not the dog-eat-dog philosophy that prevails today. Life is not a zero sum game. So when your faithful life makes someone else’s life difficult, it is not because benefit for you equals bad for someone else. No, this is much bigger than that. When our Gospel-driven actions make life hard for someone else, it is a grace to them. They may not see it that way, then or ever. But the Gospel, through us, has removed one of their crutches, like their wallet. At this point, they are that much less secure, and that much closer to a Savior.

In Zephaniah 3, the prophet says this of Jerusalem: “Woe to her who is rebellious and defiled, the tyrannical city! She heeded no voice, she accepted no instruction. She did not trust in the Lord, she did not draw near to her God…” Zephaniah is composed of several prophecies against Judah and her enemies. Judah has played the harlot and devoured the poor while her enemies have exalted themselves over her. The result of these two types of sin looks pretty much the same: the nations bear the anger of the Lord (Moab especially), and Judah’s predicament doesn’t look much better.

Or does it? The Lord is against the nations for misusing His chosen People. Moab tricked Israel way back when they were traveling to the promised land, and YHWH never seemed to let that one go. In Zephaniah 2:9 He says that Moab will be brought down to nettles and salt pits like Sodom and Gomorrah. And “this they will have in return for their pride, because they have taunted and become arrogant against the people of the Lord of hosts.”

But when YHWH speaks of the judgment of Judah, there is a different tone. This is His people. Their judgment will not be light or any easier than that of the nations, but it does end. More importantly, it comes for a different reason. Judah is judged for not heeding the voice of the Lord, not remembering that He was the one who brought them out of the land of Egypt. And their judgment is designed to cleanse them, to root out the bad and strengthen the good not wipe their name off the face of the earth. God’s judgment of His people is much like excommunication, it’s for their own good.

And this is the God we serve. He is jealous for us and He will rise up as a witness in our favor against the nations. So remember Zephaniah. Remember it when you are being corrected, when you are being driven into a corner, when you are growing rich, and when you think back on what He has led you out of. Because He is jealous, He will not let you return to your bondage. “The Lord is righteous within her; He will do no injustice. Every morning He brings justice to light; He does not fail.” (3:5)

In Numbers 22, YHWH tells Balaam that he should go with the Moabite leaders. Balaam obeys, leaving the next morning on his donkey. But YHWH quickly becomes angry that Balaam is going. This seems a little odd, why is YHWH ok with it, then angry the next day? One possible answer can be found in the story of Numbers 22.

As they are traveling, the donkey sees the angel of the Lord three times, and three times Balaam misses it. Three times the donkey steps aside, and three times Balaam gets angry at the donkey for not doing its job. Notice that Balaam is not by himself, or with only his servants, he is with the leaders of Moab. So the Moabite authorities are watching this series of events.

Now you have to wonder what this looked like to the leaders of Moab traveling along with Balaam. They were probably making jokes about what a moron this guy was and why Balak wants him. That is, until they heard his donkey start talking and saw the angel of the Lord with a sword in his hand. Apparently God had found something “contrary” in Balaam’s way, and this was the reason for YHWH’s anger at Balaam’s trip. While we don’t know precisely what provoked that anger, Balaam’s sudden inability to recognize the Lord is indicative of some effect of being with the Moabite companions. Balaam is hoofing it to meet Balak, and he’s doing so with the elite of the Moabites, at the Moabite King’s request. Suddenly he finds himself confronted by a talking donkey and an angel with a sword. Never mind the blind prophet ironies at this point, God thought it was necessary to utterly humiliate and nearly annihilate Balaam in front of the Moabite princes just to tell him “speak only the word which I tell you,” which He had already told Balaam in verse 20. This draws our attention to speaking only the word of the Lord.

There are many times when we find our presence being requested by Moabite princes. They want our approval, our help, our time. If we are living right, we will acquire good reputations for different gifts and skills. Sooner or later, someone who’s fighting the Church will want those gifts to aid their campaign. These people will be powerful. They will be famous. They will also be sneaky and used to trickery. They might be clients, governments, colleges, or even neighbors. The lesson of Balaam is this: do not forget that we are to speak only the words God puts in our mouths. His glory and fame, not Moabite approval, is what we are after. And this is much bigger than just our own sanctification and personal salvation; making sure than God’s words alone are in our hearts and on our lips protects the rest of the Church. Again learn from Balaam: God guards His people and will strike us down if we proceed in such a way that harms them.