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Should engineers price gouge
14

Should engineers price gouge

Should engineers price gouge

(OP)
After any hurricane in the US the price of lumber
immediately goes up even for inventory that was on
the shelf before the storm. The price rises can be
dramatic 3X or more. The reason of course is the sudden
need for repair lumber. This practice is widely supported
by the free marketers and the point is made that this
price gouging helps ration a crucial resource in times
of need. Makes sure people are building dog houses with
plywood needed for roofs.

Consider a scenario where the engineering outsourcing
suddenly is interupted by a dramic event or events.
Say a bird-flu pandemic or global war.

Is it ethical for us engineers to demand the market price
for our services in time of a shortage brought on by
international circumstances??

Maybe we ask 350000 US dollars per year for a job that
previosly paid 60000  ??



RE: Should engineers price gouge

Not that I believe it would ever happen, but I would not object to getting a little more money out of the business types who are flat cleaning up on globalization.

I would not consider it gouging, I would consider it the market at work.

That'll be the day...

Mike

RE: Should engineers price gouge

It's basic supply and demand, I say go for it. Price gouging is just capitalisation on market changes, basically its a way to maintain market efficiency (making sure that those who want it the most will buy it), kinda like ticket scalping.  "When the streets run red with blood, buy property."

The BS about making sure its not used for a dog house is just a PR scam to quell any complaints.

RE: Should engineers price gouge

So when there is a surplus of engineers should we do the $60,000 job for $ 20,000?
Read the following page.
http://www.aflcio.org/corporatewatch/paywatch/
I am sure some of those people will appreciate your willingness to work for a fair wage so they can pocket more.
Someday when your kids are struggling through the local state college ( hopefully not in engineering) their kids will be driving their sports cars off to some ivy league school.
If someone is willing to pay $350,000 for the job then it's worth it ot them.
I would guess a lot of engineers don't take basic econ.

RE: Should engineers price gouge

BJC, I don't think I can stand to look at that link.

Mike

RE: Should engineers price gouge

I think you have a point, in principle.  Just like the free market works, in principle.

I've always thought of the free market concept as the examples you get in Physics 101 where there's no friction or air resistance and pulleys and ropes have no mass.  Good an functional in principle, but not 100% applicable in real life.

The main "friction" with your idea is that most engineers are on a salary.  These salaries tend to only change year to year, and usually only minimal raises are involved, perish the though of your annual salary going down.  

In order to respond to your sudden engr. crisis, all pay scales would have to be constantly fluid and updated every what...hour?  day?  week?

The concept does have merit in taking contract work, as I understand it you can still make a monetary killing taking a contractor job in Iraq or Afghanistan - supply and demand.     

RE: Should engineers price gouge

Let's flip this question around some. Assume this situation - you are an engineer paid 60,000, and there is no disaster or occurance which has created a supply / demand issue for engineers.

Now, would you be willing to work for $40,000?     Of course not!

I see jobs all the time on Monster listing a position requiring a great deal of experience, but which want to pay only 80%, or sometimes only 60% or less of the going 'average' rate. No way I'm going to apply for such a job if I have a choice.

If circumstances or events drive cost of engineering up, then the higher price is the new norm.

RE: Should engineers price gouge

I was going to make the same comment Jabber just made, salaries are not fluid, there's a term for it in economics but I forgot it and it's not important.
The principle of economics is very similar to physics -  assume this and that etc. - however human resources economics differs significantly from resources economics and thus we have to use a common denomintar, in this case the basic principle.

If there is a severe glut of engineers, salaries will drop however they won't dip drastically or at all as employers still have to factor in new employee training costs, lay off packages etc etc.

RE: Should engineers price gouge

Comcokid,

If you have the job making $60k, then no, there would be no consideration for taking a $40k job.

But, if you lose that $60k job (layoffs/downsizing/etc.) then that $40k job looks a whole lot more attractive.

Unless your an airline pilot, chances are you are not going to see a pay cut from your employer.  Instead, when market conditions change and they can't/won't justify the current payroll anymore, then either you or your coworker is going to get the axe.


Oh, and for what it's worth, there is an engineering crisis right now and I and many other are benefitting quite a bit.  This after suffering through a very slow last six years or so.

Edward L. Klein
Pipe Stress Engineer
Houston, Texas

"All the world is a Spring"

All opinions expressed here are my own and not my company's.

RE: Should engineers price gouge

In my mind...price gouging of any kind is only capitalism in progress.  The great thing about capitalism is competition.  Eventually, competitors will give in to lower prices to stay in business.  

For young folks these days....  Engineering is not even considered to be a "well paying" job as compared to other options available to folks coming out of college.  I think this is going to change over the next ten years... here is why:

Many "good" engineers or potentially "good" engineers are choosing other career paths to follow the buck.  Meanwhile, there is massive amounts of infrastructure (within the US) which is literally "starting to fall down".  Levies, dams, bridges, power distribution systems, transportation systems, etc... will eventually need massive upgrades, not to mention power plants, sewer plants, and other utilities of which society is very dependent will... eventually... need to be replaced, upgraded, etc... How about the effort to build a series of new nuke power plants, produce clean drinkable water in major cities, deal with the effects global warming, immigration, war, pandemic, or simply transision into a society not dependent upon oil as the primary source of energy for travel.  

Eventually....engineers will be in very high demand to solve major problems as means to preserve human life.  Price gouging will certainly occur, but it will be no different than what has occured with the health care system in the past 10 years.  Its just supply and demand from social studies in 6th grade.  


 

RE: Should engineers price gouge

“Consider a scenario where the engineering outsourcing
suddenly is interupted by a dramic event or events.
Say a bird-flu pandemic or global war.

Is it ethical for us engineers to demand the market price
for our services in time of a shortage brought on by
international circumstances?
Maybe we ask 350000 US dollars per year for a job that
previosly paid 60000  ??”

 2dye4 (Daifur?)


A dramatic event of this nature, would affect the most populous areas where engineers are located. Being so, the probability of a great part of the engineers to be killed would be great. However, for the remaining of the population who would survive, the proportion of survivors engineers would be more or less the same as it is now.

In this scenario the cost of economical recuperation would  push down salaries and engineers would be paid less than they are paid nowadays.

luis

RE: Should engineers price gouge

When did ethics and big business ever go hand in hand? In a situation such as that discussed, are the EPC companies going to take advantage and indulge in price gouging? You bet they are! If the engineers are dumb enough to work for them for 'normal' rates while the company makes a killing in the market, who is the fool?

----------------------------------
  I don't suffer from insanity. I enjoy it...

RE: Should engineers price gouge

Experienced rotating machinery engineers are in high demand right now, rotating machinery engineering has been very very good to me.

-The future's so bright I gotta wear shades!

RE: Should engineers price gouge

I would say take the $350k, remember you are doing an important service by filling that urgent need, pay $20k to a related relief fund to ease your conscience, and enjoy!

=====================================
Eng-tips forums: The best place on the web for engineering discussions.

RE: Should engineers price gouge

3
The term "price gouging" is simply someone's spin on an event.  An activity or an asset is worth what a willing customer will pay.  If I charge someone $50k to stamp an engineering drawing, and they pay it then who got gouged?

Jessee Jackson says that big oil is "price gouging" America while the industry is saying that in constant dollars prices are very close to levels in 1983 and well below the embargo prices of 1976.  Folks are welcome to stop being willing purchasers of the product (smaller cars, consolidate trips, walk, etc), but they don't--they just complain about the gouging.

I am in a very high-demand engineering field, I've spent years of my life an considerable money to develop a level of expertise that people feel they need.  Consequently, my hourly rate is about twice the going rate that my competitors charge.  Anyone that feels I'm gouging has elected not to pay my outrageous fees.  The people remaining keep me slightly busier than I mean to be.  In fact I'm so busy that I'm considering raising my hourly rate from outrageous to embarassing.  I contend that I can't be price gouging as long as my clients know in advance what I'm charging and are willing to pay it.

David

RE: Should engineers price gouge

There is no such thing as "price gouging" in engineering services, nor in engineering salaries.  Customers and engineers have the choice whether to procure the services or not.  In fact, the market constantly applies downward pressure to engineering bill-out rates and salaries by bringing on new sources of supply:  out-sourcing to countries with lower labour costs, increased immigration and graduation rates etc.- it's only fair that we lean back a bit when times are good!  

In Canada, the same downward pressure hasn't applied to doctors to the same degree as it has to engineers.  The result has been that an engineer's salary has slipped over the past 50-60 years from a level roughly equivalent to that of the average medical doctor to less than half what a doctor makes currently.  And we engineers have saved more lives than doctors could ever claim to! (take drinking water filtration and chlorination and sewage treatment as an obvious example- that was engineers, not doctors!)

There IS such a thing as price gouging when there the thing purchased is not a commodity where the consumer has a choice whether or not to consume it.  Nobody shops around for doctors on a price basis!  Perhaps zdas04 has it right: many others have told me that their workload doubled when they doubled their fees.

When people sell bottled water at $10/L during a disaster, that is price gouging- even though it results from simple supply and demand, the "free and fair" aspect of the market has been removed by the disaster.  I suppose you could choose to die of thirst, but that's not really a choice, is it?

Don't worry:  if we're ever in a situation where we can't keep the lights and heat on and the tapwater flowing because of a shortage of engineers, society will react swiftly to "fix" the problem.  Until then, charge what the market will bear and not a penny less!

RE: Should engineers price gouge

moletnmetal,
Interesting example.  But, the guy with the water to sell has it because he took a risk and spent money on a commodity with limited profit-potential in good times.  Shouldn't he be compensated for the risk?  The people crying about it can't drink the money.  They could have stock piled bottled water cheeply just as the "gouger" did.  

David

RE: Should engineers price gouge

Supply and demand for services or jobs. If someone or an organization is willing to pay for your expertise so be it, and take full advantage of it. However, after a period of time the law of averages catches up and as in physics things tend to achieve some balance. Engineers that can charge higher rates can do so until others achieve the same level of expertise over time and all of a sudden, engineering rates suddenly become more competitive.

RE: Should engineers price gouge

Anybody remember the 80's? When oil/engineering companies dumped the older engineering types and kept the younger engineers. The "thinking" (and I use that term loosely) was "Why pay all this money out when the younger types could push all the numbers around more cheaply"! Also oil/engineering companies started removing all the perks for working at their companies  ...3 week vacation disappeared, bonuses were reduced or totally pulled, & medical benefits were reduced.
 The oil/engineering companies reduced everything down to salary ...I personal work for a company 15 years, and my perks were no different then somebody that just walked off the street. So WHY would I stay with that company if I could get a higher salary else where? I always thought "if" I could stick it out, some day it would pay off ...WELL its pay back time now! I don't have to "Stick it to them"!! ...They fight to pay me more to come work for them! ESPECIALLY us "older" types! ...And Pay is the key word! Remember the oilman's pray of the 80's? "Please God let there be another oil shortage, I promise not to piss it away this time!"   ...Amen Brother!

RE: Should engineers price gouge

2
Never really understood why engineers salaries are so low. I work in heavy constrution (contracting end) and buy engineering to support our operations. I use engineers I select and rarely question what the cost will be. Since I have a long relationship with these firms, I know I will be charged fairly. I might spend $10,000 dollars to help design an operation that may cost $100,000. with good engineering, i may be able to cut 5 to 20% of the cost. Without good engineering, the cost could double. I see that frequently in claims. A ulti million dollar project will have paid maybe $50,000 for engineering. The engineers were shopped to get the best price, and then the scope of service is reduced. ( we only need a few borings, we don't need survey - we can get the cotractor to "as-built")Now a days, not only is scope reduced, time frame is reduced. Then the contractor claims a changed condition and asks for delay, rework, etc. costing several hundred thousand or millions of dollars. For an extra $50,000 in engineering, the job could have been done as intended on time and on budget.
In short it is impossible to spend too much money on GOOD engineering.

RE: Should engineers price gouge

DRCI
It's a saying I've heard ever since I have been in the business.  "Nothing cost as much as cheap engineering".

RE: Should engineers price gouge

One of the corrolaries to the above must be "there is never enough time or money to do it right the first time, but there is always enough to fix it later."

RE: Should engineers price gouge

When does a salary like that of a CEOs or CFOs for a large company become price gouging?

When there is a shortage of technical people in the US, we see HIB visas and the like. The whole free market thing seems to work one way.

RE: Should engineers price gouge

My sister just got a job right out of law school! She told me her salary was typical of "this year's graduating class of lawyers."

$140k/year.

Of course, lawyers put in a lot of hours, whereas we engineers are all 9 to 5-ers, right?

RE: Should engineers price gouge

Price gouging will cause more engineering jobs to go to cheap labor countries smile

RE: Should engineers price gouge

2
Well, I think you'll find you can only price gouge from a position of strength.

Actually, I find it hilarious that the home of free enterprise throws a hissy fit when free market pricing actually comes into play.

Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

RE: Should engineers price gouge

I did the FEMA Katrina/Rita Hurricane repair along with 4000 other technical types.  Average wage was greater than 3,600/wk plus all expenses.  The firms with the contracts with FEMA made a nice mark-up on wage costs.  This pricey service was paid at this rate because it could not be done cheaper without causing delays and stretching out the impact and misery for the effected population.  

RE: Should engineers price gouge

$3,600/week is high??????????  I knew I didn't want to go to Lousiana.  I would say that $3,600/day would be boarderline excessive, but that would still be between the contracting parties.  

I thought that cleanup ended up being expensive, but maybe the real money went to politicians--LA is known for a political system that is just about the best money can buy.

David

RE: Should engineers price gouge

I am really impressed to see that rating of engineering services is relatively as low in US as it is in my country (Bulgaria). Before i thought that the reason was the ideology of our previous system.
I worked more that 20 years on salary - during the socialism and after - in market economy. In boths systems Doctors are considered as noble and humanitarian professionals who must be paid more. Lawyers always get more than others. Artists, sportsmen - no comment! Engineers - well, what so difficult they are doing?!
But now in my country we start facing a deficit of engineers, because in last 15 years the profession is not popular and best high school graduates went in business or economics. From two years I am an employer and the only way to create a team in my company is to take fresh graduates from the University, to invest in their training and to pray that they will work for me long enough at least to return me mi investment! I pay them more that I received two years ago, when I was Head of design department in big engineering company! This is simply matter of supply and demand, what to do!

RE: Should engineers price gouge

No, remember there are ethics in engineering.  Although several engineers seem to forget this.  

If you lost power (like the ice storm that hit Missouri) would you appreciate paying double for a generator?    

After 9/11 or the Hurricanes did you appreciate paying $4 for a gallon of gas, that you know cost a fraction of that the day before?  Do you like pay $2+ per gallon now while watching the oil companies make record profits?

If anything in a time of emergency we engineers should step up to the plate and try to help not try to profit.

If you want to make a quick buck go to McDonalds and spill some coffee on your lap or trip over your own kid in Wal-Mart, those have worked before for 2 people.  

RE: Should engineers price gouge

BBENG,
Have you read the discussion above?  All the points you raise have been ridiculed at least once in earlier posts.  I see from your profile that you are new to eng-tips, but that doesn't excuse ignoring 7 months of thoughtful contributions.

David

RE: Should engineers price gouge

zdas04 ... So because most other posters in this thread (or any other thread for that matter) have expressed a fairly common opinion, BBENG (or anyone else presumably) is not allowed to express an opinion to the contrary? When was this rule introduced into Eng-Tips?

FYI, the definition of "gouge" according to http://dictionary.reference.com/browse/gouging is "to extort from, swindle, or overcharge"

Several times the term "willing" has been applied to clients, customers, etc, but I would beg to differ (yes I dare to have a differing opinion to the masses) that they are rarely if ever willing to be overcharged. They pay because they have to. The alternative is to not have the work done.

cheers

RE: Should engineers price gouge

CBL,
I feel that common politeness dictates that if you enter a conversation that has been going on for a while, you have an obligation to try to not repeat the discussion that has been going on but to add to it.  In here that is easy, just read the thread before posting in it.  The post that set me off looked simply like he came in and responded to the title of the thread.  That strikes me as impolite.

Companies always have choices.  They can go to someone else.  They can go offshore.  They can do a different task with a different set of players.  If they come to me they get the results of my knowledge and experience for a price that I feel is fair.  Many feel that my price is "gouging" and I wish them well with their alternatives.  Others feel that they get good value from the money they spend with me and keep coming back.  I've never extorted, swindled, or overcharged so I guess I'm not gouging.  In your example, it certainly is an alternative to simply not have the work done.  That is a choice that happens every day.

David

RE: Should engineers price gouge

zdas04 ...
The question posed in the thread title is, "Should engineers price gouge". Bearing in mind the definition of "gouge" that I posted above, IMO the simple answer to that question should be a resounding NO ... not in any situation..

The question posed later in the OP is, "Is it ethical for us engineers to demand the market price for our services in time of a shortage brought on by international circumstances??". I think this is the question which most of the respondents have posted replies to. It is a totally different question than the thread title and is open for interpretation.

Normally "market price" is not a synonym for "gouge", but if used in context with the thread title ... ???
Perhaps 2dye4 will clarify what was intended.

Demanding market price or above for non-catastrophic building/engineering is fair enough. Corporations will probably be making sizeable profits, and all involved (employees, contractors, etc) should try to maximise their "share".

Is "international circumstances" the same as a crisis such as that caused by Katrina, the Kobe earthquake, the 2004 tsunami or 9/11? ... IMO no-one should receive excessive benefit by gouging the people or companies that have suffered and lost in such catastrophes.

cheers

RE: Should engineers price gouge

CBL,
That is kind of why I got twisted off, the conversation had morphed from the origanal black and white issue to an interesting discussion.  The guy I jumped on disregarded that deviation from the straight and narrow.  With a definition of "gouging" that includes illegal activity, no one in these fora would advocate it.

The discussion is now about free market forces that really require an individual to charge what he believes a task to be worth and absolutely requires the purchaser of those services to pay no more than they are worth to him.

In a crises you first do damage-control/loss-mitigation and then negotiate a post-crises relationship that may or may not include compensation for the work you did while the house was burning.

Then there is the guy that risked his own money to purchase bottled water months before Katrina and then got slammed for charging too much to the people who didn't plan ahead.  Is he an evil gouger, or just someone who planned for circumstances?

David

RE: Should engineers price gouge

As far as I'm concerned, he's an evil gouger. The lowest of the low who preyed upon people when they were at their weakest. And he didn't risk his money, he just tied it up for a while. He would have sold or used his stockpile in good time. Should the others have planned ahead ... of course they should, but that doesn't make it right to kick them when they are down.

It would have been different if there was just a shortage of water and he was charging the going market price because people wanted to have ice-cubes in their cocktails or wash the car. But the water was needed for survival, there wasn't just a shortage ... there was none!

cheers

RE: Should engineers price gouge

Interesting perspective, I can't disagree with any of your points.  

So, making an "excessive" profit on the hardships of people who didn't bother to look out for theirselves is evil.  How about a "normal" profit (after all the people were just out of water and found that they couldn't drink money)?

David

RE: Should engineers price gouge

Wow. CBL, I think the guy who stocked up on water had a moral right to charge what the market would bear. Money is not a 'special' resource, it is an enabler. If person a chooses to buy water well in advance then person B uses their money to buy it off A as required. There is no gouging. There is no guarantee that one dollar will always buy you one bottle of water.

Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

RE: Should engineers price gouge

Greg,
I agree with your scenario in normal times or even in times of some duress, but not during times of severe crisis when peoples survival is at stake.

Sometimes there is no time to plan ahead and stockpile a resource. If Geelong was devastated by a tsunami, or earthquake, or terrorist bomb, are you stockpiled for survival? Water, food, fuel? Alternative shelter? Would you happily and willingly pay 5 or 10 times or more for any of these, knowing that just a few miles away they can be had for normal prices? Would you charge your neighbour, friend or relative that much if you had those resources to spare?

Getting back to the original topic ... the OP was not asking about overpriced water. It was asking about engineers drastically increasing their prices for engineering services during times of national or regional disasters. I maintain they should not, and that no-one has the "moral right" to exploit others during a disaster.

cheers

RE: Should engineers price gouge

Suppose they need 1000 skilled people to cope with an emergency. 600 volunteer, and get low wages that cover living exes and a bit more.

The other 400 are flown in and paid 3-10 times as much.

Is that immoral?

That's how we fight bushfires. Are you going to tell all the overseas firefighters to get back on the plane?

Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

RE: Should engineers price gouge

Immoral ... I don't know. Unfair to the 600 volunteers ... definitely. Although I'm sure they are very grateful for the help.

And I think you'll find that the firefighters are being offered the higher pay to encourage them to go. I have not read or heard that they are demanding the higher remuneration before agreeing to go. I have a couple of firefighter friends who would be willing to go for their regular pay and for a free trip to Oz. If you have data to the contrary, please post it.

cheers

RE: Should engineers price gouge

CorBlimeyLimey,

There's nothing wrong with "gouging" as long as somebody doesn't have inside information (they create the scarcity and then profit from it) or a monopoly.  Otherwise, gouging is just an extreme example of the price fluctuations that encourages resources to go where they are really needed.

Water in a disaster zone isn't a good example because it reaches the edge of where capitalism starts to break down.  Capitalism requires choice, and if you're dying of thirst, you can't wait for cheaper water.  This is where I think government has a role in providing necessary goods and services.

-b

RE: Should engineers price gouge

-b,
So you are OK with people extorting, swindling and overcharging you providing they didn't create the crisis.

cheers

RE: Should engineers price gouge

Quote (CorBlimeyLimey):


So you are OK with people extorting, swindling and overcharging you providing they didn't create the crisis.

Yes.

I put up with it all the time.  Every time I go to the movies I pay too much for popcorn, if I'm too far or too close to the city I pay too much for gas, and if there's a conference downtown I pay too much for parking.

The alternative is rationing and having everything end up on the black market at inflated prices anyway (like concert tickets).

The key is choice.  If there's no choice (such as in matters of life and death) then capitalism falls apart.  Buying plywood to board up your home ahead of a storm is a choice, and the plywood should go to whoever views it as most valuable.  Begging for water because you are dying of thirst is not a choice.  Not many people have a desparate life-and-death need for an engineer, hence I wouldn't feel guilty about charging whatever the market will bear.

Do you think contracters in Iraq are immoral for charging more than what they would make somewhere else?  I can't think of many places that better qualify as a disaster area.

-b

RE: Should engineers price gouge

CBL So, one man stockpiles water. Another stockpiles gold.

According to this rather socialist ideal world, if the second man needs water the first is morally obliged to swap it for the usual amount of gold. Yet, I strongly suggest, that absent a shortage of water, if the first man needs some more gold (money) the second man would have some forthright opinions about the appropriate exchange rate.

Why do you regard money as having a higher importance than any other resource, whether that be my time, or water?

Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

RE: Should engineers price gouge

Excellent point Greg.

Goes back to the 'route of all evil' argument about money, but there is no doubt that we have become a society that has an entrenched view of the importance of money

Kevin Hammond

Mechanical Design Engineer
Derbyshire, UK
 

RE: Should engineers price gouge

Actually the correct argument's phrase is "For the love of money is the root of all evil" therefore it would seem to me that the interpretation is greed is evil and not money itself.  Again a misquoted passage over time turned to mean something else.  

So I guess this would evolve to if the "water-seller" or the "crisis-engineer" did their job for the money and didn't get greedy then they wouldn't be evil.

EOIT

RE: Should engineers price gouge

bvanhiel ...

Quote:

Every time I go to the movies I pay too much for popcorn, if I'm too far or too close to the city I pay too much for gas, and if there's a conference downtown I pay too much for parking.
???? These things are crises ????

As I've already stated, the OP was asking about times of crises such as hurricanes, pandemics and global war.

I believe a big part of the pay contractors get in Iraq would be danger money and working conditions. I wouldn't go there for any amount.

Greg ...
I don't regard money as having more importance than any other resource; in fact just the opposite. The resources are more valuable; money is just a means to obtaining them. I do regard as unethical, the principle of charging exorbitant amounts for engineering services (e.g. rebuilding bridges, towns, roads, etc) after a crisis has occurred.

For those who disagree with my view, we will have to agree to disagree. I've spent too much time repeating myself here.

cheers

RE: Should engineers price gouge

KBL,

They are everyday examples of something costing more than we think they should, but the same idea applies.  Lets use the example of rebuilding bridges after a hurricane.

The higher price to build a bridge after a storm encourages tow things:

1) Waiting until the price is lower.  Less important bridges will be able to wait for a better price.  This directs resources to more important bridges first.

2) Attracting more bridge builders to the area.  If I can make more money I'm encourages to come to the area to work.   

If the prices don't go up neither of those things happen.  The order of rebuilding will be haphazard, and the whole thing will take longer because of the limited number of bridge builders in the area.

-b

-b

RE: Should engineers price gouge

Dear All
Personally I think many Engineers pay is extremely low. At this point I really don't understand why anyone would want to do my job for less than 6 figures a year. I have been in the Power Generation business and worked for the big 3 Power Generation companies for 25 years. If I had spent as much time in Medical School as I have spent in Engineering School, I would be a multi-millionaire by now.

Instead I am on call 24 / 7 and enjoy many perks including spending too much time in 3rd world countries brining power to the people working in all weather conditions under extreme deadlines costing millions of dollars in Liquidated damages, reliability claims, insurance for crashed equipment and all without very many “Thank You’s” for doing my job and being away from my family. However, there must be something wrong with me as well because I have to admit, I really do enjoy what I do.

I remember getting satisfaction on one person who wasn’t a customer, but an end user that relied upon my dedicated work. The occasion was after a hurricane came through and power, including the local power plants were completely down and dark. Myself with not having any time off during past assignments was thrown into yet another disaster while battling a sever case of flu. I had walked into a small family owned grocery store with a pharmacy to get some much needed prescription drugs for my condition and to keep me on my feet long enough to assist the power companies in recovering from this hurricane.

Upon getting my prescriptions filled and presenting my company insurance cards to the owner of the store (his wife close behind and whose food in the store was beginning to thaw, thus he needed power turned on urgently) the owner said snottingly “It’s not fair to see a guy such as yourself, working for a great company, pay so little for prescription drugs, Do you know that you pay much less than people on Medicare / Medicaid are required to pay? That just should not be.”

My reply to the owner was this:
(Me) Pardon me but, whom do you call when the power goes out?
(Owner) Why I call the power company of course
(Me) And who the F*#K do you think the power company calls when their power goes out?
(Owner) Why I don’t know?
(Me) Me Dumba*s
(Owner’s wife) Why I do believe he ‘s got you there dear. Thank you for your efforts sir, is there anything else we can do to assist you?
(Me) No Mam, Thank you, this will do.

So, in the grand scheme of engineering, I think many of us go underpaid, un-respected and undervalued until something goes wrong. After all management needs someone to blame when things go wrong. As for getting rid of the older talent and replacing them with the younger talent, I say go ahead, your management team will live to regret that idea as there is much more to engineering than just a skin on the wall. Perhaps we should unionize and strike for better compensation? Just a thought.

Kind Regards
Romefu12

RE: Should engineers price gouge

(OP)
Hi
Very interesting discussion. I am also interested in the question of whether capitalism can survive total unrestrained self interest like is being discussed with the water question.

My original intent was to ask about what to do in the event of a meltdown in trade for some reason. Most likely a large war breaking out somewhere. We engineers have been frequently given the boot because there were cheaper options elsewhere. Then given a hard lessons of life lecture by the economists and CEO's. We learned about creative destruction. If we had a turn in this country or wherever you may be where we suddenly had to bring up massive new capacity to compensate for lost ties to overseas suppliers would we be right to ask $500 k/year because that is what the market will bear. We could argue that the pricing makes sure that engineering resources are used at the point they are most needed and this being enforced by the free market.
Which by the way brings an interesting question. I have been told that durint WWII in the USA the free market was temporarilly given the boot in many areas and the gov did many controlling, resource allocating functions. If the free market allways produces the best result in term of minimizing waste why would it not have worked then during the wartime??

RE: Should engineers price gouge

2dye4,
I've got to address your last point.  

The free market will generally work in a "survival of the fittest" sort of way to eventually realign resources towards efficiency.  During WWII, the government had zero interest in waiting for market forces to realign themselves to a war footing.  The interventions were directed at making industry move in the direction that the government wanted, NOW.  Remember that the government was not interested in efficient redistribution of activities to a war footing, they wanted war production fast and they really didn't care how efficient the transition was.  After everyone was making war material instead of consumer goods, there were significant realignments over time that resulted market forces increasing efficiency, but to start with that just wasn't a priority.

The government's material-distribution activities that continued throughout the war mostly resulted in significant under-production of the material that the government retained distribution-control over.  This was the early days of "scientific management" and the watchwords were "economies of scale" and "central control", so a lot of the bureaucrats had more in common with Marx than Nixon.

David

David Simpson, PE
MuleShoe Engineering
www.muleshoe-eng.com
Please see FAQ731-376 for tips on how to make the best use of Eng-Tips Fora.

The harder I work, the luckier I seem

RE: Should engineers price gouge

The free market is hopefully constructive.  
There is a good quote (by Isenhower I think, that I can
t exactly quote ) That goes "War by it's very nature is destructive....".  It's the total opposite of peace.  I think the quote is in his book "Crusade in Europe"

RE: Should engineers price gouge

Every other profession would, so why shouldnt we.

We charge too little for our services most of the time anyway.

RE: Should engineers price gouge

(OP)
Zdas

I can understand the gov need for speed. But why wouldn't a free market system be able to deal with this more effectively by offering obscene financial rewards to the first producer of war goods. They free market could probably work in some additional effeciency over the gov control.

I think the answear is part of  bvanhiel response above. The free market works effectively when all parties have some choice space to move about in. During the war our choice space was limited. Maybe free market rhetoric is best countered by a clause that some minimum choice space must be available to all parties or free market effeciency breaks down.

How would we engineers feel if after years of downsizing and being replaced by lower cost workers if all of a sudden there was a "crises" and we were not allowed to set our own prices for a market that had suddenly turned in our favor. Sounds like a stacked deck to me.
I for one plan to auction my services on a weekly basis to the highest bidder.

RE: Should engineers price gouge

2dye4,
I see it as a combination of free will and reluctance to change.  No one likes change, and if I'm selling all the toasters I can produce at a price that seems like a good profit why would I spend the money to retool to produce ammo boxes or mess kits?  I'm going to keep making toasters as long as there is a strong market.  The government did not want that lag time and jumped in in a big way.

David

RE: Should engineers price gouge

In the United States, the 'Patriot Act' is the best thing to happen to the engineering profession in decades.  It has put a significant (and much needed) reduction on work visas which helped turn engineering into a commodity in the US.  This is at least part of the reason engineering graduates have risen so much in the past five years.  There is no shortage of engineers in the US, coroprations are just irritated that the market is no longer oversaturated.

In America, we have 'selective free trade' where corporations can bid engineer salaries down yet lawyers and doctors have strict quotas and price controls.  Since there will never be similar institions to protect engineers from market efficiency, my only recommendation is to get to management and business positions quickly.

RE: Should engineers price gouge

regalia:  people in the US have nothing to complain about in relation to oversaturation of the engineering workforce.  You do have a functioning visa/quota system, Patriot Act or no, which beats Canada's so-called "human capital" labour force model- basically a free-for-all with society picking up the tab for all the mis-matches between supply and labour force demand that result.  Visit Toronto sometime and take a taxi anywhere- chances are very good that a foreign-trained engineer will be behind the wheel!

Care to delve into the REAL reason why this is?  Visit www.geocities.com/martinsmoltenmetal/index.htm .  I no longer have access to the profession-specific stats, but the overall numbers haven't changed much in the past few years.  The situation is the result of simple supply and demand, not a conspiracy of xenophobic employers as the popular media myth would have us believe.  And industry here STILL screams "shortage"- they want a labour force which is "flexible"...

Engineering's a great profession, but there's a reason we've slipped in compensation levels relative to those of doctors, lawyers and just about everybody else.  And we're such a group of prima donnas- we're so "above" the marketplace- that we'll never do anything about it.

RE: Should engineers price gouge

“Engineering's a great profession, but there's a reason we've slipped in compensation levels relative to those of doctors, lawyers and just about everybody else.  And we're such a group of prima donnas- we're so "above" the marketplace- that we'll never do anything about it.”


Most of the engineers are not doing engineering; instead they are mainly in management job positions, doing management. I agree with you moltenmetal! Engineers are a lit bit, like prima donnas, with oversized stewardships doing management without the proper skills, this is more visible in large company organizations where doesn’t matters what you do, but what is your status, the result of this is, poor engineering and bad management.   

RE: Should engineers price gouge

@moltenmetal
Great stuff molten.  I knew that that kind of thing was a serious issue in Europe but never considered Canada was experiencing the same thing.  Indeed engineering is a great profession, let's hope positive change occurs.

@0707
We have basically destroyed the engineering base in the US.  It's true when they call engineering the 'new liberal arts degree'.  Corporations do an awful job at recruiting and training of graduate engineers.  They seem more focused on meeting afirmative action quotas than investing in the technical future of their country.  As a result, these newbie engineers become useless as engineers and move into management to fill the increasing lack of talent in the management field.  

RE: Should engineers price gouge

Back to the original post:

Price gouging is when there is a conspiracy between major players to agree to charge a certain increased rate.

Selling your services to the highest bidder is not price gouging, it is basic economics. This is standard practice in all other professions, and it should be more common in ours.

I see too many people settling for less than they are worth or hanging around in jobs which underpay them.

When my wife went for her last job, she stated her salary. The came back with an offer 5k less, she said no way, so made a second offer 2k less than what she wanted and she said 'If you want me to work for you then this is the salary that you have to pay me'. She got the salary she wanted.

The best thing that you can do for engineering salaries is to sell your services at the highest possible price, this is not price gouging this is basic economic common sense.

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