TheLadders:  View Your Job Matches Now

My Electrician Makes More Than a Doctor

by Darwin on May 20, 2012

Boy, that’s the fastest $2800 I ever spent!  Ever since my wife and I decided we weren’t moving last year, we took inventory of all the stuff we wanted to do to the house to make it worth staying (I’m still convinced in the end if I drop another $50K into this house over the years on a new roof, windows, HVAC, and more I’ll still come out ahead compared to the new construction and higher taxes we were looking at).  Last year, we put in a pool, did some landscaping and painting and that was more than enough for my liking as far as 2011 outlays.  This year, after setting the budget based on our retirement and college savings goals and our vacation budget, I came up with $6500 as our home upgrade budget for this year.  My wife makes most of these decisions (but I make the most important one – how much we can spend LOL!).  So, she wanted to do a bunch of electrician-related upgrades and the rest will possibly go toward new floors that I’ll put in myself.

Electricians Charge a Hell of a Lot

We got a few recommendations from friends and neighbors in the area for electricians they’ve used.  We avoided the larger electrician “companies” since the overhead is higher and you don’t know who you’re going to have in your house for 2 days.  Of our individual electricians in the area, 3 of them got high marks, so we had all 3 out to give us quotes on the various jobs we were interested in.  Interestingly, as though they were all reading each others’ minds, they all quoted at roughly the same (seemingly expensive!) prices.  When I backed out my assumed costs of lighting, wiring and other materials, I pegged their hourly rates at about $150/hour.  That’s a damn good rate!  With most doctors making $150,000-$250,000/year (not to mention they tend to work a heck of a lot more than 40 hours a week and start off with 6 figures in med school debt), I’ve come to the conclusion that electricians make more than doctors.

To give you a sense for the type of work we had done, here are a few of the jobs:

  • I had one of those mushroom cap fan things stuck in my attic to help keep it cool up there and hopefully pay for itself with lower energy costs and extending the life of the roof.
  • Recessed lighting in the kitchen (5 units)
  • 2 pendant lights in the kitchen
  • Bathroom fans put in both top floor bathrooms (our master bath didn’t have one and the kids’ fan was loud as hell); he had to route vent line as well.
  • More lighting in master bath.
  • Some electrical work for the pool area, transformer, etc.
  • While he was here, had him throw up a couple lamp lights at the back doors (add-on at the end, he didn’t charge much for those).

Anyway, in all, he spread the work across 2 days, probably spent $500 on lights, fans and materials and the rest is pure profit to him since his insurance, his van, etc. are all fixed costs spread across the entire year.  The only potential flaw in my assessment is that there’s no guarantee that he works 40 hours per week at these rates, but it took him a while to get out to us and he had to leave our house at 5 to get to another job, which tells me he’s not hurting for work.

I can’t complain too much.  The work he did was top notch, he was very personable, and frankly, I’d mangle half the jobs he did which would be ugly to look at or more expensive to fix.  But for the anti-degree crowd, add this one to the list of jobs where you can do quite well without the burden of massive college debt and no job to show for it.  Coincidentally, as I was about to hit publish on this article, 60 Minutes just aired a segment on the famous entrepreneur Peter Thiel who was paying kids not to go to college.  I still think for a good portion of Americans, college is the right choice, but for these local electricians, the certification and trade schooling seems to have suited them quite well for the investment!

Any Electricians Out There? Thoughts?

 

{ 24 comments… read them below or add one }

Brent May 20, 2012 at 8:56 pm

Your electrician may be charging you $150/hr, but they are unlikely billing that rate for anywhere near 40 hrs/wk, 52 weeks/yr. Did you calculate what your doctor’s “hourly” rate is? I get charged $100 for 15 minutes or less of my GP’s time…$400/hour!

Example of total compensation for an electrician from Cincinnati: $75,000. Soo, I’d conclude that vast majority of electricians make much less less than doctors (even GPs), whether on an hourly basis or annual salary. http://swz.salary.com/salarywizard/Electrician-III-Salary-Details-Cincinnati-OH.aspx?hdcbxbonuse=off&isshowpiechart=true&isshowjobchart=false&isshowsalarydetailcharts=false&isshownextsteps=false&isshowcompanyfct=false&isshowaboutyou=false

Reply

Darwin May 21, 2012 at 11:25 pm

Your doctor’s overhead is way higher. Malpractice insurance, measley medicare reimbursements and the works. They’re not getting rich. Not to mention, many trades do a fair amount of work for cash (no taxes = 25-35% pay increase on those jobs!)

Reply

Brent May 22, 2012 at 10:39 am

Overhead is irrelevant. Take-home pay is what counts. I gave the example of my doctor “earning” $400/hr. Let’s say $250 of that goes to overhead. That’s still $150/hr or ~$300,000/yr in the doctor’s pocket, taxes notwithstanding. This is not a terrible income.

Many doctors, regardless of specialty, do make a far-above average income and are able to build substantial wealth (I have doctors as clients, so have 1st hand knowledge). Certainly, some are getting squeezed at the lower end, but they aren’t destitute. Whether the pay is worth the cost, years of training, and working hours is a different discussion.

Back to your original point: electricians charge a lot. But they charge a lot compared to what? I suspect you are anchoring the $150/hr to your perceived hourly rate of other professions/trades. This may or may not be a reasonable comparison.

Reply

The College Investor May 20, 2012 at 10:29 pm

A good electrician is worth it…pay for it.

As for hourly rate, I’m sometimes disappointed by mine when I work a 60 hour week, but that’s life when you’re salaried.

Reply

Darwin May 21, 2012 at 11:26 pm

Yeah, definitely paying for it. Don’t want to pay someone else more to fix it – or burn my house down!

Reply

Lance@MoneyLife&More May 20, 2012 at 10:37 pm

While I see Brent’s point I believe that salary would be for an electrician working for someone else. If the electrician owns their own business and is any good at their trade and stays billable a good percent of the time they will make a ton more than $75,000 a year. Now assuming they bill 40 hours a week and always bill out at their full rate probably isn’t true as they won’t normally bill for drive time or estimates. Do they make as much as a doctor? I think a great one could make what a low paid doctor does, but I doubt it would be the norm.

I think that trades like plumbing/electrical/HVAC etc are trades that will be in high demand as there is a large group of people who would never consider it with as hard as traditional college is pushed these days. I think these trades are a great alternative and if you work hard and eventually start your own business you can definitely make bank.

Great article!

Reply

Darwin May 21, 2012 at 11:27 pm

Glad you enjoyed the article! By my mom’s house, her plumber is the sole provider for his family and lives in a mansion. Who knows, maybe there’s something to that small biz trade lifestyle!

Reply

Jeff @ Sustainable Life Blog May 21, 2012 at 2:49 pm

That’s pretty high. I’m currently in the middle of re-wiring my new place entirely upstairs (which has been one reason for my lack of posts), but I cant quite do it all myself. We had Knob and tube (look it up if you’re unfamiliar, it’s OLD) and i’m replacing all of that, as well as adding all new receptacles, a fan in the bathroom and another light. I’ll have to get someone out to do an estimate to hook all of the stuff up to the main circuit breaker (and replace it) and i’ll let you know what that looks like. I doubt it will be anywhere near that, though.
A note on the trades – I really wish I would have gone this route sometimes. Not everyone needs to/can afford college, and things like plumbing, electric will always be in demand.

Reply

Darwin May 21, 2012 at 11:28 pm

It’s all about supply/demand. As long as we don’t see a secular shift away from college and back into trades (which I don’t think will happen any time soon), trades in decent populated/high COL areas will always make good money.

Reply

krantcents May 21, 2012 at 3:47 pm

Presuming he is an electrical contractor, he may do very well. He also has expenses similar to any business person such insurance truck(s), equipment etc. He has that overhead when things are slow too. Nothing is quite as good as it seems.

Reply

Darwin May 21, 2012 at 11:30 pm

Yeah, I don’t know his personal finances too well. I do know he lives in a decent place but looks can be deceiving (he may be obscenely rich or be living in debt!)

Reply

Joe @ Retire By 40 May 21, 2012 at 6:24 pm

Electricians, plumbers, carpenters, etc… They seems to be making pretty good money because every time I call them, it’s so expensive. I agree with KC above. Maybe it’s busy now, but there must be slow times too.

Reply

Darwin May 21, 2012 at 11:30 pm

I used to think in a lousy economy I could get a deal on anything. I often could, especially during the last recession – but not trades! They never lowered their prices so I finally got around to paying to have some stuff done around the house!

Reply

20's Finances May 21, 2012 at 7:34 pm

Trade workers may make decent money making it, but it’s do or die. They don’t have many options without a college degree. If you are trained as an electrician, you can’t just get a job in a different field overnight. With a college degree, your options open up just a little bit. With that said, I don’t ever expect to make $150 per hour, unless my online gigs take off.

Reply

Darwin May 21, 2012 at 11:31 pm

True, I suppose it could be a high risk career – unless of course you get certified for a few different things as a general contractor. I had a jack of all trades at one point out doing various types of work. Someone like that could probably always stay busy.

Reply

101 Centavos May 22, 2012 at 1:17 pm

In these types of debates, I’m always bringing up my good friend who quit his job as a Project Manager in an engineering company to take on a plumbing contracting business. He made more at that than working as a degreed mechanican engineer.

Reply

Darwin May 27, 2012 at 11:52 am

Oh don’t even get me started on plumbers!

Reply

Len Penzo May 26, 2012 at 12:29 pm

I’m an electrical engineer and used to do my own electrical work around the house. Of course, it took me longer to do a job than a licensed electrical contractor, but the price was right.

Now I pay an electrician now because I can afford to; I figure my guy gets about $60 to $70 per hour — and he does great work. One-hundred-fifty an hour seems completely over-the-top, my man.

Reply

Darwin May 27, 2012 at 11:55 am

It’s funny, our electrician was joking about how electrical engineers mess up jobs and then the wives have to call him to fix them. Not sure how often that happens. But he didn’t give me an hourly rate per se, I was guessing based on the total quote minus my estimates on equipment.

Reply

Squeezer @Personal Finance Success May 28, 2012 at 9:32 pm

Each job has its pluses and minuses. I work in the IT industry, I know everyone in our offices, and my work situation is routine. I go to work in the same place, and perform similar tasks that I like. The electrician on the other hand is driving around in his van throughout the area, often working in unairconditioned buildings still being put together, has to pee in gas stations, and having to form relationships with new clients often.

Reply

icafe October 10, 2012 at 6:50 pm

I’ve been an electrician for 19 years now. I’ve worked outside in 20 below to 120 degrees. Underground dirty vaults to changing the red aircraft warning lights on highrise buildings. Middle of the city to middle of nowhere in the mountains,desert, and ocean. In a chip plant clean room and inside steam turbines. I’ve built schools, hospitals, power plants, substations, airports,and much more. We make a decent contribution to society. Ot is something that lasts and it needs to be built with quality and safety code standards. Electricity is lethal and unforgiving.
A few years ago I earned my BS degree. It waS a walk in the park compared to my 5 year apprenticeship trade school.

Reply

Seth December 25, 2012 at 2:59 pm

First, let me say I own and operate an electrical contracting company.

We would be lucky to actually bill out 30 hours, let alone 40. Your average service contractor, meaning you do not do new construction, or large multi month projects, will only bill out in the range of 20-25 hours a week, per person.

Now, take into consideration just a few of the costs:
Contractors License. $150.00 year
Contractors Bond. $150.00 year
Liability Ins. $250.00 month (with 2 electricians, cost go up with add. persons)
Workers Comp. $500.00 per month per electrician
City License. $150-250.00 per city (10 different jurisdictions)
Medical & Dental $1400.00 per month per person
Continuing Education. $100.00 per month per person
Van Payment. $500-700 per month per vehicle
Fuel. $1000-2000 per month per vehicle, no joke
Office. $1200.00 per month
Office Utilities. $300-500.00 per month
Phones & Communication. $300-400.00 per month
Uniforms. $200 per year per person
Tools. $250 per month per person (they need to maintained and replaced)
Computers & Software. $2500-5000 per year
Bookkeeper. $200 per month
CPA. $500 per quarter
Lawyer. $ a lot!

Point is, even if the contractor doesn’t have all these expenses, there is a lot that is unseen by those who do not own and operate a business such as this. At 150.00 per hour, he may just barely be breaking even, if that. There are still wages, taxes, advertising, etc…..

I had no idea how much a business cost to operate untill I made that step myself. What a shock it was. A legitimate contracting operation could easily be anywhere between $200-500.00 per hour. In the Bay Area of Californis, your average Union electrician makes $80-95.00 per hour with their benefits, that doesn’t include most of the above costs. If your non-union, you still need to provide something similar, or the talent will not follow. Think about this next time you hire a tradesman.

Reply

Dave February 21, 2013 at 11:36 am

What would your Dr charge you to drive to your house, swim through your insulation, dig a 24″ deep trench through roots, risk playing with 240 volts, clean up after himself, pay for insurance, pay for overhead, continue his education, and deal with an inspector after every “procedure”? Probably a little more that your electrician.

Reply

Sheldon May 14, 2013 at 10:06 am

I’m a second year electrician and I make 26 an hour.

I wouldn’t go so far as to say we make more then doctors, but most fully certified electricians make 100k+ in my area. ( Company shares copper collection)

Starting your own company is where the money is at, a SMALL company.

The average price to wire a new home is 15k-30k and those homes can be done in 2-3 8 hour days with 2 people.

I’ll let you do the math.

Reply

Leave a Comment

{ 2 trackbacks }

Previous post:

Next post: