Why Are Labor Prices So High?

CLICK HERE to sign up for weekly Exhibitor Lounge tips and training!

Welcome to “Exhibitor Lounge” sponsored by Exhibit Edge.com.  I am your host and Trade Show Mixologist, Michael Gray. Here, each week, you receive simple, practical, and proven tips to improve your trade show marketing strategy and get better results while maximizing your budget.

Why are labor prices so high? Have you ever asked yourself that question? Really – why does labor cost $100 an hour on the show floor? Does it seem very high to you for basic services? In today’s market you may guess that these carpenters, teamsters, and other “blue collar” workers possibly may have a total income around 40 to $50,000 per year. Well that depends a lot on the work available and any overtime hours they would hope to get. It is a very demanding job that requires workers to be extremely flexible in their work schedule. It is also important to realize that union work is just a partime job for most members and they may only work a few days a week, if they are lucky, during slower months. The thought of a 9 to 5 job just does not exist in the trade show world. Trade shows have definite slow and busy periods with most shows occurring during the Spring and the Fall seasons.

Since I know firsthand what union workers make in the Washington DC marketplace I can tell you that it is roughly about 25 to 35% of the amount charged to you as the customer. So does this mean that the contractor is making 65 to 75% profit on each hour of labor? Well – gross profit – yes but we both know that there are lots of expenses that greatly reduces gross profit to a much smaller net profit. I am surprised to see how few people really comprehend or even stop to think about all the costs that a company absorbs as a part of labor costs. So here is a crash course in payroll expenses and related costs.

To give you a quick list is a good way to start and then we can go back and dig a little deeper next week. Now this list includes union labor and company full time employee labor so I can give you a complete picture of all the components of labor costs. Alright, so let’s count them off:

  • FUTA – The Federal unemployment tax
  • SUTA -State unemployment
  • Workman’s Compensation Insurance
  • Social Security
  • Medicare
  • Health Insurance
  • Retirement Accounts
  • Vacations
  • Union Training Funds (this is exclusive to the Union, of course)
  • Sick leave
  • Bereavement leave
  • Maternity leave
  • Holidays
  • Continuing Education credits
  • Bonuses, Incentives, and Raises

We need to stop there as we have run out of time. We will dig a little deeper next week as I am sure that you have some questions.

As always, please respond with your questions or comments and let others know about EXHIBITOR LOUNGE.COM. We will see you next week. Until then, I am your host Michael Gray telling you to RELAX in the Exhibitor Lounge.