Should engineers price gouge 14

[2dye4]

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 ??

 

[BJC]

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

 

[ivymike]

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."

 

[kontiki99]

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.

 

[DaveVikingPE]

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?

 

[epoisses]

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

 

[GregLocock]

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.

 

[civilperson]

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.

 

[zdas04]

$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

 

[lz5pl]

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!

 

[BBENG]

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.

 

[zdas04]

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

 

[CorBlimeyLimey]

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.

 

[zdas04]

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

 

[CorBlimeyLimey]

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.

 

[zdas04]

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

 

[CorBlimeyLimey]

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!

 

[zdas04]

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

 

[GregLocock]

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.

 

[CorBlimeyLimey]

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.

 

[GregLocock]

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.