How much i
i : of the selling price of a
ae 1S represented by omits labor?
asked a half-dozen laymen this

Fh cee Their estimates varied from
percent. We also asked six or

Sey,
es i Carpenters; their estimates rang-

Tom 25 to 35 percent.

€ true answer is 13.8 percent.

N: .

: oe Research Council of Canada,
: th Published in the Canadian
T, arrived at this conclusion.

€ greatest costs in house building

€ land i
materials finance charges, and
nd profit and fin
co ance charges ac-
ae for 41.2 percent of the cost of
for an use. Materials alone accounted
fon other 43.9 percent. These are the

Sures arrived +)
Search study, at by the Council’s re-

a eee check the labor costs involv-
house ; € construction of a $18,000
cOntai m Ottawa, Ontario. The house
a 1,150 square feet. of space.

Costs Study found that the on-site
Sellin Tepresented 59 percent of the

: ® price. The remaining 41 per-

ae

|_| {est components of $18,000. house

EQUIPMENT
RENTAL 1.1%

- LAND, PROFIT
QVERHEAD,

' 2 Pa SOA FINANCE
: £3" eh CHARGES 412%

| Ce :
} vie vibes made up of land costs, ser-
) charges, arges, profits and overhead

' Wh e
. Costs €n related to the selling price, the
| Under Chargeable to labor were just
at 14 percent. Materials and equip-
cent rental gobbled up about 45 per-
Of the final price.
€ Council report concluded that

bre onal MacDonald of Ottawa,

Con dent of the Canadian Labor
Bress, said last week that

L of ts or further postponing

the €dicare would be “one of

ey 1 preatest sell-outs that has

dj been imposd on the Cana-
n People.”

a & Toronto address to the

he aed Club of Canada, he said

€€s “storm signals” that this
about to happen.

me 1S no secret that the gov-
hea €nt has been under very
ha vy Pressure from groups that
cig); heir own particular finan-

b mig Interest in maintaining the
ite of medical protection

og SHOW exists. _ i ass
+ in ‘The latest line.of attack, tied,

Comprehensive study made by the

© Council employed time-motion

try again to sell the idea that
we in Canada cannot afford me-
‘dicare.”

There was something radically
wrong with Canada’s values “if
this rich country with one of
the highest standards of living
in the world, cannot afford to
provide the best possible medi-
cal services for all our people,
as a matter of right.”

He said federal Revenue Min-
ister Edgar Benson, in his Oc-
tober 22 budget address, had said
government medicare expendit-
ures would mainly replace pay-
ments by individuals for the
same purpose or payments made
through existing medical care
-plans. Only a fraction of the cost
would, be an increasing demand
the recent budget,, is to...on the ie

LABOR C
SMALL PART
HOUSE PRICE

because on-site costs are only 59 per-
cent in total, the remaining 41 percent
should be examined for possible econo-
mies.

Obviously, on-site labor costs do not :

offer a very fertile field for reducing
the price of housing.

In figuring the labor costs, the study
included actual wage rates, plus all
fringes, such as holiday pay, workmen’s
compensation, unemployment — insur-
ance, and all the costs which can be
attributed to on-site labor.

The house involved in the study was
a three-bedroom, wood frame bunga-
low, completely built on the site except
for prefabricated roof trusses and cabi-
nets.

It had a fireplace, carport, full base-
ment, brick veneer, aluminum siding,
gypsum sheathing, aluminum facia and
soffits. Carport ceiling and storage shed
were of plywood. Interior finish was
gypsum wallboard, Flooring was resi-
jient in kitchen and foyer, ceramic tile
in bathroom, and hardwood in the other
rooms. Roof trusses and partition studs
were spaced on 24” centers and the
rest of the framing members of 16”

centers.
C)

The total measured on-site construc-
tion cost for this house was $10,586.
Of this amount, 74.6 percent was for
materials, including $141.00 chargeable
to waste and scrap. The rental of earth-
moving equipment represented 1.9 per-
cent of the on-site costs. The remain-
ing 23.5 percent ($2,499) was for labor.
This did not include the operators’ time
for rented equipment, as this cost was
reflected in the equipment rental rate.

The study broke down the labor costs
by individual operations. Labor costs
for installing exterior doors and win-
dows was figured at 8.3 per cent of
the costs of the doors and windows.
The labor costs involved in painting the
inside and outside of the house was
76.7 percent of the total cost of the
paint job. Roofing and finished carpen-
try, usually thought of as the big fac-
tors in the cost of a house, accounted
for only 27 percent of the total on-site
labor costs, but the labor component of
these two items was less than 16 per-
cent of the cost of all carpentry.

Total labor cost was found to be
23.5 percent of the on-site costs. The
National Research Council concluded
that the low percentage of labor costs
in relation to selling price reflected the
economies brought about by roof truss-
es, the use of sheet materials, and
manufactured cabinets. Another cost-
cutting contribution was attributable to
the use of power tools.

Of the 13.8 percent of total labor cost,
3.3 percent was represented by idle
time. Idle time was defined as time
lost through rest periods, time spent
waiting for or receiving instructions,
and delays caused by inclement weather
and lack of proper material allocation
at the proper time.

Idle time varied from 12-percent for
painting to 40 percent for basement
construction. The heavier the work, the
greater the time loss, the study found.

The total quantity of framing lumber
used in the project was 6,770 board
feet, Plywood for the sub-flooring
underlay, sheathing, and exterior finish
amounted to 3,824 board feet. Gypsum
wallboard and sheathing came to 4,917
square feet. Approximately 52,000 fast-
eners were used, consisting of about
278 pounds of nails and 11,000 staples.
Waste or scrap was negligible, account-
ing for 1.8 percent of the total mate-
rials cost.

The largest scrap item involved alu-
minum, which accounted for approxi-
mately 13 percent of the siding. About
7 percent of the gypsum wallboard
was wasted or scrapped and constituted
the second largest item in terms of cost.
The third major waste item was scrap -
lumber — approximately 6 percent of

2 x 8’s and 5 percent of the 2 x 4's.

From the foregoing it is obvious that
the cost of labor is not a major factor
in the cost of a house, despite the fact
that the general public thinks so.

It is equally obvious that land costs
and finance charges constitute the real
barrier to low-cost housing, Until such
time as speculation in land is held in
check and interest rates are reduced,
housing costs are going to remain rela-
tively high.

High interest rates not only add sub-
stantially to the cost of erecting a
house, but they also add very substan-
tially to the cost of buying a house on
a mortgage plan.

A $20,000 mortgage for 30 years at
6 percent involves a cost of $120 a

POSTPONING MEDICARE ‘SELL-OUT’

economy, | Ke

F bai Sens
YAQe eh of +e ¥ WIT

But this comment “unfortu-
nately seemed to be largely lost”
in news reports on the budget.

Mr. MacDonald said a meeting
of federal and provincial author-
ities on medicare is planned
soon. He hoped “‘the federal gov-
ernment will remain firm and
fulfit the promise it has made
to the Canadian people.”

“To say that adequate service
is already being provided is sim-
ply not true. Every few weeks
in some part of the country we
have the disgusting performance
of radio announcers or news-
papers pleading for public sub-
scriptions so that some poor
child or other individual can re-
ceive urgently needed medical
or surgical attention that is not —

normally available.” eae

want and should have.”

human needs.”

also stated:

tions and associations;

be tay fot
é Wiel ae EQ

There was a start on medi-
care this year “but now we find
the big propaganda guns boom-
ing again in an effort to force a
watering down and to undercut
the effective implementation of
the kind of plan that, Canadians

This was “a crystal clear ex-
ample of our failure to recognize
and grapple with fundamental

In a wide-ranging speech, he

@ While union membership
totals about 2,000;000, another
500,000 Canadians are engaged
very vigorously in collective bar-
gaining through other organiza-

_ @ Occasional strikes and lock-
outs ‘area ‘price: Canadians must

month or $43,200 over the entire life
of the mortgage,

A $20,000 mortgage for 30 years at
7 percent costs $133 a month and
$47,880 over the entire life of the mort-
gage.

This figures out to an ultimate in-
crease of $4,680 additional for 1 per-
cent in interest rates.

Obviously then, home buying will
remain out of reach of the people in
the lower wage bracket until such time
as interest rates are brought down to
a reasonable level.

e

Despite these startling figures, the
home building industry is still concen-
trating much of its efforts to reduce
building costs on holding down the

~ wage rates of on-site labor.

Along this line, Richard W. O’Neill,
editor of House and Home Magazine,
sees little prospect of prefabrication re-
ducing house-building costs substan-

tially. In an article in his magazine, he .

says:

“Attempts to cut the cost of housing
by putting it on an assembly line have
reduced construction time, to be sure,
but the structure of the dwelling unit
itself is not a big cost item,

“Saving money on the structure is
usually a drop in ‘the bucket compared
to the cost of land, financing, overhead,
and the various appointments within
the structure itself.”

Alhough the study made by the Na-
tional Research Council was made in
1965, the ratio of the various costs have
changed very little since then. In fact,
the percentage of the cost of a house
attributable to on-site labor has prob-
ably decreased in the interim, since new
materials and methods of building have
entered the picture since that time.

All those poses a challenge to the
construction industry to get the story
of the true breakdown of the costs of
buying a house over to the general
public.

—Reprinted from the Carpenter, Sep-
tember 1968—official publication of
the United Brotherhood of Carpen-
ters and Joiners of America.

pay for the preservation of the
democratic process of collective
bargaining unless someone
evolves a better method of set-
tling disputes, .but compulsory
arbitration “simply will not
work.”

@ The labor movement has
done considerably more than
most other groups to combat
poverty, and he hoped that the
findings of the Economic Coun-
cil of Canada’s fifth Annual Re-
view would arouse others and
strengthen labor’s own efforts.

® The Ontario minimum wage,
recently raised to $1.30 an hour
from $1.00, on a 40-hour week
basis still provides an annual in-
come of only $2,600 — below
the poverty level for even small
familiés. -'-° tA. oe

tower ga" be

PACIFIC“ RIBUNE NOVEMBER 8, 1988" “Page 5 *

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