Tuesday, September 25, 2007

Where is the service in service economy?

Today I was looking for a different kind of help than yesterday. For simple, manual labor: a move-out apartment cleaning, carpet cleaning, window washing, loading and unloading those belongings I decided to store and those that will go to a charity, but are too bulky/heavy for me to handle on my own.
Until now, whenever and wherever I moved withing the USA, I had no trouble finding that kind of services as I needed them and at acceptable prices. No such luck today.
Well, yes, I found 10 firms offering cleaning services in town and 12 more around town. So far so good. But here the "good" part of the story ends. Most of those firms did not answer their phones or did not return my call. Out of the remaining firms I got three bids. One cleaning service wanted $100/hr for two cleaning ladies with a two hour minimum, the second wanted $225 firm price and the third did not really know how much they were going to charge, but they assured me that the price would "certainly be reasonable"!!! I kid you not!
And no, this is NOT a typo: the service firm wanted $ 100 an hour for sending two cleaning ladies. The cleaning ladies would, most probably be Latino immigrants, who would be lucky to get paid $7.50 an hour each - if that much.
Thus the service firm's direct labor cost for these ladies would be $15 = 15% of the quoted fee!
OK, let's be fair and add to that some indirect labor costs (though I doubt they carry much, if any, of them) supplies, equipment, transportation (if they pay for it, which I also doubt), liability insurance, overhead, administration, advertising, taxes. Let's be generous (well, they might be less than efficient) and assume that the total cost of the service they provide is 25%-30% of the fee they demand. That comes out to a 70%-75% of pure profit! Talk about US still being a land of opportunities!
This pattern repeated itself concerning moving help: similar prices, similar assumed profits.
Where, on earth is any serious, willing to get business competition? Is there no unemployment, no beginning of a recession? Is this situation now typical for the USA at large or just for this particular corner of the Bible belt? And why? Questions, questions.
Ah, well, since I can't get any service from the service firms at a price I am willing to accept, I guess the only thing I can do is to go tomorrow early morning to a place in town where day laborers gather, talk to them - luckily I speak enough Spanish - and hire myself cleaning and moving helpers for about $15 an hour.
I'll have to do my own recruiting, hiring and supervising - but at least the profit will be all mine.
USA has a well developed service sector - I'm sure you heard that time and time again. It was once true, but does no longer seem to be, even as unemployment is rising. Sad and unbelievable!

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