Hourly wage rates

Operating Labor The cost of operating labor is the second largest item of expense in the manufac turing cost. Labor requirements for a process can be estimated from an intelhgent study of the equipment flow sheet, paying careful attention to the various primaiy process steps such as frac tionation, filtration, etc. The hourly wage rate should be that currently paid in the company. Once the number of persons reqiiired per shift has been estimated for a particular production rate, the annual labor cost and the labor cost per unit of production can be estimated. 

In general, operating labor may be divided into skilled and unskilled labor. Hourly wage rates for operating labor in different industries at various locations can be obtained from the U.S. Bureau of Labor Monthly Labor Review. For chemical processes, operating labor usually amounts to about 15 percent of the total product cost. 

Table 1. Hourly Wage Rates of Craft Labor in Selected U.S. Cities 802...

Hourly wage rates of craft labor in selected U.S. cities ... 

L = Labor charge per hour = 1.43 times hour-wage rate of craneman,... 

Table 27. National minimum hourly wage rates 1999-2006...

Maintenance and Direct Labor Costs Maintenance and direct labor costs will vary considerably depending on variations in hourly wage rates, unit size, cleanout frequency, and so forth. Equipment manufacturers can supply an estimate of the manpower requirement for direct and maintenance labor for a given piece of equipment. 

Average hourly wage rate is 30/hr with two operators per shift. Profitability Analysis Project a 15-yr life for the plant. 

The base case of the aqueous Kolbe-Schmitt synthesis of 2,4-dihydroxybenzoic add is calculated with a five-tube reactor allowing a theoretical production rate of 4.41 p.a. (assuming 8000 h p.a.). The product-related fixed cost of about 1 per kilogram of product, derived from the investment cost by dividing by the amortization time of 7 years, are very small compared with the operational costs of 91 kg . The main and approximatdy equal portions of the operational costs are the raw material cost and operator salary when a quarter of the hourly wage rate of manpower is assumed (Figure 13.7). 

Assistance reg. commissioning and training of operating staff on T M basis at an hourly wage rate of 120.00 /hour... 

For this example, the adverse direct-labor cost variance of 3401 is due to both a hi er wage rate per hour and a higher number of labor-hours. 

The direct-labor-cost variance can, if necessary, be broken down into a direc t-labor-idle-time variance in addition to the direct-wage-rate and direct-labor-efficiency variances. The direc t-labor-idle-time variance is simply the number of idle labor-hours in the period multiplied by the standard wage rate. This is rarely relevant to the conditions existing in process plants except when maintenance is involved. 

Labor Expenses. In the majority of situations, projects will cause a company s labor requirements to change. This change could be a positive effect that increases available productive time, or there could be a decrease in employees production time depending upon the practice. When computing labor expenses, the Tier 1 costs could be significant. Labor expense calculations can be simplistic or comprehensive. The most direct and basic approach is to multiply the wage rate by the hours of labor. More comprehensive calculations include the associated costs of payroll taxes, administration, and benefits. Many companies routinely track these costs and establish an internal burdened labor rate to use in financial analysis. 

Shift Job Title No. Hour/ Day Wage Rate ( ) Daily Wage ( ) Per Diem ( ) Daily Total( )... 

The hourly wages in the French chemical industry are high compared to other major countries. In fact, the rates are about 10% higher than in the United States, but the labor efficiency is not as high. 

What if you were offered 1 million to count from 1 to 6 X 10 at a rate of one number each second Determine your hourly wage. Would you do it ... 

Once each benchmark job is ranked on each factor, the next step is to allocate the crrrrent wages paid for each benchmark job among the compensable factors. Essentially, this is done by deciding how much of the wage rate for each benchmark job is associated with mental demands, how much with physical requirements, and so on, across all the compensable factors. This is done for each benchmark job and is usually based on the judgment of a compensation committee. For extunple, in Table 2, of the 5.80 per hour paid to the punch press operator, the committee had decided that 0.80 of it is attributable to the job s mental requirements, another 0.80 is attributable to the job s experience/skill requirements, 2.40 is attributable to the job s physiceil requirements, 1.10 is attributable to the job s supervisory requirements, and 0.70 is attributable to the job s other responsibilities. The total 5.80 is thus allocated among the compensable factors. This process is repeated for each of the benchmark jobs. 

Calculating the direct cost associated with lost work hours involves compiling the total number of lost hours for the period in question and multiplying the hours times the applicable loaded labor rate. The loaded labor rate is the employee s hourly rate plus benefits. Benefits vary from company to company, but typically inflate the hourly wage by 20 to 35 percent. An example of how to compute the cost of lost hours is shown here. 

In this example, the company lost 400 hours of work due to accidents on the job in the fourth quarter of its fiscal year. The three employees who actually missed time at work formed a pool of people with an average loaded labor rate of 30 per hour ( 25 average hourly wage plus 20 percent for benefits). The average loaded labor rate multiplied times the 400 lost hours reveals an unproductive cost of 12,000 to this company. 

Within the wage and hour area, safety professionals should be aware of the Equal Pay Act of 1963, which is an adjunct to the ELSA. This law addresses discrimination in wage rates based on the sex of male and female employees doing jobs that require equal skills, efforts, and responsibilities and performed under similar working conditions, unless the company or organization can justify the difference through one of the exceptions. Safety professionals should be aware that in 1978, the administration and enforcement of the Equal Pay Act was transferred from the U.S. Department of Labor to the Equal Employment Opportunity Commission. ... 

The Maine minimum wage is automatically replaced with the Federal minimum wage rate if it is higher than the State minimum with the exception that any such increase is limited to no more than 1.00 per hour above the current legislated State rate. 

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