The Economics of Archaeology Part 3: Why Wages are Low and Why you Boss in Not a Heartless Bastard(maybe)

Posted on February 18, 2013

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In part one I talked about how lowering wages will not stop under cutting and in part two of this series I discussed why unions are not the solution. In this part I will discuss why your wages are so low. Yesterday, I mentioned some readings on the topics of heritage laws in England and Wales and I think this quote sums up best their brief experiment with quality over quantity heritage laws-

“Of even greater concern than the two ‘cons’ outline above is the fact that the NPPF returns us to an agenda based wholly on conservation, and the emphasis given to public and research benefits found in PPS 5 is largely lost. There is much less (virtually no) policy on public engagement and archives. This is a regression, since the NPPF is very narrowly focused. There is little sense of ‘value added’ in terms of either research or public engagement. The NPPF is entirely process driven: archaeology as an ‘issue’ to be resolved by the planning system, ideally at the lowest possible cost. It encourages the idea that archaeology is a negative problem, not a positive thing to be embraced that might result in unexpected benefits of all sorts, social, cultural, environmental, even economic. The policy also reinforces the assumption that resource conservation is the principal goal of archaeological endeavour, without any recognition of the need to identify and realize value.”

This is not unique for England and Wales but pretty much sums up almost all heritage laws as they are currently enforced. I say enforced because there is debate about how the laws should be interpreted and acted upon, I point you towards Tom King and his blog on the subject. Archaeology is looked at as an issue to be resolved at the lowest possible price. Now this is not always the case, lowest possible price that is. Occasionally, you find a manager that does the math and realizes that delaying construction a day will cost him x amount (usually in the tens of thousands). If he just paid the extra $10,000 to insure that does not happen than it’s worth it. In other words, good archaeology becomes a protective cost of businesses just like buying insurance.  If the project is large enough, and is has to be to be cheaper to pay for good archaeology, than the costs for archaeology can be inconsequential. In cases like these, those low ballers and undercutting will actually lose out as the risk reward is not great. The problem is that a project has to be that big e.g. very large expensive projects, usually government or oil pipeline, but not always. Almost all projects currently are not even close to this threshold. This was not always the case but even in better times the majority of jobs were small projects.

Furthermore, these large projects tended to get given to large environmental consultants or in house teams that would than sub-contract down to smaller CRM companies. Now depending how their contract was written they could in turn look for the cheapest company and pocket the difference. So even in the project manager wants quality he is so far removed from the project that it still doesn’t matter, cheapest bid wins. In other cases, these large organizations will actually pick the more expensive option. What? you say, that makes no sense, you say! That is because in some cases they have to justify where money is going, who to, and why. That means those paying for are questioning why they are seeing bills from archaeologists for x amount and a bill from you for y amount. Sometimes people can get away with justifying the difference. In cases like that though it is easier just to take a small percentage of a higher cost. The primary contractors are usually taking  a management fee for their time to sub-contact and as I have said before 5% of 100,000 is more than 5% of 10,000 (the magic of math).

This has gone into a bit of a ramble but what I am trying to demonstrate is that this is no one set of criteria for getting work it could be the cheapest or the best. BUT at least 9 out of 10 times (me being generous, might be 19 out 20 or 99 out 100) it is the cheapest option that wins out. To demonstrate this I will use my research project area, located west of Carlsbad NM. About 450 sq. miles extensively surveyed (about 60 square miles or 14% of the total) and a little under 900 known sites and yet exactly one commercial excavation in this whole area. Here development is almost exclusively driven by oil and gas production but almost all of the land is managed by the BLM. So instead of having to deal with multiple land owners the developers can simply deal with the same owner (technically the US people) and move their well 100m North, West, etc. and avoid whatever site might be found. In cases like this there is absolutely  no insensitive for quality. They don’t need to worry about disturbing anything, all they need to worry about is getting the box checked for archaeology work.

So when all you need is a box checked with no fear of ramifications (e.g. someone finds something later that delays construction) then why are you going to pay top dollar? Your not, you go with the lowest possible bid even if the difference is $5. This is why your wages are low and not under cutting. I have been on projects that have won because they were $60  cheaper than the next bid, we were told that is how we got the bid, and it was a several thousand dollar project. Stop and think for a moment, the difference of probably .006 made the difference between getting work and not getting work. The buyer of your service is just looking to check a box and may or may not understand the difference between the bids. What they do know is they look very similar but bidder A is slightly cheaper than B but not so cheap that he wonders if it is a scam. In this case, he may not understand archaeology but he understands numbers and that is what drives his decision.

In part 1 I talked about how you could cut a digger/shovelbums wages down to minimum wage in the UK or US and it would not make a difference for under cutting, well in this case it makes a huge difference. Cut a diggers wages to the min. and you suddenly found that $60 in the project that you needed to get the bid. It is the tiniest amounts of money that make the difference between getting a job and starving (when no one is under cutting). That is why wages are always so low, raising them $1 could literally cost you work and thus the company.  Or even offering free coffee to everyone at work. Ever worked with old tools? Ever asked for a 20 cent raise and been told no? Ever had to drive to the site on your own? There is a reason, the system is set up to keep costs down and pretty much little else.

Now Chris (PS see his blog Random Acts of Science)  on my last post made a great comment, and since the comment is public I imagine he does not mind me sharing it:

My own philosophy, untested as of right now, about raising wages involves simply cutting costs and reducing overhead. Every firm I’ve ever worked for was bleeding money from everything they did. Whether its the office that’s way too big, the GIS people that don’t have 40 hours of GIS work, or the out dated field recording methods that cost the firm and the client time and money.

I believe I can reduce overhead by at least 50% and likely way more just by changing the way business is done in this industry and by thinking like its 2013, not 1983. Gone are the days of armies of people typing up site records in order to meet a report deadline. We are living in an era of tablet computers and cloud storage. It’s time to take advantage of those resources and pay our field techs, the backbone of all archaeology, a fair, livable wage.

I personally think Chris brings up a great point, waste can and should be cut. Unfortunately, I think many people in archaeology see those in management positions in archaeology as this:

Mr Burns the Archaeologist

Mr Burns the Archaeologist

When in actual fact the reality is more like this:

Damn it Jim!

Damn it Jim!

This lack of business …, a jen se qua business sense?, results in aspects that make them appear to be like image one, when in fact they are really closer to image two. Take for example the owner who does manage to keep costs down, maybe to the begrudging of his employees. Well at the end of the year there is a very healthy profit and he/she thinks to themselves brilliant that is profit all for me. They then take that money out of the company as dividends or what not. That is usually a huge mistake as archaeology goes in cycles. When a down turn hits there is no money in the company to make it through the lean times. The owner either has to forgo their salary or start to let people go. The last option actually hurts more because, as I mentioned in the last parts, there is a low barrier to entry in the field and sole-traders can cut costs more. So when the company lays off all of its project managers they go into business for themselves and out bid their former employer taking away more business. They may even take their links to regular work with them which then deprives the business of money. You would be amazed at how many CRM companies have gone this way and did not make it. So what may seem like greed is just plain stupidity.

That all being said there are true Mr Burns out there among us, just like in the real world. They will screw every penny out of you and not care but, like I said, that happens everywhere. Back to the point on hand though from Chris, improvement in efficiencies can cut costs and allow wages to rise but again only so much. Cut overhead 20% and raise wages 15% will get you higher wages and still bring in work but then people emulate the cost cutting measures you did and your back to having to cut wages (or maybe your way to cut costs was to cut wages). Moreover, you can only raise wages as much as you cut overhead, so we are only talking a few % points, nothing that is going to get people to land of milk and honey.  That being said, I would still take a 10% raise any day.

A problem with increase efficiencies is that there is a dark side to this. To quote Chris again:

“Gone are the days of armies of people typing up site records in order to meet a report deadline.”

I have spent many days typing up had written reports that could have been solved by entering them into a tablet in the field. The thing is, I spent PAID days entering in this info. Some gains in efficiencies come at the cost of hours worked. In  other words, unless one is salaried than we will be potentially trading higher wages for fewer workers. Good for the person that have work but bad for other 199 who applied for that job. In the future we may have better paid archaeologists but fewer of them. Also, one has to wonder how long these developments last before everyone adopts them and are back on the same footing, starting the cycle of trying to cut costs yet again.

As I see it there are two paths to solve this problem (neither involve cutting wages): One, is to develop a patent on some sort of intellectually property that allows one man to do the work of ten. That way other archaeologists can not adopt the same technology (at least for the length of the patent) and there will not be a downward pressure on wages/overhead as you will always be able to match everyone else. Two, change the laws. If archaeology was no longer a check box but graded on quality then you may have a different situation. Imagine if you would that you are not graded on how low you can keep costs but by how much you could expand our understanding of past people, within a reasonable price range. I don’t know who would decide what constitutes expanding our knowledge or what a reasonable price is but it would be a different world.

While I understand all of the companies that went to the IfA to remove the minimum wage for archaeologists, they have concerns about that £5 underbid (not under cutting cause at that difference in price you offering the same thing, one just happens to be slightly cheaper because they buy the cheap coffee), it is a losing strategy. All of those companies should have put their efforts into either gaming the system (get patents) or to changing it. All they have done is set the bar slightly lower and it is only going to get lower because that is how the system is set up- drive costs down.

I finish by imploring those who follow a similar strategy as those ROs and the IfA, please stop playing the same game, we all lose in the end, and start looking at ways to change the rules.

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