Key Takeaways for Decision Makers
EQUIPMENT MANAGERS: As engine standards are changing, mechanics wages seem to be increasing. It’s important to account for these changes in order to accurately calculate ownership and operating costs.
In 2004, the Environmental Protection Agency signed the final rule under the Clean Air Act which introduced the Tier 4 emissions standards. These ambitious emissions reduction standards for off-road diesel equipment were to be phased in over the period of 2008-2015. Over the past couple of years EquipmentWatch has taken a deep dive into the impact that Tier 4 regulations have had on ownership and operating costs (see Tier 4 Benchmark Report). One thing that was consistently mentioned was the extra training that mechanics needed due to changing Tier 4 engines. This extra training in turn has caused a significant increase in hourly mechanic wages over the years.
The graph above displays exactly how hourly mechanics wage per hour has increased over the past 20 years. From 1997-1999 the average hourly mechanics wage was $27.15. As Y2K hit, mechanics saw a 17% increase in their hourly pay. The hourly rate continued to steadily increase and by 2005 mechanics wage had increased another 22%, after Tier 2 standards were phased in to many heave equipment models. From 2005 to 2008, which coincides with the phasing in of Tier 3 standards, the hourly wage increased by almost $10.00. From 2008 to 2015, when Tier 4 phasing was underway, mechanics wage increased 16%, and it continued to increase through the end of 2016. Tracking these increases is incredibly important as they have proven to have severe impacts on ownership and operating costs.