Saturday, January 31, 2009
Spending $6.25 to save $2.00
So WINZ and ARC staff are forbidden to use the new Northern Toll Road, unless of course they wish to pay for it out of their own post-tax incomes. (Which I'm guessing they probably don't).
Note that use of the toll road saves, on average, 10 minutes (each way) on a north-south journey in the Orewa/Waiwera area.
Some conservative assumptions suggest that these numbskull organizations are paying $6.25 in wages/salaries in order to save $2.
Given an average hourly rate of $25/employee and an average of 1.5 employees/vehicle, the "extra" 10 minute diversion costs $6.25 in wages. Each way.
So a return voyage in which using the toll road would save 20 minutes actually costs these organizations $12.50 in unnecessary labour costs, while saving them a mere $4 in tolls (and perhaps a little more in adminstration costs). So a net cost of about $8.50 then.
I'll not really consider the administration costs, as I'm not considering the extra fuel costs either. By cutting out 4km of driving - specifically over that break-neck hill around Waiwera, and through the interminable stop-start roads of Orewa - I'd wager the tunnel saves on average 0.5L/fuel per trip. Let's cost that at $0.75 ($1.50 for a return). And then there's the wear and tear, and depreciation of vehicles to consider too.
The break-even point (considering only 'lost' wages) is a single employee in the vehicle earning $12/hour (Calculation: $12*(1/6)=$2). In a curious coincidence, that's the minimum wage. And I don't think these organizations employ too many people at the minimum wage (despite the best intentions of, e.g., Rodney Hide).
It's one thing for private organizations to waste money and act like idiots, but WINZ and the ARC are funded by taxpayers and ratepayers respectively.
Smarten up, morons.
Note that use of the toll road saves, on average, 10 minutes (each way) on a north-south journey in the Orewa/Waiwera area.
Some conservative assumptions suggest that these numbskull organizations are paying $6.25 in wages/salaries in order to save $2.
Given an average hourly rate of $25/employee and an average of 1.5 employees/vehicle, the "extra" 10 minute diversion costs $6.25 in wages. Each way.
So a return voyage in which using the toll road would save 20 minutes actually costs these organizations $12.50 in unnecessary labour costs, while saving them a mere $4 in tolls (and perhaps a little more in adminstration costs). So a net cost of about $8.50 then.
I'll not really consider the administration costs, as I'm not considering the extra fuel costs either. By cutting out 4km of driving - specifically over that break-neck hill around Waiwera, and through the interminable stop-start roads of Orewa - I'd wager the tunnel saves on average 0.5L/fuel per trip. Let's cost that at $0.75 ($1.50 for a return). And then there's the wear and tear, and depreciation of vehicles to consider too.
The break-even point (considering only 'lost' wages) is a single employee in the vehicle earning $12/hour (Calculation: $12*(1/6)=$2). In a curious coincidence, that's the minimum wage. And I don't think these organizations employ too many people at the minimum wage (despite the best intentions of, e.g., Rodney Hide).
It's one thing for private organizations to waste money and act like idiots, but WINZ and the ARC are funded by taxpayers and ratepayers respectively.
Smarten up, morons.
Labels: $6.25, arc, auckland, money, motorways, northern toll road, winz
