Then & Now - A Half Century of Change

THEN

When I first had any association with the scrap metal business I was a very young lad. Long ago, I remember my grandfather sitting on a box scraping the insulation off copper wire with a knife. My, my, how things have changed!

A lot of the differences are in the cost of operating. The cost of labor, insurance, fuel and equipment was much less years ago. Companies did not need that much equipment. Labor was plentiful and operators tried to pay a living wage, but there were few benefits involved.

Social Security costs were reasonable. Insurance, workers’ compensation—everything that had to do with running a business—was within reach financially.

The investment for storing inventory was not as costly either, and the material itself did not cost as much. Copper scrap was 20 cents per pound. Brass was 12 cents; aluminum was 6 or 7 cents, and steel scrap was $15 or $20 per gross ton.

Furthermore, banks were always there to help reliable customers. There was not a problem with getting a loan to carry you through slow times.

Today operating costs are extremely high. Years ago, most operations were non-union. Today, owners are competing in some respects with steel mills and automotive and manufacturing sectors that have very high hourly rates for employees.

Now the benefit costs are extremely high. Offering health insurance, retirement plans and 401(K)s are expensive. Insurance today is a huge budget item within the operations overhead, and includes workers’ compensation, auto insurance and equipment fleet insurance.

Additionally, the equipment needed today to operate is extremely costly, and therefore the investment in building and maintaning a plant ties up many dollars. The innovation of auto shredders, big shears and cranes, as well as front-end loaders and bulldozers to move the material has become a huge investment. Material handling has became much more efficient, but at a very high cost.

NOW