Thursday, January 16, 2014

One Mans Trash is Another Man's Riches

Written by Justin Leeds
One Mans Trash is Another Man's Riches


Normally working in and around the garbage industry is not a glamorous job. It is never a compliment when garbage and your work quality are thrown in the same sentence. To make the men and women working in this field feel better we changed the official name to sanitation engineers instead of garbage men but did you know that Waste Management had a net income of 953 million dollars in 2013? Not bad for a job where you hire people without college educations. It takes no genius to see the outstanding grow over 2013. But how does a company that cleans up your trash make so much money?


Waste management is oligopoly where subdivisions decide which provider to choose from. It is not the only trash company but it is the largest in both services and How can a company that collects garbage make so much money you might ask? It is actually quite simply the marginal benefit of paying someone to dispose of your trash way outweighs the cost of the collection itself. Most people value garbage removal of trash so much that they will pay on average 385 dollars a year with some people paying up to nine hundred dollars. Personally I am a fan of peopling paying to get there garbage removed(hope you are too) compared to the medieval times where people would throw garbage out of their window and down to the streat. This garbage would sit in the street until the rain water washed it downhill to someone elses property.  

With more recycling the income just keeps flowing into Waste Management. Waste Management owns the 16 waste-to-energy facilities with and five independent power-production facilities, which specialize in collecting municipal solid waste and transforming it into renewable electric power. Some of Wheelabrator’s facilities are also capable of generating electricity from materials such as waste wood, waste coal and natural gas. Also there are 134 recycling plants 111 beneficial-use landfill gas projects and six independent power production plants. This company is growing and changing into days time to make efficient clean energy. Even though there are many ways to make clean energy most of them are not that efficient leading to wasted materials.

In my opinion the garbage industry is the a premier example of how the government doesn’t need step in for less desirable jobs. Private industry can take over for many of industries that the government now poorly works with. If more companies could take over poorly managed government systems the US would be a lot less in debt.

Waste Management offers environmental services to nearly twenty seven million residential, industrial, municipal and commercial customers in the United States, Canada, and Puerto Rico. Not bad for a company that started in 1971 when , Harm Huizenga, a Dutch immigrant, began hauling garbage at $1.25/wagon in Chicago.


Works Cited

Grow Profits Using GM's. (n.d.). Retrieved January 12th, 2014, from http://www.triplepundit.com: http://www.triplepundit.com/2013/08/grow-profits-gms-waste-management-best-practices/

Waste Management. (n.d.). Retrieved January 13th, 2014, from Yahoo: http://finance.yahoo.com/echarts?s=WM+Interactive#symbol=wm;range=1y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Waste Removal Cost. (n.d.). Retrieved January 13, 2014, from homeadvisory: http://www.homeadvisor.com/cost/cleaning-services/remove-waste/

22 comments:

  1. You really helped to explore the economics of an industry that most believe to just be a joke. Of course, a question that this arises, is that if the company made an income of nearly a billion dollars; could other such terrible industries stand to make near as much profit? It's an interesting fact that there is some millionaire garbageman out there.

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  2. This is an awesome topic Justin! I have never actually thought about our "sanitation engineers". I have definitely taken them for granted. It is interesting that, even without the government's help, Waste Management can be so successful. I think this is something the government should learn from. There are other areas where the government's subsidizing or other form of aid is really hurting the economy. Yes, almost all government aid creates an efficiency loss, however, I think there are areas where the efficiency loss outweighs any sort of benefit. Personally, I believe the government should avoid subsidizing farmers as much as they do. These subsidies not only hurt the US economy but also the global economy, since the US has forbidden Africa, and other nations, from subsidizing their farmers. They did this to make sure the US maintains their farming while many African farms are left with rotted fields. Great topic!

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  3. This is such an interesting topic to choose! I actually have a friend whose parent is a "garbage man" and she has told me several time that they actually make really great money. It is a very dirty job though and it must be hard on their bodies lifting heavy trashcans all morning, but it would definitely be worth it if you're making enough money to be comfortable in this society. Especially it being people who have not gone to college or possibly even high school drop outs! But hey if it makes the money you need why not just work hard for a good 5 hours?

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  4. That was such an interesting viewpoint! It had never occurred to me that private garbage collection existed, but it makes sense. Most of us live in suburbs, where dumping garbage outside our house would invite significant public embarrassment, causing us to pay for garbage collection. Maybe in big cities or rural housing, people care less about the image of their neighborhood, and in this case the government may have to step in and pay for the collection themselves. But in the case of suburbs, I could definitely see a private collection system flourishing, with more efficiency and more economic growth for the entire community.

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  5. I agree with you, it would be interesting to see what would happen if garbage collection was turned over to a private company. Garbage collection is obviously something very important in our economy, and it needs to be run efficiently and effectively. If a private company were to run this, the revenue that they could make is huge. I really liked how the graph shows this increasing at a steady rate over the months. This is a very profitable industry, and I did not realize this before reading this.

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  6. Nice post Juice. Going along with what Tanner has mentioned, this topic brings forth the question of what other businesses may be capable of doing in order to cut down on waste and possibly manufacture energy with it or other useful commodities. If Waste Management decides to invest more of their massive profits back into cleansing their own industry (renewable energy waste vehicles), it may be a large step towards setting examples for other businesses to become more environmentally sustainable.

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  7. Interesting topic, I actually read something about this before but am surprised that no one brings it up. Garbage is such a large part of our lives, and having all of that waste go to good use in clean energy is something that I am for. By looking at your graph, I cannot believe Waste Management has been doing such a great job this past year. What you said about private companies stepping in to help out is the future of garbage collecting. I believe more people should be aware about this idea. Good job Justin.

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  8. Surpising how that the waste management companies can make more money that curtain people. Then again it would make sense becasue people normally won't want to pick up garbage. So that is why they pay people more so they have more modivation to work in the waste management company. Some one has to clean up garbage so that is why they have sanitation engineers to halp that issue.

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  9. Its really interesting that their being payed to remove the waste, then using it to create usable energy, and being payed for that too. i believe that this is a business that will almost never have a downturn in profits, since people wont stop suddenly having waste, or stop wanting electricity. I think its great that they're actually using the garbage for a reasonable cause, rather than having it sit in a landfill.

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  10. It's really strange to know that garbage men are making good money by taking our garbage and removing it. But, going through the process I see how it can be a valuable trade. The fact that they can convert the garbage into usable energy is amazing. It will not have any negative externalities except the fact garbage is a negative externality itself. But the fact that using garbage for a reasonable cause of turning it into something useful makes it a positive externality that is a public good and can affect the whole world.

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  11. I had no idea that Waste Management made so much money! I guess it makes sense because we rely on them so much. It shouldn’t be such a pitiful job because in the end; you don’t need experience for the position, there will always be a demand for the job, and it is great for the environment. Honestly I gained a better perspective and a greater respect for this job. Waste Management really has come a long way.

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  12. It is amazing how important some jobs like this can be. When thinking about it, garbage men to not seem very useful, but without them it would be a drastic difference. Each job plays an important role in both the society and economics of the United States. Without them, the distribution of garbage, and the reuse of products for energy and other products would not be as easy or efficient.

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  13. Before reading your post, I really didn't know that they made so much money. It is so interesting, and people really do take advantage of their job. If people were not picking up our trash, there would only be two options. Either it sits there and rots and smells bad, or we take it to a dump ourselves. But, we need Wast Management in our lives to help us keep everything clean. Trash is something that will never go away, so the demand will always be there. A job in this field would be very nice considering the pay and law of demand!

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  14. As stated by you, this is a prime example in which the private sector is better off handling the scenario rather than the government. Another thing to take into consideration is the fact that with the growing population, waste disposal will be ever so important to maintain the health of the earth. If we just let food rot on the streets, not only will the air be polluted with smell, but the quality of living might decrease too. Also this is just dealing in the United States with Waste Management, in many third world countries such privileges are not available; therefore, it might not be a bad idea for the countries with a stable environment to step in and deal with the issues that may come.

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  16. I thought your topic was interesting in a sense that not many are aware of the large amount of money that this business is bringing into our economy. I also thought it was good of you to include the reasons why this job is so valued, and explored some instances that show how our world may be if this business did not exist (garbage would simply wash away down the street and only create more problems). The graph, in my opinion, was a very helpful tool in understanding just how much this career brings in. The way you remained respectful to those who work in this industry while also bringing to light the fact that we greatly underestimate their income was also very nicely done.

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  17. This is a very crucial job in today's society. It's important when it comes to economics as well because we are paying the workers more to remove the garbage than we are paying for the products to remove it, such as the garbage trucks. These men are making good money to do this job, even though they should because its hard labor and not all that pleasant. Without the garbage men, we wouldn't be able to reuse the waste for energy and they would all end up just washing away somewhere. We are able to take the garbage somewhere now and make it useful because of garbage men. This is an essential job in society, even if it may not seem like it.

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  18. I remember watching the program Undercover Boss and they had the CEO of Wast Management go under cover and that's when I learned that the company was a mutli-million dollar company, and I'm glad you focused on one of the most overlooked companies that really is crucial to our health and the quality of our lives. The employees for the company overall have to do quite a bit of labor and most people think it's easy jobs when in reality they usually require focus, speed, and even strength. Without these people to sort our trash and clean up after us, we'd be living in our own waste, in our own, filthy, gigantic dumps and our quality of life and health would be extremely low. It's fairly certain that this company would be making a great amount of money: garbage disposal is one of the best ways to maintain the public's health and to maintain stable jobs, thus prospering the economy.

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  19. I found your post to be very informational I never knew that you could make so much money for collecting trash. I have heard that garbage men made lots of money but I never thought that they would have made that much. It’s amazing how the company started in 1971 with charging $1.25 and now just 43 years later they are a 953 million dollar company.

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  20. I'm glad I read your post because I had heard once that garbage men made a significant amount of money but couldn't bring myself to completely believe it! But if you really think about it, the amount of work they do no matter what the weather is, I believe that they deserve it one hundred percent.

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  21. I never knew how successful someone could be with a job in waste management or even that this type of job was separate from the government. I would definitely agree with you, too, that the marginal benefits outweigh the marginal costs. I can't imagine if we had to get rid of our trash on our own now! I also think it's interesting how many different facilities that are involved in Waste Management and that they're able to do so well without government funding. This is definitely something that our society should keep supporting.

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  22. In other countries, some garbage can even be sold to make musical instruments. This makes the trash industry in some South American locations one of the most profitable industries. http://www.mnn.com/lifestyle/recycling/stories/the-recycled-orchestra-musical-instruments-made-from-trash
    It's amazing how one of the jobs that our society often looks down upon can actually be so successful. However, the marginal cost of such a job could outweigh its marginal benefits, such as not being able to experience a college education (although you certainly can if you can afford it, but it isn't imperative to have the job) and not being able to seize other opportunities in life that require a degree.

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