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The US has forgotten how to do infrastructure
- Apreche 9y agoIt costs extra because CORRUPTION. They're skimming off the top at every level, and that's why they can't let anyone investigate.
- richardwhiuk 9y agoWhy is this corruption particularly endemic in the US and not in other major western countries?
- erentz 9y agoFrom my experience this kind of crony corruption is becoming more endemic in places like New Zealand and Australia. I can't speak for Europe.
- deleted 9y ago[deleted]
- sschueller 9y agoYep, but it's spreading. Just look at the disaster of the Berlin Airport.
- grecy 9y ago> It costs extra because CORRUPTION Come now, citizen, you used the wrong word. In newspeak the word is "Profit". Every company working on a project deserves to make profit, right? and they deserve to make more profit than ever before, right? So they made $100 million in profit 10 years ago, $1 billion last year, you know for sure they are going to make > $1 billion this year, otherwise they are an outright failure.
- Bulkington 9y agoIronically, the pinnacle of corruption was the way Congress swapped district-specific funding ("earmarks") in lieu of outright cash/votes swaps on non-transportation legislation. The "bridge to nowhere" system got burned in 2005 and long-term surface transportation funding has been a wreck ever since. Congress hasn't done much worthwhile since, either. Otherwise, a lot of the "corruption" is just federal contracting hoops and hurdles--again, in place, theoretically, to limit corruption. More irony: Republicans are, essentially, arguing that old-fashioned cronyism is more efficient and cost-effective. Last laugh: It might be. https://en.m.wikipedia.org/wiki/Gravina_Island_Bridge https://en.m.wikipedia.org/wiki/Gravina_Island_Bridge
- andrewmutz 9y agoI would like to read more about corruption in American infrastructure. Can you provide a link?
- shawnee_ 9y agoDeath by a thousand cuts. Because we are talking infrastructure, most of the corruption is happening at the city and county level where the permitting process happens. Nothing really ever so big enough as to garner national news (and maybe this is why it has gone unchecked for so long); lots and lots of misuse of local taxpayer monies, misappropriations, etc. I was reading recently about corruption in Jared Kushner's businesses; these detail some of the ways and means it happens: City approves large fancy tower complex, but construction company hires expensive out-of-state workers, fails to pay taxes that benefit local schools, etc. - http://www.baltimoresun.com/news/maryland/baltimore-city/bs-md-ci-harbor-point-protest-20130717-story.html http://www.baltimoresun.com/news/maryland/baltimore-city/bs-... - http://www.dailykos.com/story/2017/5/29/1665349/-Meet-Jared-Kushner-scumbag-slumlord http://www.dailykos.com/story/2017/5/29/1665349/-Meet-Jared-...
- grahamannett 9y agoYeah, was looking for a comment like this. While not an outright parallel, some of the similarities strike me as eerily similar to a recent article in the new yorker that discusses the russia-crimea bridge: http://www.newyorker.com/magazine/2017/05/29/putins-shadow-cabinet-and-the-bridge-to-crimea http://www.newyorker.com/magazine/2017/05/29/putins-shadow-c...
- phil21 9y agoAbsolutely this. And not corruption (neccessarily) in the form of "you give me $100k into my bank account and I'll approve the deal" type of corruption. Just simply incompetent (at best) people milking the projects for insane amounts of money while adding no value. Actually in many cases adding negative value. Basically low-level corruption like scheduling an extra couple construction laborers to a project that only needs half of what you assigned. It's the same problem with the means-tested entitlement programs in the US. Sure outright fraud (e.g. welfare queen) is not worth talking about it's so rare. But the day to day low-level fraud that is endemic and pervasive to the system? Never counted in any studies. The general incompetence and fraud has slowly (the older I get) become the norm. It's rare you come across competently done projects these days that are not swamped by fraud and waste. I guess my point is that it's so common it's simply become normalized these days, and people no longer even see it as fraud/corruption/sloth - it's simply the way things are. It's not just construction - it's practically everything. I guess it's pretty similar to cost disease.
- DisposableMike 9y agoWe haven't "forgotten" how to do anything. We just let ourselves (collectively) become OK with projects that extraordinarily long, slow, and expensive, and the contractors aren't going to be the ones to force positive change in the system.
- erentz 9y agoFrom my perspective infrastructure is politically driven in the US. Projects are debated for decades, over this time changes are made to placate some groups and buy the support from other groups, and create jobs for some politician, until it baloons into something that is many billions of dollars. Then it is built as a one off mega project. At this point it should be killed but this is seen as the only way to get stuff done. Things like CAHSR instead of agreeing on a goal and deciding we should have a CA-wide rail system, so then establish a division of Caltrans which we fund to incrementally build/acquire/run a network through ROW acquisition, running DMUs on the routes in the mean time, making it compatible with existing systems, etc. instead becomes one giant $60b acquisition that is master planned for a multi decade time frame to be built almost entirely as a stand alone system the benefits of which can't really be enjoyed until decades in the future.
- maxxxxx 9y agoI think the one off nature of projects is the problem. There is no coherent long term plan.
- jdc 9y agoAccording to Peter Thiel (in CS183), this lack of long term plan is a symptom of people believing that the future is indeterminate[1]. 1. http://blakemasters.com/post/23435743973/peter-thiels-cs183-startup-class-13-notes http://blakemasters.com/post/23435743973/peter-thiels-cs183-... (Section I. The End of Big Projects)
- scott_karana 9y agoAdmittedly, that belief was driven by the repercussions of failed bets on the future. Just look at pension contributions and retirement returns from the 60s to the 80s.
- Bulkington 9y agoMore broadly, systemically, the states still manage highway projects, for instance. The US federal government just funds them--although post-earmark programs (TIGER grants, federal freight projects legislation) have tried to address this. But, yes, there is no long-term plan because the federal funding system isn't set up that way. {Supply chain guy pet peeve; see also 'cooruption' comment below}. A certain portmanteau describes it perfectly: http://www.urbandictionary.com/define.php?term=clusterfuck http://www.urbandictionary.com/define.php?term=clusterfuck
- masterleep 9y agoBureaucrats, allied with progressives and public sector unions, work vigorously to make government as expensive and inefficient as possible. In the United States, they are succeeding very well.
- eduren 9y agoIf bureaucracy is the problem, then why only here? European governments are notorious for their large number of civil servants.
- krona 9y agoAhem. In the UK, the second high speed rail project, HS2 (which hasn't even started to be built) has so far awarded contracts totaling almost £0.5B to various management consultancy firms to produce nothing but checklists. It's an utter fiasco.
- germinalphrase 9y ago"Bureaucrats, allied with conservatives and private business interests, work vigorously to make government as expensive and inefficient as possible. In the United States, they are succeeding very well." In either instance, it's an absurd and simplistic statement to make.
- yequalsx 9y agoMedicare runs much more cheaply than private insurance companies. Since there are examples of where your claim is false suggests to me that you are possibly wrong. Do you have evidence of this conspiracy?
- 0xfeba 9y agoParty over country... just progressives huh? I seem to recall it being mainly republicans slashing budgets of various things they don't like (Welfare, the VA, Social Security, the IRS) and then shortly afterwards complaining about how ineffective those things are (failing to mention the budget cuts imposed) and how they should just be eliminated altogether.
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- michaelt 9y agoThat suggests that U.S. costs are high due to general inefficiency [...] Americans have simply ponied up more and more cash over the years while ignoring the fact that they were getting less and less for their money. There's a general effect in political systems, that if a law takes $20 from 1,000,000 people and gives $100,000 to 200 people, the people who lose money won't have enough incentive to put up a big fight; but the people who receive money will have more than enough motivation. For example, if a big irrigation project will force taxpayers to subsidise corporate farms, the corporations have a big incentive to spend on ads and campaign contributions. Or if you have to give $60 to a private company for tax filing software, they have a big incentive to lobby and make campaign contributions to keep the tax system complicated. I'm sure construction projects are subject to the same pro-waste incentives. I'm not sure what the solution to this is - campaign finance reform, perhaps?
- conanbatt 9y agoMilton Friedman: "The beneficiaries are concentrated, and the payers are diffused"
- sharemywin 9y agokinda like facebook.
- kelvin0 9y agoFB is free last I checked. Unless you speak of other costs? Loss of privacy, attention sinkhole/Productivity loss?
- Spivak 9y agoOr literally any business?
- conanbatt 9y agoConsumers of a product are beneficiaries. The general criticism is for state programs, where the people that get the benefit are few, and those who pay taxes cant fight for the few cents taken away from them.
- bkjelden 9y agoI have been wondering lately if we have become so dependent on certain sectors of the US economy (housing, infrastructure, healthcare, education) that risk aversion is suffocating innovation. No one wants to send their kid to an unproven, experimental university. No city wants to beta test a new style of road building. No patient wants to be the first to try a new treatment. We are so dependent on these things that the cost of failure is astronomical. Because no one is willing to try new methods of doing things, costs never go down. There are marginal improvements, for sure, but no disruptive changes. It feels like a weird manifestation of NIMBYism. We all want innovation, but we want to test it on someone else first.
- Karrot_Kream 9y agoDo you really think France and Japan, two of the countries cited here, are less risk averse?
- Nihilartikel 9y agoThe distinction that I see is that the US is perhaps not individually risk averse, but is systemically accountability averse. There is no end to the inefficiencies that can be introduced by constant ass-covering and compulsive subdivision of responsibility to the point that no one human is accountable for anything of note.
- daveFNbuck 9y agoPeople are so incredibly willing to try unproven experimental universities and medical treatments that people getting scammed over fake ones is actually a fairly large problem. I'm not sure where you got the idea that no one is going to Trump University or University of Phoenix and that no one is trying alternative medicine or pushing right to try bills across the country.
- anubisresources 9y agoPeter Thiel and Tyler Cowen have a lot to say about this subject. The argument boils down to regulatory and cultural pressures have caused innovation to slow down drastically since the 1970s in all areas but ICT. I strongly suggest you read "The Complacent Class" if this is a subject that interests you
- hkarthik 9y agoThe fastest that I've seen infrastructure put up in the US is where there are toll roads being built. I suspect this is because there is a high incentivize to get a toll road up quickly and start generating revenue to pay back the initial investment. Residents generally hate tolls, but its a good motivator for infrastructure to go up quickly. I never understood why similar incentives wouldn't kick in for mass transit projects.
- conductr 9y agoI'm guessing most are publicly funded so the incentive is not seen as an investment needing a return - or, at least the urgency of return is diminished
- ascagnel_ 9y agoAmericans generally have an aversion to public transit for anything beyond a air travel. Just look at the current mess NJ Transit & Amtrak find themselves in with regards to the Hudson River crossing -- some century-old tunnels and an almost-as-old drawbridge that are beyond capacity. Replacements had been funded and ground had been broken, but that money was then diverted for surface roads and highways.
- anubisresources 9y agoI posted this here the other day, I'm not a civil engineer so I'm sure there are things I'm missing but the idea seems to have some merit: https://www.jefftk.com/p/replace-infrastructure-wholesale https://www.jefftk.com/p/replace-infrastructure-wholesale It doesn't address any of the numerous political issues with American infrastructure, but it could be good for repair and maintenance
- stupidcar 9y agoVague talk of inefficiency in construction isn't really very informative. Has anyone ever done a study where they take two very similar projects — building a medium sized office building, for example — in the US and China, and following them both from beginning to end, auditing exactly how much money and time is spent on each stage? It seems like this would provide a useful basis for comparison.
- post_break 9y agoWouldn't they vary wildly due to OSHA and other requirements like permits and bribes?
- deleted 9y ago[deleted]
- WithHighProb 9y agoGiven the real estate bubble in China now, I guess it'll be 100 times faster
- WithHighProb 9y agobtw at 0.1-0.01 cost, because land is state-owned it's possible you could get the bid for the land at a very low price.
- serhei 9y agoIf you did a detailed audit, you could also price adjust for things like land and end up with a comparison that reflects how each project is being managed.
- beat 9y agoThis reflects in health care as well. American health care costs about twice as much as it does in every other first-world nation. Those systems run the gamut from fully socialist to mostly privatized, but they all share a common feature - they provide universal coverage at half the cost of the American system. That says there's something uniquely broken in our model. Infrastructure? Same thing. There's something distinctly American in how slow and expensive it is. These are systemic issues, not some single-cause thing that [liberals|conservatives] can finger-point to a partisan villain.
- fivestar 9y agoBut bear in mind what you just said IS NOT a valid argument for socialized medicine--it is an argument for market reform, or for looking at what is really going on in healthcare (hint: Wall Street).
- epistasis 9y agoWhy do you feel the need to point this out, when he mentions mostly privatized and socialized in the same sentence? You may as well have said that it IS NOT a valid argument for mostly privatized medicine.
- davidw 9y ago> mostly privatized Where's that?
- abalashov 9y agoEverywhere outside the "developed world". By the numbers, the global norm is free-market healthcare, where the patient directly pays the doctor. And yet, even that delivers a cost structure that is infinitely preferable to our circus over here. I personally favour socialised medicine. The point is that whichever extreme you go to, it's going to be better than the morbidly obese, hyperinflated, worst-of-all-worlds catastrophe in the US.
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- aaronarduino 9y agoIt's not that we have forgotten. It's the fact that regulation, time to get approval, and other red tape make the timeline longer. Gone are the days when things just get done.
- sharemywin 9y agoBut, from what the article was pointing out we're comparing place like france and japan which have as many if not more regulations.
- aaronarduino 9y agoIt's not how many regulations there are, it's more about how much time and effort it takes to conform to the regulations.
- sharemywin 9y agoSo, your argument is we enforce are regulations better?
- sigstoat 9y agoi wonder what compliance is actually like. for instance: countries X, and Z could both have the same list of rules on the books, but folks in country X actually comply with the rules even when nobody is looking, whereas folks in country Z just look at the rules and ignore all the ones they think are stupid.
- Decade 9y agoReally shallow analysis. A lot of the US regulations are just really bad. Does France have labor unions who force employers to hire people to stand around not doing anything useful? Is Japan’s environmental quality law so open-ended that it’s hardly ever actually used for the environment? http://www.planningreport.com/2015/12/21/new-ceqa-study-reveals-widespread-abuse-legal-process-non-environmentalists http://www.planningreport.com/2015/12/21/new-ceqa-study-reve... Just recently, I was watching a housing development in San Francisco, and the neighborhood merchants’ association filed a CEQA (California Environmental Quality Act) appeal to the Board of Supervisors claiming the EIR (Environmental Impact Report) was inadequate. Strangely, the Board of Supervisors refused to consider the merits of this claim, but kept delaying the hearing to talk about it. After 6 months, the merchants’ association withdrew their complaint. Was it because the EIR was fine after all? No. It was because the local area’s supervisor, the merchants’ association, and the developer did backroom negotiations until the developer gave enough concessions that the merchants’ association was satisfied. These concessions will inevitably come out as higher prices for housing. https://missionlocal.org/2017/05/deal-approved-to-green-light-folsom-st-development/ https://missionlocal.org/2017/05/deal-approved-to-green-ligh...
- rhino369 9y agoDo these construction costs inefficiencies also appear in construction projects that are privately funded? Or is it just publicly funded projects?
- debacle 9y agoAt least in my city, nearly every construction project, private or no, receives (often unnecessary and/or astroturfed) public scrutiny.
- tmh79 9y agoIt seems to me like the biggest things that have changed are the safety regulations on the construction process itself and the finished product. The golden gate bridge was built in a few years, but with a few worker deaths. Building a new bridge like the golden gate today would likely be illegal, and take ~25 years.
- alistairSH 9y agoThat doesn't explain the difference in time/cost between current-day USA and current-day France or Japan. All three have modern safety and environmental regulations, yet two can complete jobs faster and for less money.
- fivestar 9y agoMaybe you don't understand the real incentives at work? In the US, it is jobs, jobs, jobs. Long, drawn out projects keep hardhats working for years. It's not about outcomes, which is a big part of the problem.
- alistairSH 9y agoPossibly true, but the parent to my comment suggested the problem was safety/environmental regulation, which is unlikely to be the main contributor to the problem.
- TulliusCicero 9y agoSort of. That other developed countries do it cheaper suggests that having sufficient safety/environmental regulation is not the problem, but our particular implementation of such could still be the problem (if it was particularly redundant or cumbersome).
- esfandia 9y agoI can't explain the difference, but I bet that infrastructure costs have gone up drastically there as well.
- rrggrr 9y agoDurability. Its one thing to quickly and cheaply add infrastructure, and I've traveled the world to places where this is accomplished at a dizzying pace. Its another thing altogether to engineer and build projects that can endure over time and in the face of natural and unnatural disaster. Yes, the US is overdue for infrastructure investment. Yes, its costly and unproductive Federal and State entitlement obligations compete for these dollars. But the expense of building infrastructure in the US is justified by the longevity of its engineering and build quality. This is not the case globally.
- jicks 9y agoIt doesn't fit. Railway systems in Japan and France (taken as example in the article) are high quality and last long as well. Yet construction railway is way less expensive there.
- fivestar 9y agoIn Japan, are property rights a big deal? How about corruption? Here in the US, you would get every NIMBY and enviro-whacko all fired up. Then you have the insiders who know where the right of way will likely be and they will buy up the land so they can flip it to .gov at a premium.
- rrggrr 9y agoRail is a special case because land issues and near zero indigenous maglev tech in the US. Think roads, airports, train stations, bridges, dams, etc. And, as importantly, the US doesn't export subsidize infrastructure companies and projects as does France or Japan. The exception is energy infrastructure.
- afuchs 9y agoI'm confused? What do you mean by land use issues? Japan isn't using maglev for commercial high-speed service yet. Japanese high-speed trains have steel wheels that make contact with a steel track, just like regular trains. Their maglev trains are limited to experimental research and development [1], or low-speed urban transit [2] (which was built as a showcase for a World's Fair). France's and Japan's high speed trains are based on the same technology as their lower speed counterparts, including American freight rail. How does a differing level of experience maglev technology cause a difference between different countries' quality of infrastructure, when that technology isn't being used? [1] https://en.wikipedia.org/wiki/L0_Series https://en.wikipedia.org/wiki/L0_Series [2] https://en.wikipedia.org/wiki/Linimo https://en.wikipedia.org/wiki/Linimo
- exmicrosoldier 9y agoToo many value extracting rentier owners and valueless executives skimming off the top of projects done for the common good.
- chadgeidel 9y agoMy brother and father (concrete construction) would probably lay the blame on onerous regulation. They regularly complain about nit-picky engineers with their insistence on (in their words) unreasonable slavish devotion to engineering specifications. I'm not on the jobsite so I don't actually know. I wonder is our construction regulations are much more stringent than other western nations?
- rm_-rf_slash 9y agoCount your blessings. Construction can be much harder in other countries for reasons beyond engineering and safety. Italy, for example, is a real estate developers nightmare. Every rock or patch of dirt has a decent chance of sitting atop an Ancient Greek or Roman ruin, and the process to ensure that construction won't damage any heretofore unknown ruins is agonizingly slow. It boils down to political power and cultural preference. Americans are fine with tearing down almost anything (except designated landmarks) to build something "better" than before.
- fivestar 9y agoWell, we used to be, but not really these days. At least I don't see it much. Look at UAE or Singapore and see what they're up to.
- arethuza 9y agoBut that problem applies to a lot of places in Europe - a lot of projects in the UK need to have teams of archaeologists in place and stuff seems to get built here at a reasonable rate (OK mostly - around Edinburgh we've had one dubious tram project and a successful major bridge and railways being re-opened). The Crossrail project in London had over 100 archaeologists working on it: http://www.crossrail.co.uk/sustainability/archaeology/ http://www.crossrail.co.uk/sustainability/archaeology/ Edit: The Forth Crossing bridge uncovered sites roughly 10,000 years old!
- gozur88 9y agoTo be fair, every so often you find a king.
- Kenji 9y agoThe solution is shrinking the state to the bare minimum and making as many transactions as possible voluntary.
- Frondo 9y agoI wish the Libertarians who post this solution ("shrink the state to the bare minimum") would ever actually show us where it's working in practice, to provide a decent quality of life for people. In China, they're building mad infrastructure--big state. In Europe, they're providing a good quality of life--big state. The "small state" places I can think of, none of them are places people are flocking to for an improved quality of life. Why can't we see how well this idea works out in practice? Why does no one ever say "look at [minimal-state place X] and see how people are happy, thriving, and free"?
- mistermann 9y agoLet's be honest, there are not that many examples to choose from. What I like about China is, it illustrates how effective a mostly benevolent dictatorship is. It is the optimal political system imho, provided it remains benevolent of course, which is no small feat. Provided they don't trip and fall, if China is not the absolute supreme leader of the planet in 25 - 50 years I will be shocked.
- vondur 9y agoI would hardly classify China as a "benevolent" dictatorship.
- rhizome 9y agoYet neither is it suicidal (usually termed something like "murderous"), the other end of the dictator-polarity spectrum.
- ori_b 9y ago> Let's be honest, there are not that many examples to choose from. Yes, I think that's the point. There are decent numbers of places where government has neither the ability or desire to regulate heavily. None of those places seem to have blossomed into oases of free enterprise and infrastructure construction.
- chromaton 9y agoI-85 in Atlanta was repaired in just over 6 weeks. So things can get done quickly if the incentives are right.
- ams6110 9y agoYes incentives. The I-85 repair had huge political pressure to get it done because a major highway was closed, inconveniencing many voters and commercial entities. Most infrastructure projects have incentives to delay. The longer the project, the more time for more people to make more money.
- noonespecial 9y agoI thought about this when I visited the Hoover Dam. The audacity of the thing and sheer impossibility of doing anything remotely like it in today's America makes it seem like a relic from an ancient civilization. It felt like visiting the pyramids in Egypt.
- ghaff 9y agoDams specifically are... complicated. There are a lot of reasons why dams are more likely to be torn down these days than built. Some are necessary for flood control but dams often have very significant negative environmental effects. It's also hard to imagine building the interstate highway system today but, in general, a greater concern about the environmental impact of infrastructure projects isn't really a bad thing.
- bluGill 9y agoThey are not building many interstates, but existing ones are being expanded around cities. They are also upgrading a lot of little two lane country roads to freeways - except for the name they are interstates.
- ghaff 9y agoYes. But by and large those don't involve new right of ways. The interstate highway system involved a huge amount of land taking by eminent domain. The legal challenges today would be immense. In part because the country is just more built up but it's also generally harder for the government to just buy up land because they're the government, to say nothing of environmental etc. challenges.
- TulliusCicero 9y ago> It's also hard to imagine building the interstate highway system today but, in general, a greater concern about the environmental impact of infrastructure projects isn't really a bad thing. Yes, but Japan and Western Europe surely care as much about the environment as the US does, don't they? Plus a lot of the times you have a incredibly amount of money spent on environmental review for things like, a housing complex in the middle of SF being torn down to make way for a taller housing complex. That's not going to impact "the environment" as the term is usually used. It's not dropping new development in a forest or building a dam.
- bischofs 9y agoI recently ran into the MDOT project manager for a rebuild/expansion of a section of I-75. With some googling I found that she was working on the project since 2001 - construction started in 2016 and is not scheduled to be completed until 2030. So she will be working on the project for 30 years; her entire career... something is pretty broken about the government structures around these projects.
- doodlebugging 9y agoI know that this can happen because my wife started her federal government career in one agency working with someone who retired from the agency shortly after she started. This person had spent their entire career at DOT managing projects along the interstate between Houston and Galveston. The expansion/maintenance over that time period guaranteed that nothing was ever truly completed. Crews/contractors simply shifted down the highway to the next place scheduled for repairs or lane additions.
- barretts 9y agoOne important factor unmentioned so far: Federalism. The US has very strong state and municipal governments compared to France and Japan. In many cases, any one of the three can veto a project. A new commuter rail line under the Hudson River connecting NYC and NJ was begun in 2009 and NJ Gov Chris Christie killed it in 2010 (citing cost overruns), after $600m had already been spent.
- cletus 9y agoThe US hasn't forgotten. Nor is this unique to the US. It seems to be a widespread issue in the developed world. The problem is that labour is simply too expensive now. And, to a lesser, extent, so is real estate. In the 2000s Australia experienced an unprecedented resources boom fuelled by China's growth. This especially impacted Western Australia and Queensland. WA in particular is rich in iron ore, oil and gas and other resources. In Perth in 2000 you could buy a 70s 3 bedroom house within a few miles of the city center for <A$100k. By 2005 it was $350k. Capital projects for the resources industries were in the works amounting to over A$100B. All of these have a huge construction component that soaked up the construction supply. In the 90s you could build a house in as as little as 3 months. From the early to mid 2000s that time frame is now closer to a year and costs 5 times as much. So homes became much more expensive. Of course building commercial and industrial property also got more expensive. Property costs are a significant input cost into any business that operates there. Increased residential costs soak up disposable income and lead to wages growth. Increased wage costs makes things more expensive and the cycle continues. So Perth transformed in the 1990s from a city that was very affordable with a good standard of living to one of the haves and have nots. The haves are those in the construction and resources industries. They were making crazy money. Everyone else was pretty much a loser. Arguably this is dutch disease [1]. So now the city wants to do things like build train lines. Well labour is stupidly expensive because the cost of living is so high and buying up real estate to put said train line on is also super expensive. A lot of people don't seem to feel this because they're incumbents (ie they bought their houses 15+ years ago). Others have immigrated so have foreign money bypassing the local economy. So look at the Second Avenue Subway as one example. $17B for a few miles of tunnels? Really? Well that's the cost of labour in the US and real estate in Manhattan. Since it's underground I don't imagine a large percentage of the total cost is real estate either. So it seems like when a lot of this infrastructure was built, the relative cost of labour was much lower. The standard of living was also much lower, apart from the 1950s and 1960s, which can be viewed as a transitional anomaly more than a normal equilibrium. [1] https://en.wikipedia.org/wiki/Dutch_disease https://en.wikipedia.org/wiki/Dutch_disease
- blawson 9y agoThe article specifically claims labour costs aren't that much more than in other locations, Japan in particular. Certainly not enough to explain the huge differences in project budgets.
- bogomipz 9y agoI don't know if "forgotten" as used in the title is the correct word so much as just "out of practice." Look at this list of infrastructure projects in China in the last decade or so: http://www.businessinsider.com/giant-chinese-infrastructure-projects-that-are-reshaping-the-world-2016-6/ http://www.businessinsider.com/giant-chinese-infrastructure-... It's hard not to be impressed by that list. And China is undertaking these scale projects abroad as well from Latin America to Africa. It's should be no surprise that you get really good at something the more you do it. What was the last project that the US Federal Government undertook on a similar scale as one of these? "The Big Dig[1]"? Notable for being the most expensive highway project in US history and yet served only Boston? The US seems to spend interminable months squabbling over whether or not its un-American to use imported steel to replace parts of its crumbling infrastructure(see Bay Bridge, Tapan Zee projects etc.) while the Chinese seem to spend that time actually executing the project. [1] https://en.wikipedia.org/wiki/Big_Dig https://en.wikipedia.org/wiki/Big_Dig
- LoSboccacc 9y agochina is still industrializing and will be for a while yet, of course they get great roi from their infrastructure projects
- bogomipz 9y agoEven a country that has completed their industrialization such as the US stands to gain massive ROI from infrastructure projects. Driving through the Holland Tunnel into or out of NYC during rush hour its not hard to quantify the cost to the economy in terms of lost productivity.
- bluGill 9y agoThe US is doing a lot of building. Not as much as China, but more than enough to be good at it.
- tonyedgecombe 9y agoIt's almost like a democracy slows development, if you compare China to India it looks like that.
- vmarsy 9y ago> Yet France’s trains cost much less. Decades of expertise might be a reason here, France has the longest amount of (high speed rail miles / country area), and the non high-speed network is also huge. It's also possible that the monopoly of having only one, state-owned, railroad company (SNCF) let that company negotiate/choose better prices much more aggressively than if there was many companies. I don't think it was stupid at the time to have such a state-owned monopoly for building this key infrastructure. Also I'd think that with that big of a network, some things start to become less costly because of economies of scale. Last April SNCF bought 30 trains to Alstom for 250m€, with the current US infrastructure I doubt the US needs that many trains. If one day like France they have 450 high speed trains, maybe it'll cost them less to have more built. Japan and France are dense countries, the area of France is roughly equal to the area of Texas, it's hard to imagine 450 high speed trains there, where they're struggling to even get one high speed rail line between Houston and Dallas.
- superfx 9y agoFunny thing is that the population of Texas is a little less than half that of France's (27 mil vs 66 mil), so the density differential isn't _that_ large, yet your point about the implausibility of 450 trains in Texas stands.
- deleted 9y ago[deleted]
- bluGill 9y agoThe US non high speed rail network is also huge. However it handles freight not people so few people realize just how great the rail system is here. (our passenger rail is terrible)
- kodablah 9y agoYet Dallas is still home to the longest light rail system in the world. The trains are not an issue, it's how decentralized the people are. The value is simply not there to justify the project in most people's eyes (and won't benefit most people).
- imgabe 9y agoI don't know the answers, but as someone who works in the industry (on the design side). I think a big unmentioned factor is probably liability and the prospect of litigation. If you look at old blueprints for projects in the past, they are a LOT less detailed. They had to be, because it was physically more difficult to produce them since they had to be drawn by hand. A lot was left to the contractor to figure out in the field. Now, drawings are more detailed and contractors are incredibly reluctant to make even the smallest decisions on their own. They don't want to assume the liability and risk getting sued if they do something wrong, so they push that off on the engineers and architects. This means every time there's a question, it has to be submitted through a formal process, tracked, answered, documented. And if the change has any cost impacts, the contractor tacks on a hefty premium because they know they can get away with it (and they probably underbid in the first place to win the job). Delays pile up, every clarification becomes an expensive change order, construction workers twiddle their thumbs while designers get around to addressing questions and this all costs money and time.
- Asooka 9y agoYeah but the bureaucracy makes a lot of money for itself and grows ever larger. Basically you want to treat the people executing the plan as smart adaptable agents rather than dumb robots.
- akshatpradhan 9y ago>This means every time there's a question, it has to be submitted through a formal process, tracked, answered, documented. I don't know why you think proper change control is a bad thing. In both software and systems engineering you submit change requests that are tracked, reviewed, assessed for risk, approved and documented. You do this to create an audit trail to identify "how we got here". Any concerns? It's documented in the ticket. Now when it comes to civil engineering projects, where bridges can collapse, you should WANT that kind of rigorous change control of tracking, approving, and documenting. Yes, documenting change control requires more work, but it also saves lives and creates an audit trail in case of a grave error.
- aeturnum 9y ago
- hx87 9y agoI suspect that part of the problem is that expertise doesn't reside in monolithic corporations and governments anymore, but in specialist consultant companies that have relatively high fixed costs and thus must charge more to make a profit. In addition I suspect that there are a lot of lookalike consultant companies that charge a lot of money in exchange for kickbacks but don't provide any value.
- saosebastiao 9y agoI'm pretty sure we're so far invested in being crappy at government that we can't feasibly turn back without inflicting a lot of pain. Admittedly anecdotal, but after having lived near two major DOE national laboratories (where >40% of my neighbors worked at the lab), I wouldn't be surprised if 60-80% of the workers at these labs could be eliminated under a combination of audit-based reform, regulatory reform, and management changes. Without any change in output or results. I've listened to descriptions of what people do at these labs, and it blows me away how low productivity they are compared to the private sector. I've known people who work entire workweeks that could be consolidated into 3-5 hours of work, and they're willing to admit it. In fact, those that would try to change from within have told me they would feel vulnerable to retaliation if they went through with it. And that's before we get into the shitshow that is federal contract work. We've turned federal contract work into a goldmine for whoever has enough lawyers to win a bid. And we don't even know how many people are employed doing that contract work [0]! At this point, meaningful reform means taking 10's of millions of people and forcing productivity on them to the point where most of them are unnecessary. We could probably double the unemployment rate with the right reforms. That's why it won't happen. [0] http://www.govexec.com/contracting/2015/03/even-cbo-stumped-size-contractor-workforce/107436/ http://www.govexec.com/contracting/2015/03/even-cbo-stumped-...
- zanny 9y agoThis is a symptom of David Graeber's phrase of "bullshit jobs". Capitalism and the government work together to create unnecessary work (often through regulation and oversight and middle management stuffing) to maintain "safe" employment levels to keep the economic system working. If we were only hiring people to do productive things, and considering we saw a 75% productivity increase between 1975 and 2005 with all the bullshit jobs, while domain-specific productivity figures hit the 300% or higher ranges, you could maintain the same GDP at 40%+ unemployment. The only problem being the country would collapse with that much unemployment, so the private and public sectors respond by fabricating things to do that don't actually create goods or services.
- HillaryBriss 9y agoIsn't this simply "fiscal stimulus?" I mean, the federal government is supposed to create jobs by spending money. Doesn't matter what they spend the money on. The only acceptable way to measure economic output is in terms of the dollar value of all the goods and services bought and sold. It could consist of marijuana farming, muscle car paint jobs, bass fishing lures, watery beer, custom gun barrels, cow-brain sandwiches and East European strippers. Doesn't matter. We can't go around imposing our value-based notions of "bullshit jobs" on top of that measurable dollar amount. That wouldn't be economics.
- tannerc 9y agoRelated to what we might label "modern" infrastructure, I just got back from a trip visiting the outskirts of Illinois. The towns there are small, but full of people hungry for opportunities and good work. Yet everywhere you go there is no work to be done. Businesses—even big box stores like Walmart or Target—are closed down. Homes lay vacant despite their reasonably cheap (at least for someone living in Silicon Valley) $20,000 price tag. Even churches in the area have to close their doors but leave their steeples standing, unable to draw in an audience or—and most importantly—any money to maintain things. This isn't Detroit I'm talking about, it's a fairly typical suburb of a larger metropolitan area in the midwest. The answer for many of these people has largely and loudly been: "Bring back jobs from overseas! Stop outsourcing work to China!" But of course that's not a valid answer, since the problem is that the jobs these towns once knew now belong to machines which can work tens of times harder and longer at a fraction of the cost of their former human counterparts. Yes, some of the work has gone overseas, but much of it has just become "modernized" by technology. And here's the thing: the infrastructure for things as simple as Internet access in these parts of the US just isn't there. So nobody goes to school to learn programming or design or how to be a modern entrepreneur because they (the individuals and schools) just don't have any connection to those parts of the landscape. And when they do, their model is wildly out of date. One of the Universities I visited and, later, a high school had each just opened a computer lab for students in which the goal wasn't to help students learn programming, or design, or anything like that, but merely how to type. This of course added on top of the decrepit roads, buildings, etc. The state is wildly out of money because it can't put people to work, and the people can't work because the infrastructure just isn't there. It's depressing to see, really. I want to know how we can improve this, and what someone living on the other side of the country might do to help.
- amyjess 9y agoI have to wonder how much of this is the result of population migrating from the Midwest to the Sun Belt. It used to be that the Midwest exemplified "typical America". Now, that role belongs more to the Southwest, Texas, the New South, etc. Dallas and Phoenix probably represent the average, everyday American more than Chicago and Detroit do nowadays.
- 9y ago
- mcrad 9y agoAs the value of a law degree has ran way ahead of more hands-on professions, this is the result. Constitutional amendment: JD's banned from public office
- JustSomeNobody 9y agoBecause the developers have learned how to play politics for more money?
- esmi 9y agoBy U.S. I think they mean the Federal Government. It's possible to build very large projects, presumably to code and under proper safety standards, in America if one desires. Here are two examples which come immediately to my mind. I'm sure they are many more examples. https://www.tesla.com/gigafactory https://www.tesla.com/gigafactory https://en.wikipedia.org/wiki/Apple_Park https://en.wikipedia.org/wiki/Apple_Park I think the Federal Government looks at infrastructure as jobs programs and this is why they are drawn out. The job is the end not the thing they're actually building.
- Decade 9y agoNot just the federal government. State and local governments are also insanely slow and expensive. For example: Mayor Ed Lee being fast and decisive. Building teacher housing during such a state of emergency that SFUSD has trouble filling its open teaching positions. About $300,000 of city money budgeted per unit, and it won’t be open until President Trump’s successor is halfway through his/her first term, if we’re lucky. http://www.sfchronicle.com/news/article/Mayor-comes-up-with-40-million-for-S-F-s-11139143.php http://www.sfchronicle.com/news/article/Mayor-comes-up-with-...
- jk2323 9y agoAn African government official visits Europe. There, a European government official invites him to his luxury home. The African is shocked. He asks "How can you afford such a house if you a just a government official?" The European says: "Look out of the window. can you see the bridge?" The African: "Yes" The European: "See, the government paid for two train tracks but the bridge has only one." The African says: "I understand". 2 years later the European official visits the African in Africa. He invites him into his house and his house is a luxury palace. Now the European is shocked. He asks "How can you afford such a palace? Recently you were so impressed with house and now you live in a palace?" The African says: "Look out of the window. can you see the bridge our taxpayers paid for?" The European: "No."
- defined 9y agoLmao. To one who was born and raised in Africa, this is both funny and, too often, lamentably accurate.
- int_19h 9y agoI've seen this joke before, but it wasn't about Africa. In Russia, a similar one was told in the 90s, except it went like so: Yeltsin visits US on an official trip; Clinton is hosting. The banquet is lavish, and after gorging himself on delicacies, Yeltsin asks Clinton where the money for all that came from. Clinton gestures him to the window, and points at river, with bridge in the distance. "See that bridge?" "Yep." "We budgeted 100 million dollars for it, but our innovative construction companies managed to complete it for 50 million. The rest of it went into our reception fund". Next year, Clinton visits Russia. The banquet is even more lavish. Clinton asks Yeltsin the same question. They walk to the window, and Yeltsin gestures at the river. "See that bridge?" "Um... no?..." "But we budgeted 100 million dollars for it. So..." Which, I guess, also tells you a lot both about how US was perceived in Russia back then (I'm sure the notion that American contractors could do the work under budget is utterly unbelievable to most Americans; yet its believability is at the heart of this joke).
- mschuster91 9y ago> The African says: "Look out of the window. can you see the bridge our taxpayers paid for?" s/our/your and you have an explanation why many projects funded by the richer Western governments in any development country (no matter if Africa, Asia or Eastern Europe) tend to fail. Endemic corruption (and preventing it) is not very high on the radar of the funders, all the politicians are looking for when funding development projects is "we spent X US$/y % GDP in development aid", but unlike private charities which have to prove that they're not wasting money, there's no incentive in government-supplied monetary aid to check for efficiency. Same goes for food or clothing aid - Europe just dumps excess (food) or waste (2nd-hand clothing, where the "cream" goes to Eastern Europe and the leftovers to Africa) onto developing countries without taking care to not destroy local industries. As a result, refugees come in, and most often those politicians allowing the ruinous exports in the first place are the first ones to complain about the refugees their very own actions caused. It's sick.
- BurningFrog 9y agoThe Slate Star Codex essays on "cost disease" are as usual a must read: http://slatestarcodex.com/2017/02/09/considerations-on-cost-disease/ http://slatestarcodex.com/2017/02/09/considerations-on-cost-... http://slatestarcodex.com/2017/02/17/highlights-from-the-comments-on-cost-disease/ http://slatestarcodex.com/2017/02/17/highlights-from-the-com...
- rjohnk 9y agoAfter the collapse of the 35W bridge, the new bridge the took its place was built ahead of schedule and on budget. As with many things in history, disaster seems to hone our ability to overcome obstacles and get things done. https://en.wikipedia.org/wiki/I-35W_Saint_Anthony_Falls_Bridge https://en.wikipedia.org/wiki/I-35W_Saint_Anthony_Falls_Brid...
- defined 9y ago> There is reason to suspect that high U.S. costs are part of a deeper problem. Maybe this is mere cynicism, but if the workers and materials don't cost that much more than in France, my immediate reaction is "excessive profiteering", or, to put it another way, "because we can, and nobody is stopping us". The same applies to our unreasonably high education costs, and healthcare (although that's much more complex an issue, but at its root, it is too many fingers in the pie).
- truxus 9y agoAm also a design engineer, I specialize in water and wastewater works. My clients are all municipalities, with tight budget and politics are a factor. Engineering productivity has climbed thanks to computers, but construction productivity continues to decline. In my experience on small jobs this has a lot to do with safety and regulations. It takes a team of 2-3 to enter confined spaces (manholes) for momentary inspections or maintenance, it takes extra workers to set up traffic zones to ensure travellers are less of a danger to the workers. Time is taken to ensure archeological, agricultural, and culturally sensitive areas are not disturbed. Minority and women owned businesses are given contractual preference, whether they are most qualified or not. It takes a special (read: expensive) team several weeks to document trivial wetland areas (most people call them roadside ditches), and another person weeks of labor to explain how impacts will be minimized. The government sets standard labor rates for construction labor. But these are things we as a society have deemed important. Its not acceptable for lives to be lost. It's not acceptable for construction workers to accept low wages. It's not acceptable to recklessly degrade our environmental resources, and it's important to have diversity in this industry. I don't know if it's true in other countries, but it seems the USA vascilates between priorities depending on the public administration. I am young so my experience is short. Bush saw a real estate bubble, Obama saw an insurance bubble, Trump et al aim for a construction boom. I would add that in New York my home state, a Democrat state, there is a large infrastructure program starting, so it's not just Republicans.
- jaclaz 9y agoI have no experience building infrastructures in the US, but I have some in Europe, working in construction companies. I will give you some (sparse, 1 every 10 years) datapoints: 1983 - 2 or 3 copies of any drawing or letter/calculation 1993 - 6 to 8 copies of any drawing or letter/calculation 2003 - 12 to 20 copies of any drawing or letter/calculation 2013 - 16 to 24 copies of any drawing or letter/calculation And of course this increase of copies is due to the increase in permissions/authorizations/approvals/checks needed and due to "stricter" (actually only more complex) construction codes and changed calculation methods I would say that the number of documents (before making the copies) has increased by 1.5x every ten years, i.e. something that was built on 1,000 drawings/documents in 1983 was built in 2013 on the basis of more than 3,000. The number of people involved (not labour, but management, engineers, surveyors, technicians, etc.) need also to be multiplied by a factor of 3 2013 vs. 1983. The actual production (thanks to a few computer-related innovations and the availability of better, bigger machines) has increased, but all in all you do the same amount of work with less people (labour) and lots of people looking at what the workers are doing. This is a classic meme, but is not that much far from reality: https://web.archive.org/web/20131005125257/http://ajotube.it/files/2011/02/reorganization_chart.jpg https://web.archive.org/web/20131005125257/http://ajotube.it...
- TetOn 9y agoThis article from 2011 (http://washingtonmonthly.com/magazine/marchapril-2011/more-bureaucrats-please/ http://washingtonmonthly.com/magazine/marchapril-2011/more-b...) makes a compelling case that, after decades of cutting government jobs and creeping privatization, we simply don't have enough bureaucrats to organize and run large, complex projects anymore. These other countries having success with infra projects still do. Thus the issue.
- skrap 9y agoI've been following and advocating for the Green Line Extension, a major transit expansion in the Boston area. I've been working on this for about 7 years now, through three different project teams, and I can say for certain that lack of effective management is a HUGE issue with the repeated failure of this project. (This is the third reboot of this project... or maybe fourth. I've lost count.) Not only does the local transit agency have _nobody_ who can manage the project, but the government doesn't even have the capability to assess contractors who might do that job. So they are totally at the mercy of commercial firms, who get paid whether they deliver or not. The latest move is to hire a project manager for about $400k/yr (on a contract basis, naturally) to try to "save" the project, which has already spent $1 billion, yet has not put a shovel in the ground. (Ok they did fix up one bridge, woo hoo.) Unfortunately, this PM is only one guy, and he's being assisted mostly by (you guessed it) more contractors. Even more comically, the contractors who are assisting him are the exact same ones who blew the first billion dollars. Needless to say I don't have a lot of confidence that the incentives are aligned with me ever riding on this line.
- Mz 9y agoThey are comparing it to health care, which suffers from a serious excess of bureaucracy. So I will suggest that too much bureaucratic red tape is likely a factor.
- babesh 9y agoIt's a symptom of captured large government in the US. The smaller 25k person town I live in doesn't nearly have the same issues. We've managed to put up new school buildings the last couple of years with not too much fuss and on budget. On the other hand, the town is relatively well off and there is seemingly good community participation.
- OliverJones 9y agoI hate to be snarky, but there's another factor: laziness. When there's a replacement bridge under construction around here, business at the local dunkin donuts goes up ALL DAY, not just at lunch and shift change. Everybody's there: laborers, supervisors, delivery drivers, managers, engineers, owners' reps from the state DOT and the towns involved. And, in Massachusetts we have a peculiar extra cost: The police force has a monopoly on doing the traffic safety work that flag people do everywhere else. They have the right to arrest people who work in or near roads if they start working without a paid police detail on the site, or keep working after the police detail leaves. Slows work down; gives people a reason to wait around after arriving on the job.
- Ihateyouallhn 9y agoStop cunting it up
- supernumerary 9y agoIn Detroit, lawmakers recently passed legislation making it hard to sue the city for crumbling sidewalks. http://www.freep.com/story/news/local/michigan/2017/01/05/sidewalk-slip-fall-accident-lawsuit/96228496/ http://www.freep.com/story/news/local/michigan/2017/01/05/si...
- 23443463453 9y agoAmerica's elite have been gutting our society under a guise of building a "service economy" for decades now in a long line and history of the elite exploiting the systems they have a strange hold on. Silicon Valley and the tech industry have their role to play in it too.
- hawaiianed 9y agoThere is some poor analysis in the article with regards to Davis Bacon Act, they approached it and then missed what it was telling them. Here in Hawaii, Laborer Prevailing Wage is $50+ an hour, toss on our mandatory insurances worker's comp and taxes and it costs almost $80 an hour to pay that worker before profit and other overhead. Laborer rates vary by locality, but no construction worker who gets more than 3-months of Davis Bacon pay is averaging $35,000 a year it's going to be closer to $50,000. Whenever we do any State, or Federal work there is a huge stack of submissions that have to be made, I kill trees like it was my job, shoveling paperwork out the door for these projects.
- kazinator 9y agoWhy all the guesswork about why it costs so much? That sort of thing should be readily explained by accounting: follow the money. Public infrastructure should be financially transparent.
- hawaiianed 9y agoIt is largely projects over $10,000 go out for public bidding, generally with sealed bids. For most State or Federal level stuff you can see who the bidders were, and what bid won the contract. Municipal or County level projects probably have so much variability that it's hard to make any definitive statement.
- krakensden 9y agoIt's worth noting the article was written in response to this lament https://www.vox.com/policy-and-politics/2017/5/24/15681560/gao-report-transit-construction-costs https://www.vox.com/policy-and-politics/2017/5/24/15681560/g... about cancelling a federal report on the topic.
- cmurf 9y agoThat's because income taxes on the wealthy are way too low, which incentivizes stuffing income into real estate, stocks, and bonds. Earn a million dollars worth of either earned or unearned income, and you pay either (simplistically) 39.6% on earned and 23.6% on unearned income. That's too f'n goddamn cheap. It encourages peopel to pay that tax and put it into one of the above, rather than take the risk by starting or growing a business and taking a tax deduction for business expenses. When the silent generation was in charge of things, income tax was never less than 75% for the top tax bracket, for over 40 years. And during that time there was massive private and public infrastructure being built, and we didn't have a $20 trillion national debt.
- macspoofing 9y agoThis article was frustrating to read because it is clear the author did not do one iota of research. He identified a problem with American construction sector being inefficient or not-cost effective and did nothing to even attempt to answer why - yet still managed to stretch that one thought into a 1000 word essay.
- myrandomcomment 9y agoSo I worked for the family construction firm for a few years. The amount of ass covering, paperwork and complexity to what should be a simple thing was amazing. The amount of litigation involved when anything was not as expected was amazing vs. just trying to sort it between the those involved. My father build a $M business on just doing change orders & claims. There is your problem.
- edraferi 9y ago> U.S. costs are high due to general inefficiency -- inefficient project management, an inefficient government contracting process, and inefficient regulation. It suggests that construction, like health care or asset management or education, is an area where Americans have simply ponied up more and more cash over the years while ignoring the fact that they were getting less and less for their money. To fix the problems choking U.S. construction, reformers are going to have to go through the system and rip out the inefficiencies root and branch. That's a tall order. It'd be nice to see the article suggest a way to accomplish that.
- mrjaeger 9y agoIs there any way to do a bottoms up analysis of infrastructure projects like this and see where the differences come from? I imagine the costs on projects like these are pretty finely broken down, although I'm not sure how one would go about actually getting the numbers to analyze.
- mnm1 9y agoIs inefficiency inefficiency when it's done on purpose? That's what the article misses. The salaries of workers might not be higher than in other countries, but I bet what we pay contractors vs. what they produce is beyond astronomical. It certainly is when government contracts out software. With modern computing, I don't see why we don't keep track of costs down to the penny. A new hammer is bought to continue construction? The receipt is scanned and everything is tracked. You don't scan it, you don't get reimbursed. All actual costs are known and the profit margin can be calculated from there. It might not help that much until more data is collected and future projects can be estimated better using that data, but it sure as hell beats the current model of guessing the lowest estimate to get the contract, getting the contract, and then spending 10-1000x the estimate.
- hdhdjjdjd7773 9y agoWe haven't forgot fuck all. The system just doesn't give a fuck. The money to build bridges and roads is sitting in off shore accounts. Our efforts are being expropriated and utilized for financial grift.
- primeblue 9y agoToo much compliance and suing by lawyers/everyone.
- howard941 9y agoIs excessive profit taking eating up the productivity?
- hawaiianed 9y agoNot here labor is almost always our largest cost by far and away. Labor costs are typically 4 or more multiples of profit for most of our work.
- howard941 9y agoIt labor's like 80% of marginal costs 1/4 of it would be tremendous profit margins matched by exceptions like google and pharma. You can see why I'm probing. Can you disclose the typical industry margin? Are your costs Hawaii costs as the username suggests?
- hawaiianed 9y agoYes, Honolulu County. We are typically lucky to make 10 to 15% profit on Prevailing Wage Work, (Federal or State). We do occasionally but it's generally luck coupled with good management and having the ideal crew on the job. https://labor.hawaii.gov/rs/files/2012/12/WRS489.pdf https://labor.hawaii.gov/rs/files/2012/12/WRS489.pdf Prevailing Wage Schedule for Hawaii for Public Works. New York localities are even higher. We do laborer classification work, with some small percentage of "Operators". The skilled trades are even higher. The next bump for Laborer 1 (what we pay the workers when they are performing asbestos removal) occurs in September 2017. At that point they will be making $55.66 an hour. We pay the entire Base wage and Fringe to the workers, as opposed to union shops.
- esfandia 9y agoI wouldn't be surprised if infrastructure costs and delays were going up everywhere though, including France. Would be nice to have actual data. I think it comes down to new non-functional requirements: safety, environmental concerns, accessibility, liability protection, etc. With these requirements, Paris or London or New York would have never had a subway system in the late 1800's or early 1900's. By now though, all these systems have been maintained and modified to comply to the new non-functional requirements over time. So if you added the accumulated cost of running a subway system today, while adding all the maintenance costs over time, it might be the case that the cost of building the same thing from scratch would be cheaper, but unfortunately without the benefit of having passengers enjoy it (and pay for it) for over 100 years (thus partially subsidizing the maintenance costs). So you could even consider something as rigid as a subway system built in an "agile" way, with a quick and literally dirty MVP out of the way early, and additional non-functional requirements added over the course of decades. It's just that those requirements weren't known or wanted initially. Now would it be ok to do the same now? Have a subway system in a city that needs it, but without bathrooms in stations, with no pollution requirements initially, not accessible to the disabled, (name your other requirements not necessary for a MVP), but with the benefit that at least it exists now, it can be subsidized by passengers that are willing to use it, so that over time those other requirements are met. Better have them later than never.
- tomohawk 9y agoIn my state, a contractor was paid to build a major highway using concrete pavement. If done properly, such a road should last 40 years or more, and without the thumpity, thumpity sound you get when the concrete is not put down properly. The contractor was not experienced and totally muffed the job. Rather than penalizing the contractor, they paid the contracter to build the road again, plopping asphalt on top of the concrete after grinding the concrete and redoing the joints that they screwed up. The asphalt hasn't lasted that long, so it will need to be redone again soon. So, the contractor was inept, but so was the government overseer.