10 ms·
The construction labor rate difference between the US and Europe is surprising, especially given the stronger unionization rules in Europe. "Although the mater
by Ottolay 6y ago
The construction labor rate difference between the US and Europe is surprising, especially given the stronger unionization rules in Europe.
"Although the material and equipment costs are similar (within 10%) for projects in the United States and in Europe, labor costs are substantially higher in the United States as outlined above. For example, in California the average billing labor rates for qualified tunnel workers is about $70/hr and the average New York labor rate of qualified tunnel workers is at over $100/hr, whereas in Germany (one of the high labor rates countries in Europe) the comparable labor rate is about $30/hr."
- echelon 6y agoIs $70/hr fair market value, or are the contracts negotiated via corruption and cronyism?
- yawnr 6y agoWhat do you think
- beastman82 6y agoObviously the latter
- bryanrasmussen 6y agowhy would $70 per hour not be fair for working underground boring a tunnel? What does a software developer make in California? on edit: added in California.
- lacker 6y agoThe question is whether it's fair market value. So if there were competent people willing to do the work for $60 an hour, then $70 would no longer be fair market value.
- peterwoerner 6y agoThe laborers don't make $70 an hour, that's what the project bills their rate as. They make closer to $20, the difference accounts for management salaries, times when the buisness has to pay the employees when they don't have work but don't want to lay off (because they are expecting work) and benefits (sick time, pto, parental leave, training etc.)
- deleted 6y ago[deleted]
- bpodgursky 6y agoThis is simply not true. See plenty of other comments in this thread talking about actual rate cards.
- peterwoerner 6y agoIt is true for me. My employer charges the government $142/hr for my time and pays me $43
- xienze 6y ago> What does a software developer make in California? Yeah, not the best example to go with. If the numbers on HN are at all accurate, it's not uncommon for a FAANG employee to make more than a DOCTOR in North Carolina.
- _paulc 6y agoThe more surprising point was the disparity in staffing levels which multiplies the cost differences: “For example, in New York, the number of workers at the face of the tunnel can be up to four times the number of workers required in Germany or Austria for similar projects.”
- mjevans 6y agoThe article then also highlights the difference in overtime pay of 2-3x (for the rate) in the US and 'as time' compensation in Europe. I appreciate 2-3x overtime as a means of encouraging fully filling out the workforce at single rate. Overtime should be for true need, not a factored in norm.
- thrav 6y agoMore people get well paying jobs, fewer people are overworked, and we pay less overtime? Sounds like killing three birds with one stone. Inefficiencies like this should be the enemy of both political parties. They’re why Republicans complain about Government inefficiency and waste, and they’re holding progressives back from accomplishing everything they’d like the government to do. This feels like it’s basically a matter of labor NIMBYs enriching themselves at the general public’s expense.
- JackFr 6y agoIt's almost as if it's in the union's benefit to artificially restrict supply ...
- JackFr 6y agoI expected the downvotes of course, but there's no error in the logic. The role of the union is to advance the interests of it's members. In this case, if the city or transit authority was foolish enough to make a contract so easily gamed, that's on them. Although to the extent that labor unions finance local political campaigns, one wonders if it isn't perverse incentives all the way down...
- ttul 6y agoSpeaking without evidence from the frozen wastelands of Canada, it seems that US trade unions are every bit as powerful - if not more so - in specific areas of the economy. But, oddly, worker pay and protections are weaker on average. Could this strange state of affairs be the result of a political system that is highly polarized and less fundamentally democratic than the Canadian and European system?
- tathougies 6y ago> Could this strange state of affairs be the result of a political system that is highly polarized and less fundamentally democratic than the Canadian and European system? Countries that regulate speech via law are more democratic than America? Yeah... no thanks.
- phaemon 6y agoThat isn't what democratic means. It has nothing to do with which laws are passed, it's about how they're passed.
- tathougies 6y agoYes which is why the United States is not a democracy. There cannot be a law in the United States that suppresses or compels speech no matter how many people want it. The us is a country of freedoms not mob rule.
- deanCommie 6y agoThere is more to democracy and freedom than one (or two if you choose to include guns) sets of freedom. Practically speaking, there is no differences in the freedom Canadian and European citizens have regarding expression compared to Americans even though EFFECTIVELY certain types of speech are restricted (e.g. holocaust denial) That is because the list of restricted speech is incredibly miniscule, and there are strong protections in place otherwise that prevent a "slippery slope" situation from occurring. ("First you ban me from freely speaking about the holocaust not happening, next you ban me from criticizing the president!") Practically, non-US democracies have demonstrated a stronger commitment freedom of assembly and freedom of the press than the US has over the last 4 years. The only difference is that in the US these protections are guaranteed by an effectively "sacred document" that supercedes all laws (The constitution) But it is more and more clear that that is a bug not a feature of the system, and is causing legitimate harm as your supreme court is getting stacked with "textualist originalists" who think that the wisdom of slave-owning cotton farmers applies unquestionably to 21st century technology and societal concerns. And this is before we even get into the question of what it means for something to be "democratic", which is to say there is a "Democratic electoral process", which we're about to find out just how much the US process has been degraded as seemingly HUNDREDS OF THOUSANDS of people's votes will either be not counted, or will be denied the opportunity to vote. What is happening in the US would be impossible in any other Western Democracy.
- xav0989 6y agoI believe that is probably has something to do with what the state provides vs what the labor has to get for themselves. Cost of living is also expected to affect the rates that are charged.
- an_opabinia 6y agoIf we had an education system like in Germany that tracks kids into $30/hr trade jobs, sure. You could reframe it as, “every German tunneler is paying a $40/hr non tax compulsory payment to someone’s kids in Germany’s ownership class.”
- SQueeeeeL 6y agoAren't subways generally public goods?
- chrisseaton 6y agoWhere on earth do you find someone who's qualified (and prepared to take the risk!) of constructing a tunnel that people to go in... for $30/hr? Surely a professional like that can get a better job anywhere else?
- mtgx 6y agoHow could the rest of the world have possibly managed so far?
- paganel 6y agoThere's lots of downwards pressure on construction wages in Europe coming from Eastern European workers.
- chrisseaton 6y agoAre there really many qualified tunneling engineers coming in from Eastern Europe? If there are then good for them, but I still don't get why qualified people would accept so little. Surely private engineering works pays much more than that.
- bleepblorp 6y agoGood grief. Parts of Eastern Europe have had an industrial base since the 1800s. Indeed, the Czechs have been making cars since 1905. Of course Eastern Europe trains qualified construction workers.
- chrisseaton 6y agoBut none of these countries are signatories to the Washington Accord? How are they getting accredited to work in the US or UK?
- Gwypaas 6y agoHaven't even heard of the Washington accord, seems very US centric. All of EU except Ireland is missing.
- marketingPro 6y agoThere is some European fantasy that exists in the United States. Anyone who travels to Europe is shocked at home, food, and car sizes. Sure there is beauty and history, but the standard of living seems significantly worse off. There may be something to be said about safety nets, but it sure was a wakeup call for me. Edit- don't get hung up on the sizes comment, it's merely an expression of wealth differences.
- lotsofpulp 6y agoYes, depends what you value more. Ford Expeditions and Chevrolet Suburbans and F150s or not worrying about your family’s healthcare.
- closeparen 6y agoI’d wager that the average HN reader already doesn’t worry much about healthcare; health insurance at high end tech employers tends to be pretty good. Of course many people in tech want universal healthcare for the benefit of others, but it’s not a compelling argument to e.g. personally move to Europe.
- lotsofpulp 6y agoCan modify it to this: Yes, depends what you value more. Ford Expeditions and Chevrolet Suburbans and F150s or not worrying about your fellow citizens’ healthcare.
- claydavisss 6y agoThe average HN reader has company-provided healthcare that is substantially superior to Canada, UK etc etc. There is no argument that it sucks to not have health insurance in the USA. For those that have excellent insurance, the healthcare infrastructure is the best in the world. Go visit a One Medical office and try to find something like that in Canada. Our medical clinic looks like a five star hotel, we never wait, everything is digitized and modern. But not everyone has access, that point is ceded.
- 6y ago
- pwinnski 6y agoThe employees in the US are probably making closer to $30/hr than $70/hr, but their time is being billed at the higher rate, with the difference going into "overhead."
- nickthemagicman 6y agoCha ching. Here's the issue. That 70$ 'overhead' charge.
- winter_blue 6y agoThat sort of overhead should frankly be illegal. It's exorbitant. To pay the worker $30/hr, and charge a $70/hr overhead on top of it is daylight robbery.
- nend 6y agoIs it really? In my experience the overhead for salaried software developers working for contract shops is greater in both raw amount and percentage that that. This was 10 years ago but I knew developers making $60/hour in salary while being contracted out for 3 times that amount.
- winter_blue 6y ago> making $60/hour in salary while being contracted out for 3 times that amount Those devs should have listened to patio11 (Patrick McKenzie)'s advise, and directed built a relationship with the companies they were being contracted out to.
- s1artibartfast 6y agoUnfortunately both California and can the contracting companies are opposed to this. Most companies are not interested in working with sole proprietorships due to the legal liability.
- 6y ago
- bleepblorp 6y agoIt'd be interesting to see the what percentage of the labor billing rate trickles down to the actual workers in the US vs elsewhere. If the trickle down percentage is equal then the problem in the US is extractive labor unions; if US workers get a smaller percentage of the billing rate then the problem is extractive behavior by contractors. These problems require different solutions, so any attempts at cost control would need to determine which of these possibilities is in force. US healthcare costs will also almost certainly feed into higher employee compensation for American workers. European employers will be paying into health care in some form or other (either through taxes or private insurance) but overall healthcare costs in Europe are far lower than in the US.
- benjohnson 6y agoIf there’s Federal money involved, most of it does trickle down to the worker. Each contractor has to report what they paid to each employee so that nobody is screwed. The idea was that the government didn’t want jobs to be done by cheap labor and they set a wage floor that corresponds to local union labor rates. The wage difference can be quite drastic - floggers pay jumps from $15 Pernod to about $32 per hour where I live. More info: https://en.wikipedia.org/wiki/Davis–Bacon_Act_of_1931 https://en.wikipedia.org/wiki/Davis–Bacon_Act_of_1931
- csours 6y agoPernod?
- anon84598 6y agoI assume it should have been "per hour" but autocorrect got creative
- kingofpandora 6y agoper hour
- BurningFrog 6y agoYeah, but the worker has to be a union member, and they don't let random people join. > The idea was that the government didn’t want jobs to be done by cheap labor To be more specific, they didn't want the jobs to go to black workers.
- croes 6y agoGermany isn't a high labor rate country, they have one of Europes largest low wage sector thanks to the Hartz IV laws implemented by the Bertelsmann Stiftung, a Non-profit foundation to evade taxes.
- bogidon 6y agoMight be a supply issue with completing a vocational school being seen as much more prestigious and desirable in Europe than in the US. “47.2 percent—nearly half—of the German population held a formal vocational qualification in 2016” From: https://wenr.wes.org/2018/06/could-germanys-vocational-education-and-training-system-be-a-model-for-the-u-s https://wenr.wes.org/2018/06/could-germanys-vocational-educa...
- bryanrasmussen 6y agoI personally found it very suspect but looking in Denmark it seems to be correct - https://www.studentum.dk/job-loen/byggearbejder https://www.studentum.dk/job-loen/byggearbejder it's in Danish, but roughly comes out to slightly higher than 30 dollars an hour (and Denmark generally has higher wages than lots of countries)
- mlindner 6y agoYes. This is why Americans have so much hatred of labor unions. They cause extremely high labor costs.
- question000 6y agoAmericans love labor unions it's just that you can get fired for supporting them so people have to remain silent.
- mlindner 6y agoThat's illegal, so not actually the case.
- question000 6y agoNo it's not I've seen dozens of people fired just for talking about labor unions, it's extremely common. Just google it.
- originalvichy 6y agoEurope, especially Nordics, are funny like that. Menial jobs are costly and they are automated ASAP since human personnel costs are too high. On the other hand experts are quite cheap. No doubt these two effects feed eachother: easier to hire cheap experts to automate expensive menial jobs than to hire expensive experts to automate cheap jobs.
- deanCommie 6y agoSentences like these are fascinating wedge issues. A conservative/republican commentator would take this as evidence/proof of the indisputable superiority of the American system - truly it is a land of opportunity where people can make 2-3x more than in supposedly rich Europe. A progressive/democratic commentator would instead point out that the LIFESTYLE a laborer can have in Europe at 30$/hour is in many ways superior to that of the equivalent American worker - they have full healthcare coverage, a prolific public transit system, and free university tuition for their children. Then the counter-counter argument would be that the American worker could have a full house, 3 cars, and the FREEDOM to choose to spend money on their healthcare vs something else for their lifestyle, whereas the European laborer is in a system where a lot of choices are made for them. Pretty interesting stuff.
- Bayart 6y agoThe few unions that do exist in the US are surprisingly powerful. European unions are either dying with dwindling influence (France, Britain, Italy), or just a proxy for social welfare and compensation negotiation (Germany, Netherlands, Northern countries).
- jeffbee 6y agoEurope controls wages by keeping the supply of housing high and the price of housing low. Most American cities have an acute shortage of housing and this raises wages. It has nothing to do with unions and their powers.
- desert_boi 6y agoMy experience in Hamburg, Germany was that getting an apartment in the city was waiting for someone else to die. Getting an apartment in Boston took me two weeks. In Germany, it took two months. Germany, at least, keeps costs low by using the common market to depress wages. Housing supply in the dominant cities is very tight vs. wages. See Berlin and Munich.