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So You Want to Do an Infrastructure Package [pdf]

140 points by ruddct 6y ago

ur-whale 6y ago
>Why is American infrastructure so expensive? Unions
- fennecfoxen 6y ago
  Unions may be part of the costs, but please don't underestimate infrastructure failures that arise from in the project planning and execution phases. For instance, the construction union may mean that you pay a man to just stand around and do nothing, but when the MTA doesn't have any idea what people on site are supposed to do to begin with, and when they scrupulously dispose of all the people with project expertise the moment Phase I of the project is over (with no concern at all for Phase II), it's hard to assign that as the root cause for the billions in cost overruns on the Second Avenue Subway.
- afavour 6y ago
  Didn't feel like reading the article then, I take it? Just the text extract in the link provided would be a start.
  - ThrowawayR2 6y ago
    Maybe they did? Quoting from the PDF: > "It is unclear to what extent union labor is a problem outside New York, but within New York it has contributed to rampant overstaffing and wages in the building trades that are well above market rates." Don't shoot the messenger, that's a direct excerpt. [EDIT] For the curious, the full list of reasons is overdesign, poor procurement practices, poor project management, labor, NIMBYism, politicization of projects.
    - afavour 6y ago
      That hardly makes it an accurate summation of the article, though! If the reading process is "open report, Ctrl-F, union", then I'd say the result has already been decided.
    - diob 6y ago
      It's the only mention of union, and it has zero references or numbers included.
      - beastman82 6y ago
        It does have adjectives and nouns, and they are worth considering.
  - topspin 6y ago
    Why bother? You tell me who funds Niskanen Center and I'll tell you what the article's conclusions are.
    - runako 6y ago
      This is linked in their top-level menu: https://www.niskanencenter.org/financials/ https://www.niskanencenter.org/financials/ Donation history (> $5k): https://www.niskanencenter.org/wp-content/uploads/2021/01/Niskanen-Center-funding-1-7-2021.pdf https://www.niskanencenter.org/wp-content/uploads/2021/01/Ni...
      - topspin 6y ago
        I see. Establishment limousine liberal money. Okay: Conclusions: Our infrastructure is unmanageable because of cars and suburbs. We must adopt public transport and consolidate people into cities. That will make everything neat and tidy and reduce costs and save the climate. Plus, they will be far away from our enormous private estates which we intend to keep in all cases. Also, raise taxes.
- chickenpotpie 6y ago
  [citation needed]
  - musicale 6y ago
    Page 15 of the report: "It is unclear to what extent union labor is a problem outside New York, but within New York it has contributed to rampant overstaffing and wages in the building trades that are well above market rates. Prevailing wage laws should be used to ensure local workers earn a fair and competitive wage, not to reward special interest groups and other political insiders."
    - chickenpotpie 6y ago
      Top level comment was that unions were solely to blame for the rising infrastructure costs in America. There’s 14 other pages of causes and those two sentences don’t even address outside of a single state.
    - nonameiguess 6y ago
      Until what? 20 years ago if we're generous, New York construction was specifically controlled by the mafia, which controlled the unions and drove up costs by restricting in a rather extra-legal manner who was even allowed to bid on a job. Painting capture by organized crime as some necessary feature of all labor unions is probably not fair. They captured a lot of the politicians, too, and often also owned the construction companies.
deleted 6y ago
[deleted]
megiddo 6y ago
Monopsony
munk-a 6y ago
Quality Assurance is also a pretty big cost along with labor and materials. The cost of living in America isn't cheap and the materials you're working with (due to their size and weight) were likely manufactured domestically or, if not, were handled domestically during import. America is also super litigious but I don't believe that contributes significantly to public works due to the limits on state and federal liability.
missedthecue 6y ago
I think it's interesting how over time, prices for goods have gone through the floor for many things (food, electronics, clothing, even automobiles, etc...) but prices for services have gone parabolic. Construction, education, and healthcare costs have risen well above CPI for several decades, not just in the US, but in most developed countries.
- willcipriano 6y ago
  This effect was noticed by Baumol and Bowen back in the 60s. https://en.m.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.m.wikipedia.org/wiki/Baumol%27s_cost_disease
  - notacoward 6y ago
    It would be really hard to cite Baumol's cost disease too often. It's a key part of many things we see going on in the economy, and therefore in society more broadly, today.
- kodablah 6y ago
  Makes sense that cost is proportional to skilled/local humans required.
- legitster 6y ago
  https://slatestarcodex.com/2017/02/09/considerations-on-cost-disease/ https://slatestarcodex.com/2017/02/09/considerations-on-cost... >I don’t know why more people don’t just come out and say “LOOK, REALLY OUR MAIN PROBLEM IS THAT ALL THE MOST IMPORTANT THINGS COST TEN TIMES AS MUCH AS THEY USED TO FOR NO REASON, PLUS THEY SEEM TO BE GOING DOWN IN QUALITY, AND NOBODY KNOWS WHY, AND WE’RE MOSTLY JUST DESPERATELY FLAILING AROUND LOOKING FOR SOLUTIONS HERE.” State that clearly, and a lot of political debates take on a different light.
- heavyset_go 6y ago
  > but prices for services have gone parabolic. A few years back, I had a chat with someone who helps developmentally disabled people with job training. The company she worked for billed the state $90/hour for her work, but paid her $15/hour. I'd love to know where the rest of that money went, because it certainly didn't go to those performing services, nor to their professional development, nor to disabled people.
DonnyV 6y ago
Multiple issues and its actually not labor. https://pedestrianobservations.com/2019/03/03/why-american-costs-are-so-high-work-in-progress/ https://pedestrianobservations.com/2019/03/03/why-american-c...
- deleted 6y ago
  [deleted]
- panic 6y ago
  The author of that blog is also the author of the linked report!
  - rrdharan 6y ago
    The blog is dense but pretty great reading too..
- king_magic 6y ago
  From the PDF: > Labor: in New York, the productivity of construction labor seems unusually low and wages high.
  - beastman82 6y ago
    In a word: unions
ralusek 6y ago
> bureaucracies in East Asia and Continental Europe tend to be better-staffed and more empowered to make professional decisions The key word here is "more empowered." If the state could just say "okay we're transplanting all of the people that live here out of the way so that we can put up a hyperloop, and these are the people who are going to do it, and we'll pay them this much..." infrastructure would move a lot faster, for much less money. Because the US government tends to have far less authority over its citizens than Europe, and especially Asia, it has many free-marketish half measures that create the worst of all possible outcomes. Because the US has to pretend to be market-driven, by allowing private companies and unions to bid on projects, as well as offer people fair market values for their properties in the way of infrastructure, you get all sorts of problems. The main one is that the government is not a normal buyer, and completely throws most markets out of whack. Just look at the "cost plus" sort of funding schemes that have existed in aerospace contracts for decades, a concept that would never in a million years have existed in the free market. I'm not saying that the European or Asian models are better, there are definite benefits to the liberties afforded to Americans...but it is without question far worse if the objective is timely and affordable infrastructure.
- ghaff 6y ago
  >If the state could just say "okay we're transplanting all of the people that live here out of the way so that we can put up a hyperloop, and these are the people who are going to do it, and we'll pay them this much..." That is particular is definitely a tradeoff. The US did do it with things like the Interstate Highway System but I'm actually OK with Eminent Domain being difficult to exercise today.
  - Anechoic 6y ago
    The US did do it with things like the Interstate Highway System Which in part resulted in the passage of NEPA and our current morass.
    - ghaff 6y ago
      Of course, even the Interstate Highway System followed existing railroad right of ways a lot of the time. Although exit ramps and feeder roads still required a lot of eminent domain exercise. (The house I grew up in lost a bunch of property to eminent domain for this reason.)
joe_the_user 6y ago
This situation shows many aspects of American governance reaching a pathological level. You have the patchwork of local, county, state and Federal government. You have the adversarial legal and regulatory framework. And you have a powerful "anti-government" ideology that fails to even understand that most projects happen through the cooperation of industry and the state. And on the other hand you have a "left" that wants to cheer sticking-it-to whatever given corporation rather than pushing sane regulation. And you have dysfunctional ideologies around both taxation and government spending. And NIMBYism but with the opposite being developers wanting no fetters at all, etc, etc.
- DamnYuppie 6y ago
  I feel all of those are underlined or caused by corruption. The left sees corruption of corporations, the right sees corruption of politicians. All of which leads to exactly the fracturing and ideological positioning that you describe. No nation can survive systemic corruption for very long, it is a cancer that eats away at everything.
  - watwut 6y ago
    I mean, right pick Trump for president I doubt they worry about corruption. Imo, things would be more solvable if people reacted to what parties do rather then bs they say.
    - crocodiletears 6y ago
      You underestimate Trump supporter's perception of the existing government's corruption. So long as he existed outside the beltway consensus, and was shaking things up, some nepotism and profiteering was a small price for them to pay. It's also important to note that Trump supporters and 'Republican Republicans' don't really intersect as much as a lot of people assume.
      - TomSwirly 6y ago
        > It's also important to note that Trump supporters and 'Republican Republicans' don't really intersect as much as a lot of people assume. Every single poll contradicts you - shows that Trump is wildly popular with ~80% of Republican voters. Did I miss some big change recently?
arkh 6y ago
Because no one has to gain from low prices. Not the people getting the contracts, not the politicians and their committee getting back donations, not the neighborhood associations suing to get compensation. That's why they want the money coming from the federal level even if it's just for some state infrastructure: the more "fly-over" state people pay for some SV vanity train line, the better.
- AnimalMuppet 6y ago
  The better for who? Certainly not the people from the fly-over states.
- colinmhayes 6y ago
  Fly over states are all net takers. California is a net giver.
  - chickenpotpie 6y ago
    Even more, they’re net takers partly because they’re have more expensive infrastructure. Lots of long roads and bridges that are infrequently used
legitster 6y ago
From the paper: >Overdesign: American infrastructure is often overbuilt, not out of higher quality but out of agency turf battles, obsolete standards like NFPA 130 that have better foreign replacements, or scope creep. >Poor procurement practices: there is improper supervision of private contractors, and things are getting worse as public agencies offload more risk to the private sector, which responds by bidding higher to hedge against the risk; there are also some one-bid contracts, for example the 7 extension in New York, leading to even higher costs. > Poor project management: design review teams are usually understaffed and cannot respond to contractors fast, so there is little institutional capacity to build big projects. Wages for office workers are below market rate and hiring is difficult. >Labor: in New York, the productivity of construction labor seems unusually low and wages high. >NIMBYism: the United States makes it easy to sue, for example NEPA is enforced by lawsuit, whereas its Italian equivalent is enforced by the administrative state. Lawsuits in the US and other lawsuit-happy countries like Germany rarely win, but do delay projects, so there is defensive design, including unnecessary scope in order to buy off political support. Leah Brooks and Zachary Liscow have a paper on the growth in Interstate construction costs over the decades, blaming citizen voice lawsuits for the increase. >Politicization of projects: the civil service is weak compared with both elected politicians and their unelected political appointees, and there is not much continuity in design. One thing I think they missed, environmental impact studies (that aren't even associated with reduced environmental impact!) I remember Seattle's light rail project included 8 years of environmental impact review of a light rail extensions along routes that were planned along existing rail corridors! Also, relating to overdesign, I think younger generations suffer from a cult of perfectionism. But perfect is the enemy of good. A streetcar might seem so much cooler, but a dedicated rapid bus can do more with less money!
- Anechoic 6y ago
  One thing I think they missed, environmental impact studies It's mentioned in the NEPA discussion on page 9, and in the litigation discussion.
- king_magic 6y ago
  It blows my mind that an environmental impact study for a single light rail system can take 8 years, when multiple coronavirus vaccines were created, safely reviewed, then safely administered to hundreds of millions of people in record time. Edit: yes, I get the different level of scale/need between them. My point is: big things can be done safely & responsibly without criminally wasting massive amounts of time.
sillyquiet 6y ago
Tangential, and not a comment on the linked report, but it's interesting to see discussion of a multi-faceted complex problem, if you want to call it that. Everybody seems to pick out the pieces that confirms their personal opinions about What's Wrong With America, where the truth in almost all cases is 'sorta, but it's more complicated and nuanced than that'.
fungiblecog 6y ago
Because when your entire culture is based around the idea that making as much money as possible is a virtue greater than all others, there will be plenty of people breaking your systems in order to make as much money as possible.
markus_zhang 6y ago
Don't know anything about American infrastructure but knows a bit about Canadian ones, or to be more precise, Quebec ones. In short: Corruption.
williamsmj 6y ago
"The Most Expensive Mile of Subway Track on Earth: How excessive staffing, little competition, generous contracts and archaic rules dramatically inflate capital costs for transit in New York" (2017) https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-construction-costs.html https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-...
davidw 6y ago
Anecdotally, I was writing some side-project code to help learn about new housing to support where I live, and I found this project. In the middle of a new piece of the university campus they're building, they want to use a 35 foot flag pole, instead of a 25 foot flag pole. Look at all the paperwork that generated: https://cityview.ci.bend.or.us/Portal/Planning/StatusReference?referenceNumber=PLVAR20210113 https://cityview.ci.bend.or.us/Portal/Planning/StatusReferen... Notices were put up, letters mailed, comments sought (I wrote in, in favor!). All of that for a flagpole with a US flag right in the middle of the property.
chiefofgxbxl 6y ago
This paper addresses bureaucracy and its effects on expense, but it sort of makes the assumption that lowering the price is the goal. It seems to me that high cost is convenient to artificially "create jobs" and bureaucracy, hence it's a feature, not a bug. An example from my local city: our small city (33k pop) won a $10mil grant for downtown revitalization. The money is supposed to help stimulate small business growth in the downtown. The administration spends $1.1 mil tearing down a parking garage, another $600k building a parking lot on the same piece of land of the garage, and they've got their fingers crossed they can get a developer to build an apartment complex there, which means they'll have to tear up the parking lot. The cherry on top is knowing we also commissioned a report to study downtown parking trends, and know that even on the busiest day up to 80% of parking spaces are unused. But the administration celebrated the 10-12 construction jobs they created. Anyone who has taken a basic economics course would recognize this as the Broken Window Fallacy, but our officials either don't know or don't care (my guess is the latter). Spend lots of money - create useless jobs - that's how a productive economy is supposed to work, right?
- notacoward 6y ago
  > high cost is convenient to artificially "create jobs" Is that where the money actually goes, though? Serious question.
- tolbish 6y ago
  And what happened to the other $8.3 million? Isn't the root of the problem then corruption?
- newsclues 6y ago
  Sounds like the dealership controls the local politics.
- Eridrus 6y ago
  It should be, and we should push for it to be. For anu given level of spending, we can either spend it well or poorly, and we should push politicians and agencies to ensure it gets spent well.
- 6y ago
takk309 6y ago
As someone that works for a civil engineering consultant in the transportation field I can attest to the bureaucracy from the State leading to higher costs. We routinely increase our bids because we know that the amount of time spent dealing with them will be large and delt with by a high paided, often highest paid, person on the project. There are quite a few things that we do to appease them people at state DOTs that we don't have to worry about when working with a City or private entity. It come down to two things, in my opinion. First is the nightmare that is Federal funding. The State administers the funding and has to take funding for multiple Federal programs a put it toward a given project. Ultimately they pass the paperwork off to the consultant instead of doing it themselves. Second is the number of people in positions of power that are only in that position due to time spent with the State. These individuals are ineffective at their job (see point 1), and feel they have to justify their position by critiquing stupid things. One example is when we tried to use a different san serif font and column justification on a report. We got a stearns talking to about how ariel is the preferred font and left justified is the preference of the individual. This of course took a half hour meeting that likely cost north of $500 when you account for the wages of the engineers involved.
- A4ET8a8uTh0 6y ago
  I am genuinely curious. How did the meeting end? Did the font get changed? Did anyone say 'really?'? Obviously, the story is ridiculous, but I can't help but wonder how it worked out.
  - takk309 6y ago
    We changed the font and complained about that person over a couple of drinks. Kinda the way things go sometimes.
magwa101 6y ago
Cost plus contracts, duh.
whydoineedone 6y ago
Simply put, there’s no accountability. Nobody really wins if it gets done under budget and ahead of schedule. Lots of people make out like bandits if it takes forever and never gets done. Bureaucracy and ridiculous regulations are true but with accountability these types of problems can be surmounted. Government and government contracting attracts a lot of lazy people who under produce because they’re not compensated on output but rather hours worked. Petty grievances between departments and individuals can tank projects just because some woman felt slighted by what some guy said to her in a meeting a year ago and they both have to approve a project etc. Companies literally get paid millions to build websites that most talented fresh college grads could handle in a few months. However, thanks to the arcane compensation laws, these kids have no experience so their labor category is low and they will not be compensated relative to their older, useless colleagues. The entire system is set up so that the government officials find a few competent individuals to do work and then try to keep them and the smart individuals build these relationships, start their own contracting shops and field out the work to smart fresh college grads and pocketing more than half of the pay they pass along.
cs702 6y ago
> The difference in costs often boils down to domestic state capacity: bureaucracies in East Asia and Continental Europe tend to be better-staffed and more empowered to make professional decisions. The details are naturally more complicated, but the pattern is nonetheless clear: the countries with the lowest infrastructure costs are also the countries where the state acts swiftly, with mechanisms that limit the lag between financing and construction. In other words, states with bigger and better-run governments have lower infrastructure costs.
dnprock 6y ago
I follow cryptocurrency and they usually say: Bitcoin Fixes This. It sounds pretty silly. Bitcoin hasn't really fixed anything. It's just a generalization. But the motto draws attention to the cause of many problems in America: the US Dollar monetary system. The Dollar's reserve currency status causes other countries to flood the US with goods in exchange for the currency. It causes trade balances. The US over time loses its manufacturing and tooling capabilities. Most infrastructure work is custom. You can't build a bridge overseas, ship, and install it in the US. You can build the parts overseas. But it'll take a lot more time and resources to design and assemble them into a bridge in the US. So the final cost ends up being more. I live in a neighborhood built in the 1980s. Up the hill, there are neighborhoods built in the 1990s and 2000s. After 2000s, houses look pretty much the same. The houses are more expensive. But the amount of custom design decreases over time. It's got more and more expensive to build custom things in the US. I don't think it's possible to fix these infrastructure costs until we can fix the monetary policy. I think a new crypto system can provide a solution to this problem. Until then, we're stuck with cheap and unnecessary goods while our infrastructure is slowly deteriorating.
deleted 6y ago
[deleted]
geodel 6y ago
The reasons in this report are like root cause analysis of failures in big companies. They are not usually false but still kinda bullshitty and rarely enlightening on why things happen the way they happen. Simply saying that 6 billion dollar project will cost 400 million in Europe so a wastage of 5.6 billion is hilarious until they give detail breakdown of costs. Maybe they can come out and say all american companies, government authorities, public, politician/ political system are dumb or just corrupt. For now I will just say they are just repeating lazy, half-assed cliches and presenting it like a report. From this report : "Building back flexibly requires empowering low- and mid-level civil servants to work flexibly and at arms-length with private contractors." What does this even mean? Should they work closely? from far to maintain impartiality? just give them verbal directions with no written record to move fast? Or it is just put all good sounding words with no cohesive meaning at all.
- himinlomax 6y ago
  The thesis I believe is that in the US, the public service does not have the resources to do project management and outsources that, typically to those who also do the work and have an incentive to overcharge. In other countries, not only are there people employed by the state who do said project management and have the responsibility and expertise, but when outside PM work is required, it has to be done by a different entity. Nothing to do with being dumb, everything to do with bad incentives.
stretchwithme 6y ago
Compared to what other countries? I think a lot of waste and corruption is due to winner-take-all elections. A representative that represents one party has to answer to that party. If he does not represent its interests, they will elect someone else next time. In winner-take-all elections, you vote for your least worst option and representing one perspective doesn't as matter as much. It's easier to sell your vote to lobbyists. But people are convinced that our elections were implemented in the best possible way, so there is a reluctance to even weigh the options.
santiagobasulto 6y ago
The paper is VERY interesting, but oh boy, how bad is that first visualization... https://imgur.com/8P7Sqop https://imgur.com/8P7Sqop It doesn't include units in the axes and the labels are just centered there. And what do those dots even represent?
m0llusk 6y ago
Much interesting analysis, but some strange mistakes as well. When NYC's Second Avenue was first proposed it was concluded that such a project was possible but would be far too complex and expensive to be reasonable. Over the next hundred years the Second Avenue Subway in NYC would be repeatedly proposed, analyzed, and then rejected as too complex and expensive to make sense. Finally the work went ahead and as usual this analysis claims that this was just another infrastructure project and that despite one hundred years of analysis revealing the extreme complexity and cost this paper claims that the work could have been done cheaply with cut and cover construction despite a hundred years of analysis rejecting the possibility of cheap and easy construction of the Second Avenue subway. Rejecting so much history seems like an awkward way of going about this analysis.
austincheney 6y ago
So common are absurd freeway interchanges in Texas that we have a local term for them: mixmaster. If you search Google for that term you get results for the only interchanges Wikipedia knows of in Texas, both in Dallas. One of those is the only 5 level interchange I can find on Google: https://en.wikipedia.org/wiki/High_Five_Interchange https://en.wikipedia.org/wiki/High_Five_Interchange Ironically, though, the largest freeway interchange in the DFW area, actually 3 almost conjoined separate interchanges occupying a tremendous land area, is only 3 levels near the DFW airport north entrance. At the widest the freeway there is 7 lanes each way, plus 2 lanes of toll each way in the center for a total of 17 to 18 lanes of traffic. Yes, it still gets gridlock. You can see it here: https://www.google.com/maps/@32.93809,-97.0628477,4001m/data=!3m1!1e3 https://www.google.com/maps/@32.93809,-97.0628477,4001m/data...
dang 6y ago
We changed the URL from https://www.niskanencenter.org/report-so-you-want-to-do-an-infrastructure-project/ https://www.niskanencenter.org/report-so-you-want-to-do-an-i... to the actual report. We also changed the submitted title ('Why is American infrastructure so expensive?') to the actual title. Note the site guideline: "Please use the original title, unless it is misleading or linkbait; don't editorialize." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
TomSwirly 6y ago
Graft! Corruption! Why can't these papers even breathe these words?
raffraffraff 6y ago
Man, was I confused. I thought this was going to be about Terraform or building RPMs or something.

140 points by ruddct 6y ago

ur-whale 6y ago

>Why is American infrastructure so expensive? Unions

fennecfoxen 6y ago
Unions may be part of the costs, but please don't underestimate infrastructure failures that arise from in the project planning and execution phases. For instance, the construction union may mean that you pay a man to just stand around and do nothing, but when the MTA doesn't have any idea what people on site are supposed to do to begin with, and when they scrupulously dispose of all the people with project expertise the moment Phase I of the project is over (with no concern at all for Phase II), it's hard to assign that as the root cause for the billions in cost overruns on the Second Avenue Subway.
afavour 6y ago
Didn't feel like reading the article then, I take it? Just the text extract in the link provided would be a start.
- ThrowawayR2 6y ago
  Maybe they did? Quoting from the PDF: > "It is unclear to what extent union labor is a problem outside New York, but within New York it has contributed to rampant overstaffing and wages in the building trades that are well above market rates." Don't shoot the messenger, that's a direct excerpt. [EDIT] For the curious, the full list of reasons is overdesign, poor procurement practices, poor project management, labor, NIMBYism, politicization of projects.
  - afavour 6y ago
    That hardly makes it an accurate summation of the article, though! If the reading process is "open report, Ctrl-F, union", then I'd say the result has already been decided.
  - diob 6y ago
    It's the only mention of union, and it has zero references or numbers included.
    - beastman82 6y ago
      It does have adjectives and nouns, and they are worth considering.
- topspin 6y ago
  Why bother? You tell me who funds Niskanen Center and I'll tell you what the article's conclusions are.
  - runako 6y ago
    This is linked in their top-level menu: https://www.niskanencenter.org/financials/ https://www.niskanencenter.org/financials/ Donation history (> $5k): https://www.niskanencenter.org/wp-content/uploads/2021/01/Niskanen-Center-funding-1-7-2021.pdf https://www.niskanencenter.org/wp-content/uploads/2021/01/Ni...
    - topspin 6y ago
      I see. Establishment limousine liberal money. Okay: Conclusions: Our infrastructure is unmanageable because of cars and suburbs. We must adopt public transport and consolidate people into cities. That will make everything neat and tidy and reduce costs and save the climate. Plus, they will be far away from our enormous private estates which we intend to keep in all cases. Also, raise taxes.
chickenpotpie 6y ago
[citation needed]
- musicale 6y ago
  Page 15 of the report: "It is unclear to what extent union labor is a problem outside New York, but within New York it has contributed to rampant overstaffing and wages in the building trades that are well above market rates. Prevailing wage laws should be used to ensure local workers earn a fair and competitive wage, not to reward special interest groups and other political insiders."
  - chickenpotpie 6y ago
    Top level comment was that unions were solely to blame for the rising infrastructure costs in America. There’s 14 other pages of causes and those two sentences don’t even address outside of a single state.
  - nonameiguess 6y ago
    Until what? 20 years ago if we're generous, New York construction was specifically controlled by the mafia, which controlled the unions and drove up costs by restricting in a rather extra-legal manner who was even allowed to bid on a job. Painting capture by organized crime as some necessary feature of all labor unions is probably not fair. They captured a lot of the politicians, too, and often also owned the construction companies.

deleted 6y ago

[deleted]

megiddo 6y ago

Monopsony

munk-a 6y ago

Quality Assurance is also a pretty big cost along with labor and materials. The cost of living in America isn't cheap and the materials you're working with (due to their size and weight) were likely manufactured domestically or, if not, were handled domestically during import. America is also super litigious but I don't believe that contributes significantly to public works due to the limits on state and federal liability.

missedthecue 6y ago

I think it's interesting how over time, prices for goods have gone through the floor for many things (food, electronics, clothing, even automobiles, etc...) but prices for services have gone parabolic. Construction, education, and healthcare costs have risen well above CPI for several decades, not just in the US, but in most developed countries.

willcipriano 6y ago
This effect was noticed by Baumol and Bowen back in the 60s. https://en.m.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.m.wikipedia.org/wiki/Baumol%27s_cost_disease
- notacoward 6y ago
  It would be really hard to cite Baumol's cost disease too often. It's a key part of many things we see going on in the economy, and therefore in society more broadly, today.
kodablah 6y ago
Makes sense that cost is proportional to skilled/local humans required.
legitster 6y ago
https://slatestarcodex.com/2017/02/09/considerations-on-cost-disease/ https://slatestarcodex.com/2017/02/09/considerations-on-cost... >I don’t know why more people don’t just come out and say “LOOK, REALLY OUR MAIN PROBLEM IS THAT ALL THE MOST IMPORTANT THINGS COST TEN TIMES AS MUCH AS THEY USED TO FOR NO REASON, PLUS THEY SEEM TO BE GOING DOWN IN QUALITY, AND NOBODY KNOWS WHY, AND WE’RE MOSTLY JUST DESPERATELY FLAILING AROUND LOOKING FOR SOLUTIONS HERE.” State that clearly, and a lot of political debates take on a different light.
heavyset_go 6y ago
> but prices for services have gone parabolic. A few years back, I had a chat with someone who helps developmentally disabled people with job training. The company she worked for billed the state $90/hour for her work, but paid her $15/hour. I'd love to know where the rest of that money went, because it certainly didn't go to those performing services, nor to their professional development, nor to disabled people.

DonnyV 6y ago

Multiple issues and its actually not labor. https://pedestrianobservations.com/2019/03/03/why-american-costs-are-so-high-work-in-progress/ https://pedestrianobservations.com/2019/03/03/why-american-c...

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panic 6y ago
The author of that blog is also the author of the linked report!
- rrdharan 6y ago
  The blog is dense but pretty great reading too..
king_magic 6y ago
From the PDF: > Labor: in New York, the productivity of construction labor seems unusually low and wages high.
- beastman82 6y ago
  In a word: unions

ralusek 6y ago

> bureaucracies in East Asia and Continental Europe tend to be better-staffed and more empowered to make professional decisions The key word here is "more empowered." If the state could just say "okay we're transplanting all of the people that live here out of the way so that we can put up a hyperloop, and these are the people who are going to do it, and we'll pay them this much..." infrastructure would move a lot faster, for much less money. Because the US government tends to have far less authority over its citizens than Europe, and especially Asia, it has many free-marketish half measures that create the worst of all possible outcomes. Because the US has to pretend to be market-driven, by allowing private companies and unions to bid on projects, as well as offer people fair market values for their properties in the way of infrastructure, you get all sorts of problems. The main one is that the government is not a normal buyer, and completely throws most markets out of whack. Just look at the "cost plus" sort of funding schemes that have existed in aerospace contracts for decades, a concept that would never in a million years have existed in the free market. I'm not saying that the European or Asian models are better, there are definite benefits to the liberties afforded to Americans...but it is without question far worse if the objective is timely and affordable infrastructure.

ghaff 6y ago
>If the state could just say "okay we're transplanting all of the people that live here out of the way so that we can put up a hyperloop, and these are the people who are going to do it, and we'll pay them this much..." That is particular is definitely a tradeoff. The US did do it with things like the Interstate Highway System but I'm actually OK with Eminent Domain being difficult to exercise today.
- Anechoic 6y ago
  The US did do it with things like the Interstate Highway System Which in part resulted in the passage of NEPA and our current morass.
  - ghaff 6y ago
    Of course, even the Interstate Highway System followed existing railroad right of ways a lot of the time. Although exit ramps and feeder roads still required a lot of eminent domain exercise. (The house I grew up in lost a bunch of property to eminent domain for this reason.)

joe_the_user 6y ago

This situation shows many aspects of American governance reaching a pathological level. You have the patchwork of local, county, state and Federal government. You have the adversarial legal and regulatory framework. And you have a powerful "anti-government" ideology that fails to even understand that most projects happen through the cooperation of industry and the state. And on the other hand you have a "left" that wants to cheer sticking-it-to whatever given corporation rather than pushing sane regulation. And you have dysfunctional ideologies around both taxation and government spending. And NIMBYism but with the opposite being developers wanting no fetters at all, etc, etc.

DamnYuppie 6y ago
I feel all of those are underlined or caused by corruption. The left sees corruption of corporations, the right sees corruption of politicians. All of which leads to exactly the fracturing and ideological positioning that you describe. No nation can survive systemic corruption for very long, it is a cancer that eats away at everything.
- watwut 6y ago
  I mean, right pick Trump for president I doubt they worry about corruption. Imo, things would be more solvable if people reacted to what parties do rather then bs they say.
  - crocodiletears 6y ago
    You underestimate Trump supporter's perception of the existing government's corruption. So long as he existed outside the beltway consensus, and was shaking things up, some nepotism and profiteering was a small price for them to pay. It's also important to note that Trump supporters and 'Republican Republicans' don't really intersect as much as a lot of people assume.
    - TomSwirly 6y ago
      > It's also important to note that Trump supporters and 'Republican Republicans' don't really intersect as much as a lot of people assume. Every single poll contradicts you - shows that Trump is wildly popular with ~80% of Republican voters. Did I miss some big change recently?

arkh 6y ago

Because no one has to gain from low prices. Not the people getting the contracts, not the politicians and their committee getting back donations, not the neighborhood associations suing to get compensation. That's why they want the money coming from the federal level even if it's just for some state infrastructure: the more "fly-over" state people pay for some SV vanity train line, the better.

AnimalMuppet 6y ago
The better for who? Certainly not the people from the fly-over states.
colinmhayes 6y ago
Fly over states are all net takers. California is a net giver.
- chickenpotpie 6y ago
  Even more, they’re net takers partly because they’re have more expensive infrastructure. Lots of long roads and bridges that are infrequently used

legitster 6y ago

From the paper: >Overdesign: American infrastructure is often overbuilt, not out of higher quality but out of agency turf battles, obsolete standards like NFPA 130 that have better foreign replacements, or scope creep. >Poor procurement practices: there is improper supervision of private contractors, and things are getting worse as public agencies offload more risk to the private sector, which responds by bidding higher to hedge against the risk; there are also some one-bid contracts, for example the 7 extension in New York, leading to even higher costs. > Poor project management: design review teams are usually understaffed and cannot respond to contractors fast, so there is little institutional capacity to build big projects. Wages for office workers are below market rate and hiring is difficult. >Labor: in New York, the productivity of construction labor seems unusually low and wages high. >NIMBYism: the United States makes it easy to sue, for example NEPA is enforced by lawsuit, whereas its Italian equivalent is enforced by the administrative state. Lawsuits in the US and other lawsuit-happy countries like Germany rarely win, but do delay projects, so there is defensive design, including unnecessary scope in order to buy off political support. Leah Brooks and Zachary Liscow have a paper on the growth in Interstate construction costs over the decades, blaming citizen voice lawsuits for the increase. >Politicization of projects: the civil service is weak compared with both elected politicians and their unelected political appointees, and there is not much continuity in design. One thing I think they missed, environmental impact studies (that aren't even associated with reduced environmental impact!) I remember Seattle's light rail project included 8 years of environmental impact review of a light rail extensions along routes that were planned along existing rail corridors! Also, relating to overdesign, I think younger generations suffer from a cult of perfectionism. But perfect is the enemy of good. A streetcar might seem so much cooler, but a dedicated rapid bus can do more with less money!

Anechoic 6y ago
One thing I think they missed, environmental impact studies It's mentioned in the NEPA discussion on page 9, and in the litigation discussion.
king_magic 6y ago
It blows my mind that an environmental impact study for a single light rail system can take 8 years, when multiple coronavirus vaccines were created, safely reviewed, then safely administered to hundreds of millions of people in record time. Edit: yes, I get the different level of scale/need between them. My point is: big things can be done safely & responsibly without criminally wasting massive amounts of time.

sillyquiet 6y ago

Tangential, and not a comment on the linked report, but it's interesting to see discussion of a multi-faceted complex problem, if you want to call it that. Everybody seems to pick out the pieces that confirms their personal opinions about What's Wrong With America, where the truth in almost all cases is 'sorta, but it's more complicated and nuanced than that'.

fungiblecog 6y ago

Because when your entire culture is based around the idea that making as much money as possible is a virtue greater than all others, there will be plenty of people breaking your systems in order to make as much money as possible.

markus_zhang 6y ago

Don't know anything about American infrastructure but knows a bit about Canadian ones, or to be more precise, Quebec ones. In short: Corruption.

williamsmj 6y ago

"The Most Expensive Mile of Subway Track on Earth: How excessive staffing, little competition, generous contracts and archaic rules dramatically inflate capital costs for transit in New York" (2017) https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-construction-costs.html https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-...

davidw 6y ago

Anecdotally, I was writing some side-project code to help learn about new housing to support where I live, and I found this project. In the middle of a new piece of the university campus they're building, they want to use a 35 foot flag pole, instead of a 25 foot flag pole. Look at all the paperwork that generated: https://cityview.ci.bend.or.us/Portal/Planning/StatusReference?referenceNumber=PLVAR20210113 https://cityview.ci.bend.or.us/Portal/Planning/StatusReferen... Notices were put up, letters mailed, comments sought (I wrote in, in favor!). All of that for a flagpole with a US flag right in the middle of the property.

chiefofgxbxl 6y ago

This paper addresses bureaucracy and its effects on expense, but it sort of makes the assumption that lowering the price is the goal. It seems to me that high cost is convenient to artificially "create jobs" and bureaucracy, hence it's a feature, not a bug. An example from my local city: our small city (33k pop) won a $10mil grant for downtown revitalization. The money is supposed to help stimulate small business growth in the downtown. The administration spends $1.1 mil tearing down a parking garage, another $600k building a parking lot on the same piece of land of the garage, and they've got their fingers crossed they can get a developer to build an apartment complex there, which means they'll have to tear up the parking lot. The cherry on top is knowing we also commissioned a report to study downtown parking trends, and know that even on the busiest day up to 80% of parking spaces are unused. But the administration celebrated the 10-12 construction jobs they created. Anyone who has taken a basic economics course would recognize this as the Broken Window Fallacy, but our officials either don't know or don't care (my guess is the latter). Spend lots of money - create useless jobs - that's how a productive economy is supposed to work, right?

notacoward 6y ago
> high cost is convenient to artificially "create jobs" Is that where the money actually goes, though? Serious question.
tolbish 6y ago
And what happened to the other $8.3 million? Isn't the root of the problem then corruption?
newsclues 6y ago
Sounds like the dealership controls the local politics.
Eridrus 6y ago
It should be, and we should push for it to be. For anu given level of spending, we can either spend it well or poorly, and we should push politicians and agencies to ensure it gets spent well.
6y ago

takk309 6y ago

As someone that works for a civil engineering consultant in the transportation field I can attest to the bureaucracy from the State leading to higher costs. We routinely increase our bids because we know that the amount of time spent dealing with them will be large and delt with by a high paided, often highest paid, person on the project. There are quite a few things that we do to appease them people at state DOTs that we don't have to worry about when working with a City or private entity. It come down to two things, in my opinion. First is the nightmare that is Federal funding. The State administers the funding and has to take funding for multiple Federal programs a put it toward a given project. Ultimately they pass the paperwork off to the consultant instead of doing it themselves. Second is the number of people in positions of power that are only in that position due to time spent with the State. These individuals are ineffective at their job (see point 1), and feel they have to justify their position by critiquing stupid things. One example is when we tried to use a different san serif font and column justification on a report. We got a stearns talking to about how ariel is the preferred font and left justified is the preference of the individual. This of course took a half hour meeting that likely cost north of $500 when you account for the wages of the engineers involved.

A4ET8a8uTh0 6y ago
I am genuinely curious. How did the meeting end? Did the font get changed? Did anyone say 'really?'? Obviously, the story is ridiculous, but I can't help but wonder how it worked out.
- takk309 6y ago
  We changed the font and complained about that person over a couple of drinks. Kinda the way things go sometimes.

magwa101 6y ago

Cost plus contracts, duh.

whydoineedone 6y ago

Simply put, there’s no accountability. Nobody really wins if it gets done under budget and ahead of schedule. Lots of people make out like bandits if it takes forever and never gets done. Bureaucracy and ridiculous regulations are true but with accountability these types of problems can be surmounted. Government and government contracting attracts a lot of lazy people who under produce because they’re not compensated on output but rather hours worked. Petty grievances between departments and individuals can tank projects just because some woman felt slighted by what some guy said to her in a meeting a year ago and they both have to approve a project etc. Companies literally get paid millions to build websites that most talented fresh college grads could handle in a few months. However, thanks to the arcane compensation laws, these kids have no experience so their labor category is low and they will not be compensated relative to their older, useless colleagues. The entire system is set up so that the government officials find a few competent individuals to do work and then try to keep them and the smart individuals build these relationships, start their own contracting shops and field out the work to smart fresh college grads and pocketing more than half of the pay they pass along.

cs702 6y ago

> The difference in costs often boils down to domestic state capacity: bureaucracies in East Asia and Continental Europe tend to be better-staffed and more empowered to make professional decisions. The details are naturally more complicated, but the pattern is nonetheless clear: the countries with the lowest infrastructure costs are also the countries where the state acts swiftly, with mechanisms that limit the lag between financing and construction. In other words, states with bigger and better-run governments have lower infrastructure costs.

dnprock 6y ago

I follow cryptocurrency and they usually say: Bitcoin Fixes This. It sounds pretty silly. Bitcoin hasn't really fixed anything. It's just a generalization. But the motto draws attention to the cause of many problems in America: the US Dollar monetary system. The Dollar's reserve currency status causes other countries to flood the US with goods in exchange for the currency. It causes trade balances. The US over time loses its manufacturing and tooling capabilities. Most infrastructure work is custom. You can't build a bridge overseas, ship, and install it in the US. You can build the parts overseas. But it'll take a lot more time and resources to design and assemble them into a bridge in the US. So the final cost ends up being more. I live in a neighborhood built in the 1980s. Up the hill, there are neighborhoods built in the 1990s and 2000s. After 2000s, houses look pretty much the same. The houses are more expensive. But the amount of custom design decreases over time. It's got more and more expensive to build custom things in the US. I don't think it's possible to fix these infrastructure costs until we can fix the monetary policy. I think a new crypto system can provide a solution to this problem. Until then, we're stuck with cheap and unnecessary goods while our infrastructure is slowly deteriorating.

deleted 6y ago

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geodel 6y ago

The reasons in this report are like root cause analysis of failures in big companies. They are not usually false but still kinda bullshitty and rarely enlightening on why things happen the way they happen. Simply saying that 6 billion dollar project will cost 400 million in Europe so a wastage of 5.6 billion is hilarious until they give detail breakdown of costs. Maybe they can come out and say all american companies, government authorities, public, politician/ political system are dumb or just corrupt. For now I will just say they are just repeating lazy, half-assed cliches and presenting it like a report. From this report : "Building back flexibly requires empowering low- and mid-level civil servants to work flexibly and at arms-length with private contractors." What does this even mean? Should they work closely? from far to maintain impartiality? just give them verbal directions with no written record to move fast? Or it is just put all good sounding words with no cohesive meaning at all.

himinlomax 6y ago
The thesis I believe is that in the US, the public service does not have the resources to do project management and outsources that, typically to those who also do the work and have an incentive to overcharge. In other countries, not only are there people employed by the state who do said project management and have the responsibility and expertise, but when outside PM work is required, it has to be done by a different entity. Nothing to do with being dumb, everything to do with bad incentives.

stretchwithme 6y ago

Compared to what other countries? I think a lot of waste and corruption is due to winner-take-all elections. A representative that represents one party has to answer to that party. If he does not represent its interests, they will elect someone else next time. In winner-take-all elections, you vote for your least worst option and representing one perspective doesn't as matter as much. It's easier to sell your vote to lobbyists. But people are convinced that our elections were implemented in the best possible way, so there is a reluctance to even weigh the options.

santiagobasulto 6y ago

The paper is VERY interesting, but oh boy, how bad is that first visualization... https://imgur.com/8P7Sqop https://imgur.com/8P7Sqop It doesn't include units in the axes and the labels are just centered there. And what do those dots even represent?

m0llusk 6y ago

Much interesting analysis, but some strange mistakes as well. When NYC's Second Avenue was first proposed it was concluded that such a project was possible but would be far too complex and expensive to be reasonable. Over the next hundred years the Second Avenue Subway in NYC would be repeatedly proposed, analyzed, and then rejected as too complex and expensive to make sense. Finally the work went ahead and as usual this analysis claims that this was just another infrastructure project and that despite one hundred years of analysis revealing the extreme complexity and cost this paper claims that the work could have been done cheaply with cut and cover construction despite a hundred years of analysis rejecting the possibility of cheap and easy construction of the Second Avenue subway. Rejecting so much history seems like an awkward way of going about this analysis.

austincheney 6y ago

So common are absurd freeway interchanges in Texas that we have a local term for them: mixmaster. If you search Google for that term you get results for the only interchanges Wikipedia knows of in Texas, both in Dallas. One of those is the only 5 level interchange I can find on Google: https://en.wikipedia.org/wiki/High_Five_Interchange https://en.wikipedia.org/wiki/High_Five_Interchange Ironically, though, the largest freeway interchange in the DFW area, actually 3 almost conjoined separate interchanges occupying a tremendous land area, is only 3 levels near the DFW airport north entrance. At the widest the freeway there is 7 lanes each way, plus 2 lanes of toll each way in the center for a total of 17 to 18 lanes of traffic. Yes, it still gets gridlock. You can see it here: https://www.google.com/maps/@32.93809,-97.0628477,4001m/data=!3m1!1e3 https://www.google.com/maps/@32.93809,-97.0628477,4001m/data...

dang 6y ago

We changed the URL from https://www.niskanencenter.org/report-so-you-want-to-do-an-infrastructure-project/ https://www.niskanencenter.org/report-so-you-want-to-do-an-i... to the actual report. We also changed the submitted title ('Why is American infrastructure so expensive?') to the actual title. Note the site guideline: "Please use the original title, unless it is misleading or linkbait; don't editorialize." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

TomSwirly 6y ago

Graft! Corruption! Why can't these papers even breathe these words?

raffraffraff 6y ago

Man, was I confused. I thought this was going to be about Terraform or building RPMs or something.