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Comment by nonameiguess | Hacker News Reader

I don't see this discussed at all, but if you're going to use New York City as your exemplar and you're going back to 1910 for data, I don't see how you can avoid the fact that both labor unions and the construction companies were under the control of the mafia. They put people on the payroll to do literally nothing, sold materials at way above market value, and the buyer had no choice but to pay because anyone underbidding would get murdered.

Unfortunately, the ratchet effect for pricing means getting rid of mafia control doesn't necessarily undo the cost increases they dictated. Also, prevailing wage practices mean labor unions for the same trades that aren't themselves corrupt still end up with the same price inflation, at least regionally.

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I'm not sold on labor unions being the primary factor in this, though they may contribute, because construction costs in the US are so much higher than countries like France, which has even stronger labor unions and stricter regulation. I find it hard to believe that US labor unions are able to extract so much more value than their French counterparts.

I think a bigger culprit is excessive local control and zoning restrictions, wielded to benefit property owners or to bleed developers and generate revenue for city governments. The shocking part, IMO, is that these costs far outweigh the cost added by notoriously strong French labor unions and EU regulation.

Unions in the US work different from France.

In France unions wouldn't attempt to get their people $200/hour that the sandhogs in NYC get. We should bring the high priced unions to a realistic wage. However most union wages are not that far out of line.

Also in France the union is more relaxed about letting go of jobs that are automated away. There is no reason a TBM needs twice as many people to operate it in NYC as in France. There is no reason for any trains to have a conductor anymore, and train drivers are something that should be all but dead as well (though France is way behind the automation curve here as well)

That said, union labor is only a small part of the problem. Even if all of the most anti-union propaganda is taken as 100% true, union labor is still only a small fraction of the total cost of any build in the US. As such we need to look hard at what is going on in the other parts of construction.

Thanks to the EU construction companies in France have access to Eastern European labourers. And they don't do unions.

From family in the industry, my understanding is it’s not union benefits/wages/etc per se, but more the work rules that haven’t changed with the times driving over staffing, inability to fire bad performers, and overtime issues.

There’s a lot of on-the-clock non-work built into the work rules. My relatives in the industry described the typical day as involving on-the-clock time built in for cleanup&changing into/out of work clothes, briefing on tasks for the day, safety briefing (AM and again after lunch for legal reasons), smoke/coffee breaks, etc. The longest stretch of uninterrupted construction is about a 2 hour sprint into the end of the day.

On the staffing front, the only lever a project manager has is to give the 2-3 hardworking guys out of 12 a boatload of overtime hours to get the actual work done. This is one reason that on most every job site around the city you see some pretty sick cars. Those 2-3 guys are getting 50% of the work done out of the 12, and getting paid Google engineering money for it.

NYT article years back talked about 2nd avenue subway covered examples of work rules. Tunnel boring machine in NY requires 3-4x the staffing of Paris, because thats the contract negotiated in the 70s when it was seen to be reducing jobs.. and no one has revisited it. This is no small figure as we have a handful of these digging tunnels the last few years, at the rate of 50ft/day... for months. Similarly there is a mandatory on-site oiler who basically sits in the break room all day because the machines do not need constant oiling anymore the way they did when the rule was written half a century ago.

One example from my relative - on a large NYC project he worked, they couldn’t take deliveries from suppliers on Saturday because it required the job site to be opened. Per union rules this would have required some inane number of staff to be on-site getting overtime rather than just say the guy to open the gate & staff (if any) required to empty the truck.

A lot of this is because public sector unions are treated as a voting constituent rather than a vendor by the government, and no politician ever wants to cross them.

I have some family in the industry as well and they report the same thing happens with every crew, a few of the workers are what you would call "ninjas/rockstars" in software and the rest are just there to do the minimum. Unfortunately it's hard to tell when hiring because everyone acts motivated for the job and their real work ethic doesn't show up until a few weeks later and you're stuck with them.

Right on a normal project you’d weed out the poor performers but in this case its basically not possible. The workers knowing this is the case leads to a class of workers who show up and do the minimum. As long as they don’t do anything overtly that would trigger firing for cause, they can coast from project to project.

Therefore the only way project managers can get anything done is to give 25% of the team the opportunity to work 2x the hours for 2.5-3x the pay.

So instead of paying just for your 12 guys, you are paying for equivalent of 9+(3x3) = 18 guys when its really like 6-9 guys worth of work getting done.

I will also add that there is essentially a ton of overhead built in by construction firms dealing with the city/MTA/PA. The industry generally sees them as being difficult customers who change their mind, plan poorly, and have a lot of change requests. This results in a fairly small pool of firms bidding on projects, the costs being padded, plus overruns and change requests being tacked on as they go for even more cost.

I read a paper on tunneling costs. One of their explanations why costs were higher in the US was the government shifts the risk onto the contractor. And then tries to save money by not employing enough oversight.

The result low numbers of heavily padded bids on contracts. And then execution tends to be inflexible and prone to bogging down.

Another factor I have other family members who dealt with the city on the technology side rather than construction side is certifications / qualifications.

There are only certain qualified bidders for projects that have attained a level of certification from the city. This reduces the pool of bidders, but it also just adds cost layers.

I have a relative that worked (briefly) at a firm that bids on city tech projects and then delegates all development implementation to tech subcontractors who then sub out most of it to offshore, with a few onshore dev&management.

The subcontractor can't bid because they don't have the scale to get the certifications, so the city pays a 40% margin to the certified contractor who is doing glorified project management.

I would be shocked if the same thing wasn't happening on the construction contracting/bidding process side of city/state/etc work.

> 40% margin to the certified contractor who is doing glorified project management.

This makes sense. My dad was an engineer working for the Feds. Really the job is technical project management and oversight. In the US there is a fetish for keeping the government workforce small. Which then results in outsourcing things at great expense.

Example I've heard that part of the reason there were delays and and cost overruns with the eastern span of the bay bridge was because CALTRANS didn't have enough engineers to do effective and timely oversight. Nor engineers with the proper experience.

Why exactly should construction workers clean up, change, and get briefed for free? How are those not work? Do you attend work meetings for free? Why don't construction workers deserve breaks? Do you ever take breaks at work? If so, why do you deserve to be paid for these things when construction workers don't? Be explicit.

The idea that US politicians never cross the public sector unions isn't compatible with the facts. The Taft-Hartley Act is law, and PATCO was destroyed.

Everyone deserves breaks and for some level of setup/cleanup to be on the clock. Some amount of what is enshrined in the work rules is just excessively cushy. However there is a big difference between stuff built into these work rules vs what happens in private industry.

The basic question is - do the work rules restrict employers from adapting to productivity enhancing technology changes over time? The goods&services in the US which go up in cost much faster than inflation are the areas where we are unable to harness labor saving productivity - education, medicine, and it would seem municipal capital construction projects.

Does your employer retain Fortran programmers on-staff in the break room because they signed a contract when Fortran was important? If your employer moved all your compute to the cloud, would you keep 100% of your now redundant datacenter staff onboard? Does your employer keep the underperforming 25% of the team perpetually and just grant paid overtime in the $100k+ to the superstars to cover the gap? Does your office building maintain an elevator operator in each cab despite having automated the elevator 50 years ago?

This is the difference between private firms and the public sector union stuff you deal with in places like NYC.

I mean yeah, it sounds like a pretty nice work environment and I'd love if my (easier/safer) office job had all that paid time, rules and work limits built in. However.. I get why it seems nothing gets done in NYC construction because of it?

A fun example - there was a 6 month project to replace a set of 2-story staircase at my subway station. The demolition work was rather swift. I assumed they were building on-site if it was going to take 6 months. Lo and behold, it was actually a pre-fab staircase they trucked in. However not only did it take 6 months to simply install that pre-fab staircase, but they ran over by a few months! They actually had to come back and re-close it and do some repairs afterwards too. Meanwhile at the corner below that train station there was a McDonalds. I laughed as I watched them gut renovate it over the course of a weekend so they could be back in business by Monday selling food to riders.

If you haven't seen NYC municipal construction up close, its hard to fathom just how screwed up it is.

I'm glad you admit everyone deserves breaks; it seems to have been remarkably easy to convince you. I'm also glad to see your position on paying for the rest shift from outright opposition to unspecified contracts being excessive.

None of the rest of your reply is actually a response to what I said, though some of it is interesting. You also notably didn't respond to what I said about politicians.

Regarding Fortran programmers' contracts being honored, I would certainly hope any business would meet its contractual obligations (when they are moral and legal). Surely you aren't actually suggesting they shouldn't? Whether signing such a contract was a good idea or not, the very concept of a contract is founded on actually executing the terms of the agreement afterward.

I have never encountered a business that consistently swiftly dropped the underperforming parts of the team. I know that stack ranking firms supposedly exist, but they are far from typical. Even if your employment history is atypical, surely you've encountered less than efficient employees at clients, at vendors, and just out in the world in retail or restaurants; have you never happened to observe some of them staying in those positions at length? If you have seen private enterprise up close, it's hard to fathom the idea that it runs lean operations without waste.

Furthermore, many businesses have employees, sometimes many of them, who don't have the kind of clear work products that would make "the underperforming 25% of the team" potentially conceptually coherent. Plenty have employees with as little to do as a TBM oiler or an elevator operator. The market isn't just taking its time in pushing them to be more efficient, either. Actual markets and actual managers don't work like in an entry-level economics class.

In New York City unions are essentially a subsidiary of the political system, funneling money into reelection champagnes. In return politicians return their support by requiring that any government contract must be awarded to contractors that use union labor. It is all a racket. I have heard stories from people who have done civil work in NYC and the level of corruption and waste is staggering. Like $5000 billed labor hours to drive to a site to plug in a cable. Firms will bit a 50% surcharge on any projects in NYC to compensate with the red tape and union labor costs.

There are still stupid high costs for stuff and people are still put on the payroll to do nothing. $70/hr for a guy who does nothing but get coffee... https://nypost.com/2018/03/05/union-workers-are-making-42-pe...

There was a great piece done by John Stossel about why a pretty basic public park bathroom cost $2M to build and took years to finish construction. https://www.youtube.com/watch?v=qKRuhiMDOjo

John Stossel really shows his hand in that piece when he uses "wheelchair access" as an example of government spending run amok. Why shouldn't disabled people should be able to access facilities they pay for with their tax dollars? Why is complying with the ADA--a bipartisan law signed by George H.W. Bush--seen as a waste of taxpayer money?

He certainly does mention that and it doesn't seem clear why, but either way how does something as basic as a restroom cost that much to build? You think there isn't a lot of waste involved and at the tax payers expense?

The ADA might be generally a good idea, but that doesn't mean that everything it makes you do is a good idea.

On my street, the city(near Denver) recently added 3 curb cuts for ADA compliance. I don't know how much those curb cuts cost, but they weren't free. Now - no one really walks down my street. There were curb cuts at both ends of the block. Every driveway has a curb cut. But more curb cuts needed to be added because of the ADA, even though there is no clear explanation of how anyone with a movement disability is going to benefit from these new cuts.

Do you ever question why the sidewalk was unused? Without curb cuts, any potential sidewalk user with wheels is impaired with a detour through the street or a cumbersome stop and lift process.

Does a parent with their kids in a stroller get discouraged by this? How about those with Rollerblades, non-electric scooters, or any kind of dolly?

Curb cuts for cars are often a notable detour for other road users, many have a 1/2 inch lip (unlike sidewalk curb cuts).

You're telling me all the reasons that curb cuts may be a good idea, but not why they are actually a good idea in my neighborhood(not that I blame you since you don't know where I live). Anyways - that is really my point. ADA has good general ideas, but it can be too generalized to be usefully applied to many neighborhoods.

> Do you ever question why the sidewalk was unused?

No, because it is clear. It is unused because the only reason anyone would walk down it is if they lived in the neighborhood. So people do use it, but the number of unique users is approximately how many people live in the 10 houses on the street.

> Without curb cuts

There are a ton of curb cuts. Literally every 70' is a curb cut for the entire length of the street before they did their work. Now there are three more curb cuts.

> Does a parent with their kids in a stroller get discouraged by this?

I'm a parent with a stroller and it has never been a problem. Hasn't been a problem for my wife either who is significantly weaker than me and has a bad back.

> How about those with Rollerblades, non-electric scooters, or any kind of dolly?

These are also me, and no, no problem. Also me on a skateboard without an issue. And it's not because I'm great at skateboarding, since I literally just started 2 months ago.

> Curb cuts for cars are often a notable detour for other road users

There's zero lip on any of the 12 curb cuts on the street. I know this because I've ridden my skateboard over them a bunch of times and have never fallen.

From what you describe you live on a dead end road or cul-de-sac that needs more pathways.

This poor connectivity is part of why states and localities have banned cul-de-sacs and started enforcing road end connection ordinances. Here in Seattle there are many dead end roads that have a staircase down to the next road (usually a 2 story drop) to tie our hilly city's sidewalks together.

Should even a wheelchair accessible public restroom cost $2M and take years to finish?

Here is a book that describes various 'corrupt' schemes: Corruption and Racketeering in the New York City Construction Industry: The Final Report of the New York State Organized Crime Taskforce

Here is a pdf the report: https://www.ceic.gouv.qc.ca/fileadmin/Fichiers_client/centre...

I have worked construction in San Francisco, and a former General Contractor.

There is a cost difference between all union projects, and non-union projects.

The costs seem outrageous at first. If I wanted to hire a union local 6 Electican a few years ago the union would charge me $101/hr. for a skilled worker to show up.

Yes--it sounds nutty?

The answer is bypass the union, and go non-union?

When all us said and done, and the project is completed, and the developer gets the bill; the few projects I worked on, the total cost of building was roughly the same?

That doesn't take into account what non-union shops cost society either.

Very few non-union shops provide health care. If they do, it's usually a lousy plan.

Workers get sick, or hurt, and worker's compensation runs out; you have workers looking for government medical care.

My point is I'm pretty sure the mob is not affiliated with unions in San Francisco. (I know that was not your point)

My main point is when the building is completed, and it's time for the developer to sell the shiny new building; the price you pay is exactly the same.

Non-union workers make developers more money. The buyer will not see those savings.

You the buyer will not receive a better deal ever. The market determines the price.

Now--if you are the developer, it's a no brainer--kind of--you want the building built as cheaply as possible. You hire non-union, provide lousy training, but live in a grand mansion. You spit out a few spoiled kids, and they run the money machine. (Big Bill of Bradley electric was apprentice for 5 years. Learned the trade. Turned around and opened a non-union shop. Made millions. Made so much money he could shoot his son in-law, and somehow get out if a long jail sentence. Making a lot of money is nice?)

Many unions now have a no compete clause in their agreement. Unions don't want to pay for your schooling, and have their guys opening up non-union shops. I am pretty sure it's never enforced, or even legal? Wow--I'm just writing too much today. Don't feel that great? I'm finding this opening depressing in a weird way. Sorry about bothering anyone with my issues. I sometimes have no one to talk to.)

O.k, I say "kind of" because with a union run job, it's usually done on time, and done well.

This crazy rant is basically developers are usually the only one's saving money with non-union help.

> My main point is when the building is completed, and it's time for the developer to sell the shiny new building; the price you pay is exactly the same.

It is more complicated than that.

The way that supply and demand works, is that if costs go up, then there is less reason to create new supply.

And a lower supply of an item, means that prices, for the overall market, will go up.

That is how supply and demand works, and housing is no different.

> You the buyer will not receive a better deal ever. The market determines the price.

The market is determined by supply and demand. This is standard, 101 economic theory. If costs go up, supply go down (or supply increases a smaller amount), and price goes up.

> O.k, I say "kind of" because with a union run job, it's usually done on time, and done well.

This is why owners of Class A real estate usually mandate union labor, at least for MEP trades.

I bid and run work at a union shop, it’s sometimes difficult to compete on prevailing wage/public jobs here since only the cash wage portion is counted and not the benefits portion. So, a non-union shop can pay the $45/hr prevailing wage and cheap out on fringe benefits, maybe an additional 12-15/hr, where the union labor gets the prevailing wage and negotiated fringe benefits package that is roughly 2x the base wage (total comp). Right now we pay union journeyman electricians $87/hr in IBEW 292, which will go to $90/hr next Monday.

The good thing is, there’s plenty of work for union shops since as I mentioned, lots of Class A real estate and giant companies stick to union labor for construction, as the quality or perceived quality is higher (in general).

You’re also correct about the extra savings going to the developer, if you hire non-union labor and are bidding against a union shop and it’s a lump sum bid, you only need to beat the union guy by 1-2%, the rest is profit to keep.

It’s refreshing to see someone with actual experience commenting about construction on HN, nice post!

Why can’t the feds do for construction corruption what Blumenthal and Giuliani did to organized crime in NYC.

The feds know it’s corrupt. Why can’t they go there and say all projects need to come through us and they ensure there is no monkey business going on with the contracts?

What makes you think the feds are any less corrupt?

The idea is that people on the outside are less likely to be locally corrupt.

Chinese dynasties did similar with their civil servants and Soviets practiced this in some areas to avoid this coziness that leads to corruption.

This was done for funneling corruption money away fom local elites to some other non-local elites.

The corruption stayed the same - it's a revenue center, why touch it.

If I were a developer in NYC and the feds said that, I would sue. constitutionally speaking, they don't have the power to say all building projects need to come through us.

Yes, construction contracts and rates are fueled by corruption. That said, I would only be OK with the feds going after the corruption. Not taking over construction. Do investigations. Trap people in stings. Do all the good old FBI tricks. I encourage that, but governmental takeover of all contracting is going too far.

The feds could say we won't contribute to a subway unless we actually build it.

Though as I said elsewhere, that just means in a few years the corrupt switch to how to deal with the feds. Much better for the feds to be an independent anti-corruption unit.

> Why can’t the feds do for construction corruption what Blumenthal and Giuliani did to organized crime in NYC.

Ha! When I read that line I completely missed the last letter in the word "organized", and it made perfect sense. I thought it was an historical quote from Guiliani's last job application.

Agreed that New York City is an outlier in a number of ways, but there does appear to be something interesting going on with regard to rising U.S. costs for a variety of things besides just construction (e.g., health care and education). Slate Star Codex did an interesting though definitely inconclusive piece on this in 2017: https://slatestarcodex.com/2017/02/09/considerations-on-cost...

michael franzese talks about this alot in various podcasts and interviews. it was true much more recently than 1910. the family isnt what it used to be, but its certainly not gone.

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