The U.S. Has Forgotten How to Do Infrastructure

["Dave Farber" <farber () gmail com>]

Begin forwarded message:

> From: Dewayne Hendricks <dewayne () warpspeed com>
> Date: June 1, 2017 at 7:08:54 AM EDT
> To: Multiple recipients of Dewayne-Net <dewayne-net () warpspeed com>
> Subject: [Dewayne-Net] The U.S. Has Forgotten How to Do Infrastructure
> Reply-To: dewayne-net () warpspeed com
>
> [Note:  This item comes from friend Mike Cheponis.  DLH]
>
> The U.S. Has Forgotten How to Do Infrastructure
> The nation once built things fast and cheaply. Now experts are puzzled why costs are higher and projects take longer 
> than in other countries.
> By Noah Smith
> May 31 2017
> <https://www.bloomberg.com/view/articles/2017-05-31/the-u-s-has-forgotten-how-to-do-infrastructure>
>
> As Vox’s Matthew Yglesias points out, the problem with high infrastructure costs is that they force us to debate the 
> wrong things. If costs were reasonable, even skeptics would probably agree to fix roads and build better trains. But 
> when the price of maintaining high-quality infrastructure is ridiculously high, the issue gets divided into two camps 
> -- a pro-building contingent that advocates biting the bullet and overspending to maintain transportation networks, 
> and an anti-building group that throws up its hands at the price tag. When this is the debate, the country loses 
> either way, because it ends up either spending too much money or living with potholed roads and trains that never 
> arrive.
>
> The U.S. is in the grips of exactly this sort of dilemma. For some mysterious reason, the same mile of road or train 
> track costs a lot more to build in the U.S. than in other rich countries like France or Japan. When it comes to 
> trains, the disparity is particularly egregious. During the past few years, people who pay attention to this problem 
> have catalogued a list of potential culprits. But none of these is really satisfying.
>
> One popular villain is union labor. The Davis-Bacon Act, passed in 1931, mandates that infrastructure workers get 
> paid locally prevailing wages, which usually means the wages that union members would receive. Some studies have 
> claimed that this law and other union-friendly policies drive up costs in the U.S.
>
> But unions probably don’t help explain the yawning gap between the U.S. and other rich countries. The reason is that 
> places like France have some of the strongestunions in the world. Strikes by rail workers are commonplace. Yet 
> France’s trains cost much less.
>
> Japan is another counterexample. The median salary for a Japanese construction worker in 2014 was about 4 million yen 
> a year, which at current exchange rates is roughly $36,000. Construction workers in the U.S. make about the same -- 
> an average of $37,890 in 2016. Now, it’s possible that the average Japanese worker is capable of building much more 
> in an hour than the average American worker, meaning U.S. laborers could still be overpaid in the relative sense. But 
> it seems unlikely that the difference is that huge. The numbers are pretty clear -- high wages aren’t the big culprit 
> in U.S. costs.
>
> Another bogeyman is land-acquisition costs. People think of China’s authoritarian government forcing millions of 
> people to move in order to build dams and highways, and assume this must be why it can get things done so much more 
> cheaply than in the democratic U.S.
>
> But this is also probably a red herring. As transit blogger Alon Levy notes, land-acquisition costs are much higher 
> in Japan, where eminent domain laws are weaker. So much for the U.S. being the land of property rights! And yet, 
> somehow, Japan still lays train track much more cheaply.
>
> [snip]
>
> Dewayne-Net RSS Feed: <http://dewaynenet.wordpress.com/feed/>



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