Meme Weeding: Unions and Construction Costs

Lately I’ve seen some very aggressive people on social media assert that high American transit construction and operating costs are the fault of unions, and thus, the solution is to break the unions using the usual techniques of subterfuge and breaking implicit promises. A while back, maybe a year ago, I even saw someone argue that gadgetbahn (monorails, PRT, Hyperloop, etc.) is specifically a solution to union agreements covering traditional transit but not things that are marketed as new things. This is an incorrect analysis of the problem, and like many other incorrect analyses, the solutions that would follow were this analysis correct are in fact counterproductive.

American costs are high even without unions

The majority of American transit construction occurs in parts of the country with relatively strong unions. This is for historical reasons: American cities with large prewar cores are both more unionized and more densely populated than newer Sunbelt cities. Thus, a table with cities and their subway construction costs, such as what one might get cobbling together my posts, will show very high costs mostly in cities with American unions.

However, American cities with weak unions build transit too, it’s just unlikely to come with subway tunnels. We can look at above-ground urban rail construction costs in a variety of American states with right-to-work laws. There is one recent above-ground metro line in a right-to-work state, the Washington Silver Line in Virginia, and another proposal, an extension of MARTA. Let’s compare their costs with those of other mostly at-grade urban rail lines in unionized West Coast states:

We can go lower than this range by looking at street-running light rail lines, which are popular in such Sunbelt cities as Dallas, Houston, Phoenix, and Charlotte, but then we can compare them with light rail lines in Minneapolis, which has no right-to-work laws.

Let’s also look at commuter rail. Dallas’s Cotton Belt Line, a diesel line in a disused freight right-of-way, is projected to cost $1.1 billion for 42 km. The cost, $26 million per km, is within the normal European range for greenfield high-speed rail without tunnels, and more than an order of magnitude higher than some German examples from Hans-Joachim Zierke’s site. In Massachusetts, the plans for South Coast Rail cost around $3 billion for 77.6 km before some recent modifications cutting both cost and length, about $40 million per km; this would have included electrification and right-of-way construction through an environmentally sensitive area, since bypassed to cut costs.

Finally, what of operating costs? There, the Sunbelt is unambiguously cheaper than the Northeast, Chicago, and California – but only by virtue of lower market wages. The cost ranges for both sets of states are wide. In Chicago and San Francisco, the operating costs of rapid transit are not much higher than $5/car-km per the NTD, which is normal or if anything below average by first-world standards. Light rail looks more expensive to operate in old unionized cities, but only because Boston, Philadelphia, and San Francisco’s light rail lines are subway-surface lines with low average speeds, which are more expensive to run than the faster greenfield light rail lines built elsewhere in North America. The lowest operating costs on recently-built light rail lines in the US are in Salt Lake City, San Diego, and Denver, and among those only the first is in a right-to-work state.

Non-labor problems in American transit

I urge everyone to look at the above lists of American transit lines and their costs again, because it showcases something important: high American costs are not a uniform problem, but rather afflict some areas more than others. Commuter rail construction costs are the worst, casually going over European levels by a full order of magnitude or even more. Subway operating costs are the best, ranging from no premium at all in some cities (Chicago) to a factor-of-2 premium in others (New York). Light rail construction costs are in the middle. The variety of cost premiums suggests that there are other problems in play than just labor, which should hit everything to about the same extent.

When I’m asked to explain high American construction costs, I usually cite the following explanations:

  1. Poor contracting practices, which include selection of bidders based exclusively on cost, micromanagement making companies reluctant to do business with New York public works, and design-build contracts removing public oversight and encouraging private-sector micromanagement.
  2. Poor project management: Boston’s Green Line Extension is now budgeted at about $1 billion for 7.6 km, but this is on the heels of an aborted attempt from earlier this decade, driving up total money spent beyond $2 billion.
  3. Indifference to foreign practices: Americans at all levels, including transit agencies, shadow agencies like the Regional Plan Association, and government bodies do not know or care how things work in other countries, with the partial exception of Canada and the UK, which have very high costs as well. The area where there has been the greatest postwar innovation in non-English-speaking countries, namely commuter rail, is the one where the US is the farthest behind when it comes to cost control. Explanation #1 can be folded into this as well, since the insistences on cost + technical score bid selection and on separation of design and construction are Spanish innovations, uncommon and obscure in the English-speaking world.
  4. Overbuilding: extra infrastructure required by agency turf battles, extra construction impact required by same, and mined stations. Other than the mined stations, the general theme is poor coordination between different agencies, which once again is especially bad when commuter rail is involved for historical reasons, and which in addition to raising costs also leads to lower project benefits.

Labor is a factor, but evidently, the intransigent BART unions coexist with low operating costs, as do the Chicago L unions. American unions are indifferent to productivity more than actively hostile to it, and in some cases, i.e. bus reforms in New York, they’re even in favor of treatments that would encourage more people to ride public transit.

But union rules force transit agencies to overstaff, right?

In the Northeast, there are unambiguous examples of overstaffing. Brian Rosenthal’s article for the New York Times found horror stories, and upon followup, frequent commenter and Manhattan Institute fellow Connor Harris has found more systematic cases, comparing the ~25 people it takes to staff a tunnel-boring machine in New York with the 12 required in Germany. The unions themselves have pushed back against this narrative, but it appears to be a known problem in the infrastructure construction industry.

So what gives? In Texas, the unions are too weak to insist on any overstaffing. Texas is not New York or even California. Without knowing the details of what goes on in Texas, my suspicion is that there is an informal national standard emerging out of mid-20th century practices in the cities that were big then. I see this when it comes to decisions about construction techniques: features that came out of the machinations of interwar New York, like the full-length subway mezzanine, spread nationwide, raising the cost of digging station caverns. I would not be surprised to discover something similar when it comes to staffing. Obvious economies like running driver-only train are already widespread nearly everywhere in the US, New York being the exception. Less obvious economies concerning maintenance regimes are harder to implement without very detailed knowledge, which small upstart Sunbelt transit agencies are unlikely to have, and if they invite consultants or other experts, they will learn to work in the same manner as the big American transit agencies.

The reality that the entirety of the American transit industry is used to doing things a certain way means that there needs to be a public discussion about staffing levels. There are jobs that look superfluous but are in fact crucial, and jobs that are the opposite. The cloak-and-dagger mentality of anti-union consultants does not work in this context at all. Experimentation is impossible on a safety-critical system, and nothing should be changed without double- and triple-checking that it works smoothly.

Anti-union explanations are harmful, not neutral

While union overstaffing does drive up tunneling costs in the United States, there are many other factors in play, which must be solved by other means than union-busting. By itself, this would make union-busting either neutral or somewhat positive. However, in reality, the politics of union-busting wreck government effectiveness in ways that make the overall cost problem worse.

The people who try to tell me the problem is all about the unions are not, as one might expect, Manhattan Institute hacks. Connor himself knows better, and Nicole Gelinas has been making narrow arguments about pension cuts rather than calling for sweeping changes to leave unions in the dust. Rather, the loudest anti-union voices are people who either are in tech or would like to be, and like using the word “disruption” in every sentence. The Manhattan Institute is pretty open about its goals of union-busting and race-baiting; in contrast, the people who tell me gadgetbahn is necessary to avoid union agreements insist on never being public about anything.

The rub is that it’s not possible to solve the coordination problem of public transit agencies without some sort of public process. Adding gadgetbahn to the mix creates the same result as the XKCD strip about 14 competing standards. The more the people building it insist that they’re disruptive synergistic innovators inventing the future with skin in the game, the less likely they are to build something that’s likely to be backward-compatible with anything or cohere to form a usable network.

Nor is it possible to assimilate good industry practices by cloak and dagger politics. The universe of industry practices is vast and the universe of good practices isn’t much smaller. The only way forward is via an open academic or quasi-academic process of publication, open data, peer review, and replication. A single consultancy is unlikely to have all the answers, although with enough study it could disseminate considerable knowledge.

There needs to be widespread public understanding that the United States is behind and needs to import reforms to improve its transportation network. This can happen in parallel with a process that weakens unions or for that matter with a process that strengthens them, but in practice the subterfuge of managers looking for union-busting opportunities makes it difficult to attack all cost drivers at once. Whatever happens with conventional left-right politics, there is no room for people who reduce the entirety or even the majority of America’s transit cost problem to labor.


  1. TunnelVision

    As one of the people who was interviewed in depth by Brian Rosenthal for his piece on NY I would say that there is some truth in your comments. An interesting fact though is that the mined TBM tunnels in NY were not that excessive an outlier in terms of cost. The tunnels in Wueens were expensive but they were also high risk. I do think you have to be careful though about comparing project costs. Are you really comparing apples to apples.

    Also your point #1 is lazy journalism and #2 is also in that category. Federal funds in projects brings a whole new level of BS oversight, and as for PM and cost control well Crossrail is not exactly doing you a favor there. I would point you towards Flyvebjerg but I’m sure you already know most of his thoughts.

    And unfortunately the US is now in love with design build and PPP, and forgets the Carilion lessons. I see more problems on the horizon especially when talking to colleagues who work for Contractors..

    Anyhow, interesting article especially with regards to the non union cities.

    • Alon Levy

      Federal funds do not require using lowest-bid rules (California HSR doesn’t, it just assigned too low a weight to the technical score). It turns out that nor even New York state law requires this; agencies do it because they’re used to it, not because they’re compelled to.

      And the project management issue in Boston is something I’ve heard from MBTA insiders. Evidently, once the MBTA hired an experienced project manager and rebooted the project, the cost projection went from $3 billion to $1.1 billion plus sunk costs on the earlier attempt.

      Crossrail is indeed a really high-cost project (although the headline cost includes surface improvements). This is why I insist on learning from successful examples, which for the most part are not in English-speaking cities, rather than cribbing things from London the way the RPA did.

      • Jhonny

        How much of Crossrail’s cost can be explained by it being a project direly needed since England had a king and only built now?

        The infamously expensive second avenue subway had similar issues…

        And Leipzig City Tunnel (though I’m not sure where its comparative costs lie) was first built and abandoned during the Kaiserreich and opened with Angela Merkel as a guest of honor…

        Surely all of those would’ve been cheaper had they been built decades ago…

        • Alon Levy

          Leipzig City Tunnel looks like €266 million per km? Maybe a bit over 300 with inflation. Not great, but cheap by German S-Bahn standards (=Munich second tunnel, ugh).

          Crossrail is expensive partly because of project management mishaps and partly because it’s a genuinely difficult tunnel. It goes underneath the older Tube lines and has big stations that had to be mined, at half a billion pounds each. The RER A here, which wasn’t so delayed, was almost as expensive, what with having had to dig up the entirety of Les Halles, and remains the most expensive tunnel built outside an English-speaking country. Neither is anything like Second Avenue Subway, a vanilla subway extension under a wide street that could have been done with cut-and-cover stations.

          • Jhonny

            Had they built Crossrail fifty years earlier, would some of the subways now “in the way” already have existed?

          • Alon Levy

            All of them would have except the Jubilee line (opened 1979). The Victoria line opened 1968, and maybe it would’ve been possible to save money by doing the two projects together, but Crossrail crosses the Victoria line at the same place where it crosses the Bakerloo line, so the dig would’ve been complex either way.

      • Connor Harris

        >It turns out that not even New York state law requires [lowest-bid rules]; agencies do it because they’re used to it, not because they’re compelled to.

        As I understand it (from a civil engineer who gave me a somewhat garbled explanation of the legal aspects), though you’re right that the Invitation for Bids process allows consideration of technical merits, the de facto lowest-bid rule came about because, decades ago, some contractors who lost bids because of technical scoring threatened to sue. I’ve never been able to confirm this. (The other NYS process, Request for Proposals, is design-build and gives agencies nearly unbridled discretion; no wonder Cuomo is pushing for it.)

        • Alex B.

          This is a good point: part of the reason for taking the low bid is the cost and time penalty of defending an award against protests. The laws and regulations around the decision-making are in need of reform.

    • Michael James

      [I left this post sitting on my browser overnight. I see that Alon has partly said similar things.]

      I’m sure Crossrail is more expensive than it need be, but OTOH it shouldn’t be compared to any other ‘normal’ subway/Metro project. It is heavy-rail, is 120km long (and with branches), of which 42 km are new (giant) tunnels, and in central London it has to be very, very deep (because it must go under the Underground which is already very deep), 40 new stations, ten of which are in central London intricately squeezed in among ancient legacy structure (and so are mined and deep and hugely expensive). It also crosses the Thames many times (and has an amazing challenging watery passage in docklands).
      I don’t know how you go about trying to compare its cost. The most apt comparison is with the original construction of Paris RER-A and -B in 1977, and where the same complaints were made about extravagant costly structure. Today, perhaps compare it to the 55km westward extension of RER-E at about $5bn, however much of that is legacy (some is already RER, taking over parts of A, and ? C). Fairer would be to compare to the 8km deep tunnel section of E from St-Lazare to Nanterre-la-Folie (La Defense) but that has only 3 new stations–and I can’t find the cost of this segment alone.

      Initially I was critical of its cost but with time I now reckon it will be one of the best bits of value infrastructure London will have built in the past century (notwithstanding that, like RER, it should have been built half a century ago; in fact it was first planned shortly post-war but like everything in the UK was killed by austerity which strikes one as a peculiarly counterproductive means of war-recovery.) It is going to be a huge success (provided it ever opens:-) and will do some very heavy lifting (they say 10% of LU but I reckon more, given that RER-A carries 300m pa which is 20% of Paris-Metro). Now compare to Heathrow’s third runway and there you have a genuine British clusterfk at insane cost and absurd justification and (non-)planning. OTOH if they actually crash over the no-deal Brexit cliff, I imagine they will cancel it!

      As for Flyvbjerg, I can’t find anything of his to be very useful, except a bunch of yawn-worthy motherhood statements about “thorough front-end planning” and “rigorous cost-benefit analyses” etc. Doh! I suppose every field needs its gurus. He also lost me when he gave the Sydney Opera House and Eurotunnel, as examples of terrible projects (with huge cost overruns) that he seriously suggests should not have been built; he actually claims the UK economy would be bigger if it had never built Eurotunnel. He would have been one of those econocrats that wrung their hands criticizing the (expensive) construction of RER (except in his latest gigantic tome, there was barely a mention of French projects which I think is telling). Indeed he seems very Thatcherite in that in the end he just wouldn’t build much at all. And of course Flyvbjerg himself hasn’t built a wooden hut (sitting on government committees doesn’t count).

  2. Paludicola

    This is a very welcome post; the union staffing argument has become the most popular, but I never felt that it could be wholly adequate. It is an appealing argument, not just to those whose prejudice against union labor it gratifies, but because it suggest a relatively simple ‘hit it with a stick’ level solution of just cutting staff, regardless of what it would actually entail. Better project design and management practices seem less straightforward.

    Project conception and selection seem afflicted by a preference for construction-intensive, conceptually conservative ideas. Here in Philadelphia, the General Manager of SEPTA, who was formerly the head of its Engineering department, has a pet plan to increase capacity on the Market-Frankford Subway-Elevated by extending all of the platforms from ~330 feet (100.6 m) to ~ 440 feet (134.1m) long to accommodate 8-car, rather than 6-car, trains, which will also necessitate signaling system improvements the purchase of additional cars and facilities for them. This will accomplish an increase in capacity from 90 cars per hour (6 cars X 15 tph) to 120 cars per hour (8 cars x 15 tph) through tearing up large sections of Market Street in Center City and University City to lengthen the nine subway stations as well as potentially interfering with the parallel subway-surface trolley lines and perhaps some work at City Hall where the MFSE 15th Street Station and Broad Street Subway City Hall Station overlap underneath a small man-made mountain. It almost seems designed to either maximize contracting opportunities for engineering firms or to never actually happen. I really haven no idea of why undertaking the signaling system improvements and purchasing the additional cars to increase to service to 120 cars per hour by increasing frequencies to 20 tph, but foregoing the expensive, disruptive heavy construction is not, near as anybody can tell, considered an viable alternative by anybody but activists whom nobody listens to. (N.b. The MFSE ran at 20 tph in the recent past and probably higher frequencies at some point in its 113-year history) Maybe there’s some good reason that I haven’t thought of; nobody’s really talking about it.

    • Jhonny

      20 tph for a subway sounds eminently doable. Nuremberg does 36 (100 seconds headway) along the U2/U3 which allows them the luxury of running half length trains (they’re all driverless)

    • ckrueger99

      All of the above plus trains of existing length but higher passenger capacity: fewer seats can be done through refurb of existing rolling stock; continuous gangways requires new ones. Increasing passenger through-put on the MFL is the most important idea for increasing level of service by SEPTA, along with free transfers (which would make the Broad Street Line more useful, too).

    • Liam

      We shouldn’t even need to buy more trains to do 20 tph. There are 218 vehicles in the fleet, and the peak fleet requirement is 144 vehicles. That’s SEVENTY FOUR SPARES. A spare ratio greater than 50%, when 20% should suffice.

        • Paludicola

          A possible reason is that the M4 cars are not reliable enough for cars necessary for more frequent service to be consistently available. Page sixteen of the 2014-2019 SEPTA Strategic Plan* shows the mean distant between failures (MDBF) of the M4 cars as between 58,357 miles and 76,373 miles in the period from 2010 to 2014. For comparison, the BIV cars, despite being roughly fifteen years old, have an MDBFbetween 120,906 miles and 151,370 miles; they also operate at a much smaller spare ratio. (I doubt that the figures have changed much since) The plan has a goal that the BIV cars will have a slightly worse MDBF than their lowest reliablity from 2010-2014.


  3. Alon Levy

    A point I forgot to say in the main post: if the problem is poor management, as seems to be the case in New York, then it’s likely that rank-and-file labor has many good suggestions that the top brass ignores. It’s not too relevant to construction costs, but it’s very relevant to operating practices: for example, the subway slowdowns were decreed from above, while various low-level workers leaked the knowledge of the problems to me, Dan Rivoli, and Aaron Gordon. Even if union buy-in is not required, good working relationships with individual line workers become necessary in implementing reforms, which makes labor trust so much more important.

    • Alex B.

      I’d love to read more about why this level of trust doesn’t often occur in the US. I’m partial to the idea that the legal differences in how Unions can bargain is part of the reason.

      For example, take this bit from the Rosenthal article on NYC’s costs:

      “At the heart of the issue is the obscure way that construction costs are set in New York. Worker wages and labor conditions are determined through negotiations between the unions and the companies, none of whom have any incentive to control costs. The transit authority has made no attempt to intervene to contain the spending.”

      This is more than just ‘bad management,’ it’s a bad legal set-up.

      The key question: if everyone agrees that more efficient work is better for all (in theory), then what legal changes need to happen for how bargaining happens to make the efficient work happen?

      • Connor Harris

        A start would be simple transparency: other areas in the US also have conditions set by negotiations between unions and private contractors’ associations, but their contracts and wage schedules are posted online. (Here’s one for metro Detroit.) The GCANY’s contracts, by contrast, are under non-disclosure agreements; they’re not even FOILable, as they’re not technically public-sector agreements. The NYT got the sandhogs’ contract illegally; we know almost nothing beyond anecdotes about overstaffing by other workers, though my impression from talking to NYC civil engineers is that it’s probably comparably bad.

        I’d like to think that the construction unions would be OK with agreements lowering staffing levels per project in exchange for a ramp-up in capital expenditures so that their overall employment levels stay the same for a few years, but the MTA is so thoroughly broken that offering them that deal would be impossible. I’m not even sure they would take it; on the operations side, the TWU (so I’ve been told by some former MTA high-ups) has rejected even labor contracts that would leave current employees’ work rules in place, because they worry that any concession would set a precedent for layoffs.

  4. Jhonny

    If wages were the determining factor in construction costs, construction costs divided by wage should be about the same.

    And low wage areas/countries should have significantly lower construction costs.

    Afaik we see neither effect.

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  6. Eric

    What fraction of NYC subway construction costs goes to the TBM crew’s salaries? That should tell us whether the one verified example of union-driven overstaffing adds a significant amount to the total cost.

    • Alon Levy

      I don’t know, but remember that the TBM itself is the part with the lowest NYC premium over Paris; the biggest premiums are in overheads and in stations (link).

    • adirondacker12800

      20 excess sandhogs at half a million a year for wages, benefits, administrative and managerial costs is 10 million a year or 100 million over ten years. I don’t think the total cost rises to half a million a year.

  7. Connor Harris

    I don’t think we have any idea; not even the RPA is allowed to see data on labor costs (see print p. 24/PDF p. 26 here).

    I can try a very rough first-principles estimate, though let me emphasize I put basically zero stock in this. My favorite reference, Torsten Hahm’s chapter from Estimating in Heavy Construction, gives the wages and benefits for an underground TBM crew on a twin-bore river tunnel as ~$6000/day and a typical pace of TBM work as 170 days/route-km, for roughly $1 million/route-km total. According to Rosenthal, NYC has roughly 3.5 times the workers per TBM and three times the wages per TBM worker as Hahm says, so if tunneling speeds here are two-thirds what they are for Hahm (which I think is generous to NYC), NYC would pay ~$1 million * 3 * 3.5 * 1.5 = ~$16 million/route-km. This doesn’t sound like much, but it would be enough to raise the total cost of Hahm’s example tunnel by a third.

    The best NYC-area analogy to Hahm’s tunnel is probably the Hudson tunnel in Gateway, whose cost estimate is even more egregious than East Side Access given the simplicity of the project (unsurprisingly, the Port Authority is involved). The complexity of ESA tunneling means that the TBM-staff premium is almost certainly several times higher than $15 million/route-km.

    • Michael James

      There may well be overmanning but by far the biggest type is not at the manual worker level, it’s the profusion of grotesquely paid consultants and executives etc.
      Here are my selected takeouts (verbatim, except […] and emphasis is mine) from Rosenthal:

      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.
      By BRIAN M. ROSENTHAL, DEC. 28, 2017

      And The Times observed construction on site in Paris, which is building a project similar to the Second Avenue subway at one-sixth the cost. … In Paris, which has famously powerful unions, the review found the lower costs were the result of efficient staffing, fierce vendor competition and scant use of consultants.
      The extension of the 14 Line in Paris, for example, was very similar to the Second Avenue subway project in length, depth, soil type, environmental issues and regulations, but it cost just $450 million per track mile. [€247 per km][versus $3.5bn per track mile of SAS]
      Tim Gilchrist, a transportation adviser to Govs. Eliot L. Spitzer and David A. Paterson, noted all costs are passed on to the M.T.A. “Nobody at the negotiating table is footing the bill,” he said.
      Critics pointed out that construction companies actually have an incentive to maximize costs — they earn a percentage of the project’s costs as profit, so the higher the cost, the bigger their profit.
      Consulting firms, which have hired away scores of M.T.A. employees, have persuaded the authority to spend an unusual amount on design and management, statistics indicate. Public officials, mired in bureaucracy, have not acted to curb the costs.
      A Times analysis of the 25 M.T.A. agency presidents who have left over the past two decades found that at least 18 of them became consultants or went to work for authority contractors, including many who have worked on expansion projects.
      Soft costs for East Side Access are expected to exceed $2 billion. The project plan called for the hiring of 500 consultants from a dozen different companies, according to a 2009 federal oversight report.
      Both the Second Avenue subway and East Side Access projects hired the same main engineering firm: WSP USA, formerly known as Parsons Brinckerhoff. The firm, which designed some of New York’s original subway, has donated hundreds of thousands to politicians in recent years, and has hired so many transit officials that some in the system refer to it as “the M.T.A. retirement home.”
      The firm was the only vendor to bid on the engineering contract for the Second Avenue subway, records show. On East Side Access, it is sharing the contract with STV Inc., which recently hired the former M.T.A. chairman Thomas F. Prendergast. The contract was initially for $140 million, but it has grown to $481 million. [a 340% increase]

  8. Adam

    Thanks for this!

    You’ve harped frequently on Cut and cover, but having lived for several years a mile from a Los Angeles’ Purple Line extension station, my experience is that Utility relocation (for just the fraction of a kilometer a station box and crossover might entail) takes between three years and six years to complete.

    And it’s also the worst part of the construction and the second most disruptive part of the construction (the most disruptive part of the construction is the jet grouting, by an enormous margin), and the actual excavation of the station palaces is not that disruptive, comparatively to the twin hells of utility relocation and cross passageway jet grouting.

    so my question is, that if cut and cover was employed for an entire line, would that necessitate utility relocation for the entire line as well? Wouldn’t such a massive expansion of utility relocation massively increase the costs, massively increase the disruption and massively increase the timeline of any subway construction? To the point where any cost and time advantages from cut and cover would be more than overran by the utility problems (and attendant risks)?

    • Jhonny

      Many cities try to “rip open streets only once”

      So utilities are NOT just related but also replaced/updated. And while they’re at it they also put in new internet cables and bike lanes and whatnot…

  9. R. W. Rynerson

    Regarding Denver LRT I can’t comment about construction costs or maintenance costs, except to note that the staff who set those parts of the program up came from other LRT systems or from bus projects. I worked in Service Planning & Scheduling and can offer some reasons for lower operating costs.

    1. In the 1920’s, the Denver Tramway Company broke the union in a violent strike and the ATU did not get back in till after WWII. The labor agreement is fair, but does not have some of the crazy work rules that encrust longer-established contracts. Minor items are taken care of with memos, rather than getting into the agreement.

    2. We original staff members and our successors have been very aware of the economics of running an electric railway. The service is designed to get good work out of good workers. An important point is that we can run four-car trains to avoid adding peak trippers. There are some things that get criticized: Denver runs a long service day out into the suburbs. This results in lower load factors and more car-mile expenses while it makes a more efficient runcut and use of the infrastructure and power supply. The long service days and staying on base clock patterns through the peak also make for better bus connections. These are system differences that require more analysis when trying to make peer comparisons, but I suspect that Salt Lake City and San Diego have similar efficiencies.

    3. Regarding acceptance of foreign ideas, we’ve used other countries’ ideas, software, hardware and rolling stock for the Denver bus and rail networks. This openness always amazed me, given its cowtown reputation in 1985 when I arrived from Portland via Edmonton. The only colleagues dragging their feet usually turned out to be transplants from the Rust Belt.

    • Jhonny

      I think running service layer in the day can cause a long term shift towards public transit as suburbanites can still get home from layer outings.

      Back in the day of privately run streetcars in Germany they had “Theaterwagen” which would wait outside the theater until the last show of the evening let out to get a well paying clientele home. They wouldn’t have done it if it weren’t sound business.

      I think the comparatively higher car ownership in and around Nuremberg compared to Dresden is in part due to Dresden running nicht trams and Nuremberg only running night buses on weekends

      • R. W. Rynerson

        I remember a suburban bus line from my Army days in the FRG that held its last trip for symphony patrons,

        An added note to my comments about service spans: Denver has reduced late night service in the last couple of years, due to the operator shortage and requests for more windows for maintenance and for fewer car-miles. Early morning service catering to non-CBD work trips continues. It’ll be interesting to see how this affects ridership and productivity. Operating unit costs may also increase due to the effects of route extensions, which make runcutting more costly.

        • Bjorn

          The rail deadheads to and from the rail yards to the R line, and to a lesser extent the E/F lines, must chew up a bunch of hours, work time, and increase costs. The resultant 3 am report times for train operators in order to start revenue service at a reasonable hour likely aren’t popular either.

          When FasTracks was planned, were there ever plans for a yard in a location more convenient to these lines?

          • R. W. Rynerson

            Deadheads and road reliefs to the E/F/H and what is now the R-Line were discussed extensively, but operating costs are never as newsworthy up front as are infrastructure capital costs. Also, there are some efficiencies in runcutting and supervision to have fewer operating divisions. The small yard at Peoria Station and the siding at 13th Avenue are gestures toward operating concerns. A problem that capital project planners had was that local governments did not want a railyard in their suburb.

            A yard was planned at Harlan Street on the W-Line, but it would have been costly to mitigate flooding in that site.

            The early pull-outs also end the workday earlier. My father-in-law was an Edmonton streetcar and bus operator who liked being off in the afternoon. Most of the complaints about the long Denver deadheads that I heard came from extra board operators working at night. They couldn’t work the next morning due to inadequate rest time. (And that’s why bar-closing service is easier to offer on Friday and Saturday nights — there are later morning pull-outs on weekends.)

          • Jhonny

            Did Denver get state or federal money for its construction of light rail?

            If capital and operating costs are funded through different pockets, you sometimes get “interesting” decisions of how to allocate either…

    • Max Wyss

      Evening/night service is fundamental for transit to become a viable transportation option (on one side) and for the city to become a viable place to live (on the other side).

      I think it is a question of base attitude… active and reactive. Denver is obviously active (looking where needs can be induced, in the sense “we are there, they will come”), other cities are reactive (looking what are current needs, and then (barely) fulfilling them).

      Of course, there are some risks involved being active, so a “cover my butt at all means” attitude will barely get reactive right.

      • Jhonny

        24/7 service with a subway is also nigh impossible (quadruple tracking makes it doable, but is hardly worth the cost in most cases) and most north American cities have no hint of a clue of how to run buses and surface rail right.

  10. Arisrules

    I’m a bit confused by the tenor of this post. If I am reading this post right for New York, union costs and practices are more expensive than many other countries, but other issues (horrible management, consultants, overbuilding, etc) are bigger issues for why our construction costs are so high, right?

    I think that is true from everything we’ve seen reported. In New York though, the unions are an integral part of the “transit industrial complex” and in bed with many of these other players. Additionally, as you’ve posted before, New York railroads operate inefficiently and are much more expensive than other countries. Again, unions do contribute to that.

  11. Adam

    @ Connor, $6,000 per day? really? That seems incredibly low. TBM workers are on a twelve-hour guarantee contract, meaning the TBM is in mining operations for 60 of the 168 hours of a week, so the twenty miners operating the machine always work 60 hours a week (and the machinery sits “idle” for 108 hours per week, but a lot of routine maintenance is done by the night crew daily). That means each week of pay consists of 40 hours of regular time and 20 hours of overtime at time-and-a-half. in other words, multiply the hourly rate of pay by 14 to get the day rate, or multiply the hourly rate by 70 to get the weekly rate.

    At a mere $50 per hour, that is $700 per worker, or $3,500 per week per worker. With a twenty person TBM crew that is $14,000 per day in labor mining costs, or $70,000 per week.

    but $50 per hour is probably pretty low, some workers might be making that little, but highly prized employees like drivers are probably making more like $100/hr, so the above cost of $14,000 per day is probably a lower bound.

    And these are pure labor costs with no additional, risk premiums, night premiums, health care contributions or pension contributions.

    You’re probably looking at a lower bound of $100,000 per week to operate a TBM in America.

    At a rate of 15 meters per day, or 75 meters per week, you’re looking at 14 weeks per kilometer of mining, or $1,400,000 per kilometer of tunnel.

    Even if every worker is making $100 / hr that’s still only $3M per kilometer, or $6M per kilometer if you’re doing simultaneous dual bore.

    considering, the costs of subway are measured in hundreds of millions per kilometer, that is a pretty fair indication that it is not union wages driving the costs of subway construction, as Alon has said!

    btw, on a 60 hour guarantee with a $50/hour wage, that is earnings of $182,000 per annum per worker in base wages. Pretty good pay!

    To me one of the big wastes of Tunneling is the 108 hours of idle time per week, maintenance can probably be handled in 40 hours, so why aren’t we tunneling in some of the other 68?

    a big part is the cost escalation, most good unions are going to have a sixth day be all twelve hours at time and half or all twelve hours at double time, and or they have severe labor cost penalties for not providing 24-48 hours of rest weekly. so you can’t just add workdays, it’s not cost effective, you have to have a longer schedule.

    but what if you had creative scheduling, and got the union to agree?

    Four mining crews per TBM, crews A & B are on staggered 8 hour shifts for four days, and crews C & D are on staggered 8 hour shifts for the next four days, you get four days on and four days off every week.

    This is hell on family scheduling so you have to offer incentives, so make it a ten hour a day guarantee, but only have them work eight hours, so they’re only working 32 hours per week (nice perk!) but are getting paid an extra eight hours of time and a half. That means, the hourly rate times 44, or $2200 per week per worker.

    Obviously, that is enormous pay cut from 3500/week, so you have to offer incentives there too, offer 20* premiums to both crews to compensate for the lost pay, now we’re up to $2640 / week per worker. At 80 workers (20 per A, B, C and D shifts) that’s $211,200 / week, lets round it up to $275,000 for fringe.

Why would the union do this? Because now they’re getting 4,800 hours worth of pension and health care contributions every week instead of merely 1,200.

    This means scheduling a TBM to mine seven days a week, or 112 hours a week, rather than 60. And the cost difference would be $275,000 per week vs $100,000 per week.

    That’s functionally a $75,000 premium per week to nearly double your machine’s output, versus tacking on an extra week at the end of the schedule. But we’re mining a lot more now, is it really that much a premium?

    At a rate of 1.25 meters per hour, that’s 20 meters per day and 140 meters per week, an even 50 days to mine one kilometer of tunnel, (7 weeks one day)

    At 7.14 weeks per kilometer, you’re looking at a labor cost of $1.96M per km versus a cost of $1.4M to do it traditionally in 14 weeks.

    That’s a mere half a million cost premium to do it twice as fast (with four times the workers) pretty good bargain.

    When you’re looking at upcoming California tunneling projects like the HSR longest continual tunnel reach 37 kilometers (6-7 years of tunneling at 60 hours per week) such a creative scheduling would yield truly massive dividends.

    • Alon Levy

      It sounds like there’s a significant difference between German continuous operation and American 60 hours/week operation. It’s probably a bigger deal than the pay differential? Hell, it might even explain some of the pay differential, if German standards are less dangerous for workers or more automated, so that they don’t have to pay lawyer wages to attract enough workers to a semi-skilled job.

      • Jhonny

        There used to be a “rule of thumb” of one million Mark meaning one dead person on a building project. Those days are largely over.

        The old Gotthard Tunnel had more workers die than the double that length base tunnel

  12. Alex Mazuretsky (@mazuretsky)

    On the other hand, the demand for transportation is not fixed. As a result, additional public transport may spawn new traffic, not merely replacing motorised trips. If you have successfully attracted 1,000 trips by public transport you have not necessarily displaced a thousand car trips, it is likely that you have displaced far less. This is surely not an argument not to build transit, but there’s only so far you can go without actively discouraging car use

  13. John Thacker

    Doesn’t Davis-Bacon and prevailing wage rates tend to apply in even right to work states on these projects, because of federal funding? That is true in the case of the Virginia Beach light rail extension. Virginia Beach complained that it raised their labor costs.

    Certainly agree that unions are nowhere close to the main issue (and even to the degree that both union and non union labor costs are a problem, it’s more about featherbedding, excessive number of people at low productivity rather than wages per se.) But the reality is that on at least the major projects with federal funding they pay something that is supposed to be union wages even in RTW states.

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  15. Davis Bacon

    This is a rather incomplete article. Yes, the anecdotes presented support the premise. But there is a complete glossing over the effects of the actual law in the US. I would bet that virtually all projects and services that you mention receive some Federal Funding which makes them subject to to Federal law – particularly prevailing wage laws. Prevailing wage laws add another layer of red tape and incentivize the usage of Union labor to help cut through the red tape. (The Unions have incentives to help show that the wages paid are prevailing wages.) So, even projects in Right to Work states will often hire Union workers.

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