Better worker safety certainly accounts for some increase in costs. But US infrastructure costs aren't only high compared to the past, they're high compared to other modern developed countries. I don't think Spain, for example, is keeping their costs relatively low by treating their construction workers as cannon-fodder.
Most of the cost in infrastructure is actually caused by too many regulations in countries such as the US. It is estimated that current regulations increase the costs by a factor of 6-7.
When you look at Barcelona an how they build there it is obvious that they (currently or at least in the recent past) do not have that problem.
That's also one of the reasons why the Chinese can complete a large infrastructure project like a skyscraper in a few months while we need half a decade for the same task.
But how do you know that it is a simple trade off between money and safety standards? It's been noted on HN that the US seems particularly bad at large infrastructure projects compared to other developed countries and I'm struggling to believe that's because the US has wildly better safety standards.
I tend to think it's lack of competition. The industries that do best in the US are ones that foreign competitors have the easiest ability to compete in. Construction is almost inherently a domestic affair. With efficiencies gained in more competitive the money saved has to go somewhere so it gets spent on construction.
Of course a problem with this is that I don't think all forms of infrastructure spending of gone up in price - look at housing; per square foot I don't think the cost has gone up that much.
Maintaining things is not necessarily less costly or even viable, compared to building things.
Also, labor costs have gone up dramatically due to a variety of factors. Increased safety standards, less supply of labor relative to demand, increased liabilities due to tort laws, etc.
Also, borrowing from the future to build today is easy when population is exploding and you know everyone is having 3+ kids which will expand the tax base. That has not been true for quite a few decades now, with tax bases declining in many areas and political appetite for subsidizing those areas is waning, in my opinion.
Less future growth means more restrained borrowing today. There is also a significant and increasing amount of the country’s resources being spent on keeping old people alive that was not the case when all the old infrastructure was built.
Demographics + relative labor costs account for infrastructure's cost suddenly rising in the developed world. "Baumol's Cost Disease" plays some role, but I believe a full narrative is in order.
With a rapidly rising population and high immigration, the early 20th century US had a pool of cheap labor at the ready. The "cost/benefit of a life" was assumed lower because mortality was higher, i.e. assumed optimal societal use was to break a body with labor before disease took them. Grooming them for the professions would be a waste. Cities were relatively smaller but more crowded, with lower standards of living.
This changed by mid-century. Mortality was now down to historic lows which made the post-war baby boom have a uniquely lasting impact. A generation with expectations of long life now faces the prospect of "retiring well", which pushes them to focus on education and career and demand higher margins of safety in their everyday lives. This creates an inflection in the early 1970's - the same one everyone has remarked upon in finance, culture, and politics - as the boom generation reaches working age and floods into the markets, looking for jobs and assets. This allows the suburbs to continue to boom: the marginal cost of adding another subdivision is low, and the technical foundation is established.
Then fast forward 30 years, and you have a new large generation of working age, but the world isn't being built out to accommodate them. Cities have gone from disinvested to overpriced. The trades are now in neglect because of a new bias towards academics. They graduate into job and asset markets that are locked up by older cohorts who enjoy the benefits of still being alive and able to work at advanced age. This is the Millennial's dilemma: They have been groomed for jobs they can't access, and there's no war or other crisis that would let them be utilized. Infrastructure is something they could work on, but the political system biases towards pleasing earlier cohorts, who will interfere with any change to the arrangement, which they are now fully invested in (in all senses of the word). The costs of changing anything spiral out of control, the politics compounded by the fact that there's been a lot of productivity improvement in information and finance, but little in physical assets. If 20 guys slinging code contain more speculative value than 20 guys swinging hammers, you'll see a lot of investment in code and not hammers - and that gives you cost disease. The high price of infrastructure is in part reflective of an uncorrected disinterest. It's irrational exuberance, but the other way around: nobody wants to pay for quality when there is "something better to do," so every project that needs it is a special case deserving a high price tag.
Thus, deferred maintenance becomes the norm and stays that way until - just recently - mortality finally starts taking its course, the grip of the Boomers starts to slip, and the bills come due. The "Great Resignation" is in large part a reshuffling of jobs and assets preceded by the demographic changes and then catalyzed by the pandemic crisis, which is going to change the infrastructure investment climate towards a new equilibrium going forwards - even though the Biden infrastructure package has been cut, the trend of disinvestment has reversed.
There is a lot of interest in the future of construction right now, and in new technologies that don't just change the products, but also make construction jobs better, safer, and more productive - e.g. two people building a house rather than a crew of 10. And there is a market that will still likely bias suburban, but is ready to see a slightly denser built environment with lower car dependency. Our ideal goal is "denser yet less crowded" - crowds are a combination of people needing to travel to destinations (suddenly in decline with WFH) and the travel being space-and-time inefficient(big cars travelling long distances versus short walks). Do some "road diets", allow some fourplex lots and ADUs, and install some walkable retail - and you'll have the suburbs of the future.
Costs are higher throughout the entire US for infrastructure projects. The US routinely pays an order of magnitude more per mile for similarly scoped projects compared to countries like Spain.
The root cause appears to be in the unique way projects are bid on in the US, where details need to be laid out in excruciating detail ahead of time and then any unplanned changes are cause for cost padding.
It's more expensive everywhere than it used to be, but the construction cost inflation is vastly greater in the US than in other developed countries. Construction is getting less efficient over time.
Labor costs rarely make it into the double digits when it comes to percent of total costs of large infrastructure projects. And even if they were, that wouldn't explain the discrepancy. The infrastructure construction costs in very first-world Western Europe are closer to the costs found in India than they are to the costs found in the US.
Wages are high. Infrastructure costs more to build in this country than it ever has before because of labor shortages in the trades. There are literally only a handful of companies in the country who can do things like construct a light rail line, something that used to be routine a century ago.
For new infrastructure specifically, it costs a ton in the US because of a combination of non-transparent bidding system from contractors (politicians give their buddies bloated contracts) and construction unions overstaffing construction sites.
In other words, taxpayer money is being taken for a ride. For a good example of the latter situation, look up the rampant overtime abuse that's been discovered at the LIRR. There's little incentive to keep costs down and use funds efficiently, because it's tax payer money.
I kinda agree with you that we should rethink the cost of infrastructure projects in the US relative to European countries. But I find the China and India comparisons disingenuous. Construction is cheap in those countries because human labor there lives at the edge. Construction laborers in America have a standard of living that rivals that of the top 5% of Indians. They are commensurately more expensive. That's a good thing.
The west’s engineering skills are not in decline, though if you have a metric that indicates that, it would be interesting. Europe has not had USA-level problems with building a popular rail network, or other major works.
The main differences in costs and time from 150 years ago are:
(A) Accounting for Extrinsic Costs. as the nations have become more dense and more democratic, peoples voices need to be heard. Environmental, wildlife habitat, etc. are complex issues that have only become important in recent decades. People sometimes get tempted by authoritarian rule because they “get shit done cheaply”, but this is a ruse. By not engaging openly, there are often massive extrinsic costs, so the project is “cheap” by cheating and not counting the true costs. Europe seems to have streamlined this, the USA is still stuck in “might over right” political power struggles rather than compromises.
(B) Cheap labor. Most infrastructure doesn’t require large numbers of high skilled labor, it needs a mix of skilled and unskilled labor. The railways in the 1800s we’re built with large quantities of immigrant labor. This is in rarer supply in the West these days, for a variety of reasons.
(C) Labor rights and safety. Construction projects and rail projects were happy to bury dead workers by the wayside (or in the concrete of the Empire State Building). Or work them to unsustainable hours with limited pay. It took many strikes, some violent, to sort this out. Today’s standards don’t put up with that level of labor abuse.
(D) Investment sources. Many large projects were state funded, or were funded by investors with a lot of patience. That kind of patience is in short supply, as is state funding in the USA due to Republicans being Republicans. Europe seems to be able to pull this kind of funding off.
(E) Contract Grift. There is a lot more incentive and skill to slow roll and milk the cash flow of construction projects, given their complexity. Traditional large works were more vertically integrated and managed by those with incentive to see the job done, rather than paid by the hour. The solution to this is more vertical integration but that’s hard to pull off because of labor shortages.
I’d also note that China has a vested interest in publishing propaganda about its engineering and public works prowess while hiding its extrinsic costs.
It's an important topic, yet unsexy for the general public, which is why it needs more attention.
Cost just seem to slowly ratchet up in the US, with each piece of the process/org taking their little chunk of $. I'm sure rising standard of living is part of it, risk aversion, outsourcing public infrastructure capabilities (and responsibility) to private contractors. Add to it also the important topic that we've fallen out of practice (as a country) of having large numbers of people who are capable of working on these kinds of infrastructure -- so it gets more expensive to find them.
It's a big loss. We could have 2x or 3x the new infrastructure we do, if it didn't cost so much.
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