As the NYT article explains, the companies’ construction costs are driven by labor costs. The construction companies negotiate with the unions, and pass the higher labor costs onto the MTA, which does not negotiate directly with the unions.
Construction is a labor-intensive industry, and labor costs dominate. If you look up the public companies that do civil construction work, you’ll see that the profit margins are razor thin (2-5%). These are not companies like Facebook making 20-30% profit margins.
This is not a moral issue. It's not about evil construction company CEOs. Reducing executive pay at these companies wouldn't amount to a drop in the bucket for these multi-billion projects. Nor is it about evil union workers. We're just talking about hard-working folks who are getting paid a rather more comfortable wage than their counterparts in Europe. Which is good for them, but wrecks the economics of the MTA, an entity where payroll, health, and pension make up more than half of expenditures.
Construction is a labor-intensive industry, and labor costs dominate. If you look up the public companies that do civil construction work, you’ll see that the profit margins are razor thin (2-5%). These are not companies like Facebook making 20-30% profit margins.
This is not a moral issue. It's not about evil construction company CEOs. Reducing executive pay at these companies wouldn't amount to a drop in the bucket for these multi-billion projects. Nor is it about evil union workers. We're just talking about hard-working folks who are getting paid a rather more comfortable wage than their counterparts in Europe. Which is good for them, but wrecks the economics of the MTA, an entity where payroll, health, and pension make up more than half of expenditures.