What Went Wrong With Second Avenue Subway Construction? The MTA Doesn’t Want You to Know.

The MTA won't hand over contractor evaluations to the Times. The Times should sue.

The MTA doesn’t want you to know what's behind these numbers. Image: RPA
The MTA doesn’t want you to know what's behind these numbers. Image: RPA

MTA capital construction costs are higher than those of any other comparable transit system on the planet. Upgrading the subway system and building expansion projects hinges on wresting these exorbitant costs under control.

At the end of last year, the Times published an expose by Brian Rosenthal detailing the sources of MTA construction bloat — the no-show jobs, poor oversight of contracting, and lavish spending on consultants that enrich favored firms while depriving New York of the transit system it needs.

While MTA board members are making noise about better contracting, and reporters continue to connect the dots between Governor Cuomo’s campaign donors and his mismanagement of the MTA, not much has changed since Rosenthal’s story dropped.

An agency that spent a world-beating $1.3 billion per mile to build the Second Avenue Subway might want to enlist all the help it can get to bring costs down. But that’s not how the MTA operates. When the New York Times filed a freedom of information request for Second Avenue Subway contractor evaluations, the MTA declined:

What makes the MTA’s refusal all the more galling is that even if you accept the excuse about “opinions and evaluations,” the agency should have released the documents with redactions, instead of hiding them all.

“They’re flouting law,” Rosenthal tweeted, “which allows withholding a record only if it’ll impair an imminent contract award.”

Hopefully the Times takes the MTA to court, where the agency may delay but won’t be able to keep these documents out of public view forever.

  • Joe R.

    The problem as I see it is that the MTA/NYC/NYS are insular. They have a bunch of requirements for contractors which essentially restrict them to a handful of companies, all of which likely have strong political connections. It’s time to put the bidding process on the world stage, with the only qualification being whether or not a given company is capable of handling a project. My guess is we can get subways built for 10% to 20% of what it costs now if we try this. It’s not up to NYC, NYS, or the MTA to worry about whatever internal arrangements a company has with its workers, suppliers, etc. If a company pays their workers with a bowl of rice that’s their business. Lowest bid gets the job. If the end result doesn’t meet requirements they either get no or partial payment. And absolutely no cost overruns. If you bid too low to get the job you foot the bill for any extra expenses.

  • dfiler

    Right, that way we will always be able to take advantage of destitute laborers from somewhere in the world. We wouldn’t want to pass up cheap labor from war or famine refuge camps. Clearly we should be taking advantage of starving people whenever possible.

  • Joe R.

    My point is that it’s not the place of the MTA/NYC/NYS to dictate pay or staffing or employment terms of their contractors. Chances are great the skilled labor needed to build subways will be well compensated by the standards of their country, regardless of country of origin, but those terms of compensation should be dictated only by the free market. Despite my comment, nobody will really be working for a bowl of rice. Note that the average wage in China around $5,000. So sure, Chinese construction workers building a subway here may not even be making the American minimum wage, but they will likely be far better compensated than the average worker in China.

    BTW, if you have any food deliveries you’re already taking advantage of starving people. Undocumented workers in these restaurants often only get paid a few dollars an hour.

  • dfiler

    So you’re saying we should take advantage of child labor, convict labor, etc. Got it.

  • Joe R.

    Just stop! You’re putting words in my mouth. Again, I’m simply saying the world free market is what should dictate the cost of these projects. There’s a reason projects here cost 10 times what they do elsewhere, and that reason is silly requirements which result in both bloated staffing and pay which is many multiples of even American averages, never mind world averages. Remove these requirements and put the bidding on the world stage.

    The irony of your comment is they build these projects much cheaper even in Europe where labor costs more than here. The difference is in Europe they use automation to the maximum extent possible so as to reduce staffing requirements. The MTA’s contractors aren’t even allowed to do that. Heck, the MTA itself can’t even do that. In theory once we go with CBTC we can get rid of train operators and conductors but the union won’t have it. This is the heart of the problem. You can’t run an organization efficiently if you can’t use your labor efficiently.

  • dfiler

    The replies were criticism of turning a blind eye to how workers are treated, not a defense of the MTA’s poor management or cost overruns.

  • Joe R.

    Yes, but you’re assuming if we put bids out on a world stage the workers will be ill-treated. I highly doubt that would be the case with a job where working conditions will be highly visible. It’s the sweatshops in Third World countries where most labor exploitation occurs.

  • dfiler

    You said: “It’s not up to NYC, NYS, or the MTA to worry about whatever internal
    arrangements a company has with its workers, suppliers, etc. … If a company pays
    their workers with a bowl of rice that’s their business.”

    These replies were just rebutting your assertion that we should ignore the labor practices of companies doing governmental work. That’s not how we should get subway cost overruns in check.

  • Joe R.

    Not ignore, just don’t micromanage. Obviously if a company is beating its workers with a stick or has extremely unsafe working conditions that’s something we shouldn’t allow. However, it’s not up to us to dictate staffing levels, require unnecessary personnel, or tell a company how much it needs to pay its workers. I’m especially adamant on the last point. I personally feel we shouldn’t even have a minimum wage for US workers. The end result of a minimum wage is higher unemployment. It’s an idea with good intentions but bad results in practice. I’m not the only one who feels that way:

    http://www.valuesandcapitalism.com/minimum-wage-good-intentions-bad-policy/

    https://www.epionline.org/oped/heres-why-a-higher-minimum-wage-is-a-bad-idea/

    https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?noredirect=on&utm_term=.d79c19e78498

    A minimum wage ironically hits low-skilled workers the hardest of all even though it’s them it seeks to protect. Look at the recent push for a $15 minimum wage, for example. Higher wages just encourage companies to look into ways to make labor more productive, which means they need fewer workers, or to replace them altogether with automation. While the remaining jobs may be “better” from the standpoint of providing a livable wage, that’s little comfort to those who end with with no job for the reasons I mentioned.

    A better way to raise average wages is to more heavily tax corporate profits and high executive salaries. Faced with a choice of taking the money out in profits (and paying most of it in taxes), or investing in the company by paying workers more, most CEOs will do the latter.

  • Right! property construction is now higher than before.

  • neroden

    Even in China subway construction workers are very well treated — it’s highly skilled labor.

  • neroden

    It’s actually documented by controlled studies that higher minimum wages *increase* employment up to a certain point. Basically, if you have no minimum wage, companies will sort of organize in a cartel to hold wages down.

    And then workers will go “I can’t even make enough to eat from those jobs, so I guess I’m not going to buy anything”, and then with no customers, businesses hire fewer people…

    Henry Ford understood this: he paid his workers enough to buy a Ford. But most corporate owners are much stupider than this and will pay their workers so poorly that the workers can’t buy their product, unless they’re forced to bring the wages up to a bare minimum.

    We’re talking the difference between you-can’t-live-on-it wages and liveable wages.

    $15/hr is a perfectly reasonable minimum wage. Studies show that you would not want a $25/hr minimum wage, that probably actually would reduce employment.

    (In case you’re curious, the most interesting studies are of towns which cross state borders where one side had a lower minimum wage and the other had a higher minimum wage — both numbers quite low. All the businesses moved to the side with the HIGHER minimum wage. Empirical fact, happened repeatedly.)

  • Joe R.

    The upside of a higher minimum wage is you get better quality workers to start with, worker productivity is likely to be higher, and turnover is going to be lower. That saves a business money.

    I’m on the fence though about a $15 minimum wage in most of the country. Maybe in expensive cities with a talented labor pool it makes sense. For most of the country maybe $10 an hour is enough.

    In lieu of a minimum wage, I’d rather see a law which says the highest paid worker in a company can’t make more than 10 or 20 times what the lowest paid worker makes. That figure should include ALL compensation, not just wages. If a CEO wants to pay himself/herself $20 million, that means they’ll have to pay the janitor $1 million. The big problem facing this country is division of wealth. It’s concentrated in far too few hands.

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