Friday, March 21, 2014

The Real Problem

Infrastructure in the U.S. - roads, bridges, dams, water and sewer systems - needs repair, replacement, and augmentation. As a CNBC article notes, few disagree with this view. What holds us back is paying for the work.

CNBC has come up with a clever-seeming approach that works for a home improvement show but won't work for infrastructure. Product placement only happens when firms need to create public awareness of their product or service.

Individuals purchase no roads, bridges, or dams; firms which build these are disinterested in free general advertising. They need to reach a very specific audience: civil engineers.

The real problem is something else entirely. Any project with federal monies involved requires all contractors and subcontractors to pay union wages. These are typically much higher than other projects pay. In many regions union wages are paid only on projects involving government money.

We could afford to fix our infrastructure cheaper and quicker if we were willing to pay market wages, whatever those are in the region. There is no particular reason most road builders should command above-market wages to lean on shovels.