The strange and awful path of productivity in the US construction sector

https://bfi.uchicago.edu/insight/finding/the-strange-and-awful-path-of-productivity-in-the-us-construction-sector/

by ren_engineer • 3 years ago

206 408 3 years ago

bfi.uchicago.edu

number of houses or total square footage built per employee

Average house size has probably doubled in the last 50 years.

Nail guns can't make up for building code and higher finish work demands. It's not uncommon to see 6 or 7 layers in sheathing today.

latchkey10• 3 years ago

I'm remodeling my place right now. You're totally right, the building codes are a lot more complex and there is more 'work' to do as a result. No more just hiding electrical boxes in the walls. Heh.

That said, the products being used have improved a lot. Things like PEX tubing for plumbing (instead of copper) and glue on walls for showers (over doing tile work), make some aspects go a lot faster.

Edit: Oh, I forgot to mention vinyl plank flooring... omg, so easy and the results look and function great.

lotsofpulp7• 3 years ago

The big builders like DR Horton and Lennar target build times of 100 days per home that meets minimum code requirements, which is pretty good productivity. A community of 100 homes can be up and running in 2 years.

matwood6• 3 years ago

PEX is great. I highly recommend keeping some shark bites and spare pieces of PEX around, as it's easy to do repairs on your own if you have an issue.

Der_Einzige2• 3 years ago

Copper is superior. I specifically went out of my way to find a house with large swaths of the plumbing done with copper. Pretty neat to have anti-microbial properties built in.

switch007• 3 years ago

Those glue on walls seemed to be priced at “we know how much tiling costs”. £36m2 (cheapest I could find on a site similar to Home Depot) for some composite plastic seems crazy. They have some double that price too.

frankus3• 3 years ago

The great thing about PEX is that they made an expensive* tool that makes joining pipes like 90% less skill-intensive.

I'd love to see something similar done for electric wiring. I'm picturing something like an electrical box that you can directly connect Romex that's been stripped with a special tool, and then a circuit-breaker-style snap-in for the actual receptacle. The parts/tools would cost more but might dramatically speed up the installation.

*relatively expensive, especially in the early days.

RetpolineDrama4• 3 years ago

Things like PEX tubing for plumbing

PEX is terrible, pretty much every commercial brand has been shown to leech petrochemicals into your water. This varies a lot based on your municipal water supply's characteristics. Unfortunately cleaner water leeches more.

PEX saves megabuilders $$$ and plumbers time, but it's not good for you.

jaclaz• 3 years ago

I have no idea how much it affects the data used to make that calculation, nor how much is its relevance in the US, but here (EU, Italy) besides the building code improvements there has been a very noticeable increase in amount/complexity of electric and hydraulic/heating/conditioning installments.

belval2• 3 years ago

Pretty sure this is the right answer and calling this "worker productivity" seems a bit harsh. A "Pretty Good House" (book that was on the front page last week) includes insulation above and below the foundation slab, vapour barriers, double studs to break thermal bridges, complex window installation (again thermal bridges), air exchangers and heat pumps with ducts (or mini-splits).

New constructions (for cold zone), need to be air tight and that certainly comes at a cost in time as it is work to apply all the layers, run the conduits and whatnot.

kodah• 3 years ago

I have no data to back this observation up, but everyone (especially in the media, but also in corporate life) is attacking "worker productivity" lately. Everyone's got a reason, but when you dig into them they all stink.

recuter2• 3 years ago

Book may have been on the front page last week but I assure you very very few people in the US have insulation above and below their foundations or incredibly air tight houses.

hinkley• 3 years ago

More build steps, more safety steps, less undocumented overtime, ballooning costs of benefits. And I would be surprised if logistics don't play a role as well. Used to be more buffer in our distribution systems for materials. In a scenario where warehouses have surplus goods sitting around, I expect it's easier to call in a favor and get an extra shipment of materials for the partially finished garage that didn't make it into the estimates.

mindslight10• 3 years ago

Don't forget all the roofline complexity for "aesthetics". Or higher pitches because they look nice too.

It'd be interesting to see these stats broken out by trade, with an appropriate unit (/sqft might make sense for roofing, but it doesn't for wall sheathing).

I'd think a good chunk of this is due to safety expectations as well. It's a lot easier to walk around a roof if you aren't concerned with fall protection.

bbradley406• 3 years ago

As someone who works in construction, I have to say that rolling a few sheets of barrier or framing a couple extra walls really doesn't take that long or cost too much. It's on the order of $5k or less and a couple days work, for both materials and labor.

What does cost time and money is getting permits, planning approval, inspection, etc. Not that those are unimportant, but any delays are certainly not on the construction crew's behalf.

MontyCarloHall• 3 years ago

Isn’t the real headline then that building construction technology hasn’t improved at the same rate as other manufacturing tech?

For example, cars today are orders of magnitude more complicated than 50 years ago, but due to more efficient manufacturing technology, the auto industry has far higher productivity per employee than it did 50 years ago.

softfalcon2• 3 years ago

I believe this is why we're seeing some of the industry starting to experiment with pre-fabbed homes that are modular but can be constructed using the automation we see in car manufacturing.

The weak link in creating ever more complex homes, with ever more stringent building codes, at faster rates, is to remove the "humans with nail guns and drills" from the construction process.

At some point, us meat sacks are the weak link in optimizing an industry. Humans can only go so fast. That's why (as you've said) we've seen massive gains in productivity for other manufacturing industries.

dzmien• 3 years ago

I would imagine that automation plays a role. And maybe car manufacturers can exercise more control over assembly lines, and don't have to worry about unforeseen environmental factors. Of course, that is just a guess, I don't know enough about construction or car manufacturing to really say.

rsynnott3• 3 years ago

Building construction technology _has_ improved, but, particularly for residential stuff, people do not care for some of the improvements. You could build Soviet-style modular apartments, but, well, no-one really wants that.

nemo44x8• 3 years ago

Nail guns can't make up for building code and higher finish work demands. It's not uncommon to see 6 or 7 layers in sheathing today.

Yeah pretty much this I suspect. The paper doesn't propose that more regulations and complex code is why it's harder to build things today. And that's not a bad thing - code is a great thing since it sets a standard.

Houses from 100 years ago, a carpenter could just make game time decisions regarding things that are highly scrutinized today like staircase run/rise, doorway height, etc. If you gut an old house it's amazing how simple they are.

The old saying "they don't build them like they used to" applies here. We don't because we can't and when they did they overbuilt them because they were simple and it wasn't documented what the build had to be.

pixl9711• 3 years ago

Also everything that is built needs regular inspection while in progress.

When the frame is put up it is typically inspected to ensure it meets code and that correct fasteners and brackets are used. Until the inspection is done you don't see roofing and electrical finished up. Then you have the electrical and plumbing on top the foundation. And when that is in its inspected again. Also heating cooling piping. Then fiber insulation is put in walls, then you have your drywall installed. Then you have the different finish teams come in. Finish plumbing, cabinetry, tiling, floors. And then another round of builder inspection. Then you get to the city and bank inspections.

Any one of the inspections or the specilaty teams running slow can push the whole project back. If your AC ducts aren't in you can't drywall for example.

rsynnott3• 3 years ago

Higher proportion of apartment blocks (almost always higher cost per sqft, with the tradeoff being lower land use) also seems likely to be an issue.

arcticbull4• 3 years ago

Youre exactly right. The average new home has twice the square footage it did in the 70s. [1]

[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...

fortylove2• 3 years ago

6 or 7 layers in sheathing today.

What do you mean by this?

hindsightbias3• 3 years ago

https://www.finehomebuilding.com/project-guides/insulation/c...

conductr3• 3 years ago

Homes are architecturally more complicated than the ranches and bungalows of the past as well. This increases the time spent on each job significantly.

RC_ITR4• 3 years ago

There's the theory that building codes are used similarly (and complimentarily) to zoning laws to limit the supply of new housing (and therefore raise property values).

A great example being fire walls and mandatory self-latching doors between garages and living spaces - definitely a logical thing (cars and their gas are flammable, so let's isolate them from the house).

When you look at the data [0], garage fires are 2% of residential fires because cars don't really catch on fire in garages (fires happen in garages, but usually because of intentionally set fires getting out of control)

So now, in the midst of a housing affordability crisis (or a the end of a great run for real estate, depending on your outlook), we have construction workers using special fire-resistant drywall (that must be cut specially and cannot have holes in it), placing solid steel doors, and generally spending a lot of hours and materials building spaces that people don't even live in, when really, adding smoke detectors in garages solves the problem.

[0] https://www.usfa.fema.gov/downloads/pdf/statistics/v14i12.pd...

asdff2• 3 years ago

This even extends to stuff added to builds that are mandated by law and have little reasonable justification. For example, a city might demand all new apartment units need to have a balcony, and all new apartment buildings might need to have some open courtyard space. Now you've increased the cost per unit by a huge amount by mandating these balconies and also the unrentable voidspace.

rovolo• 3 years ago

The 2% is a bit misleading because the fire severity depends on how well it's contained. ~50% of fires are "confined" to an object, mostly cooking fires inside pots. Garages are 5% of non-confined fires, which is similar to living rooms (6%) and attics (5%) [0]. The numbers also go slightly up when apartment buildings are excluded[1], taking garage fires to 6% of non-confined residential fires.

[0] https://www.usfa.fema.gov/downloads/pdf/statistics/v21i2.pdf

[1] https://www.usfa.fema.gov/downloads/pdf/statistics/v21i6.pdf

mike502• 3 years ago

That's not the root cause. The Root cause is needing a house for your car.

LatteLazy2• 3 years ago

A number which is hard to define and impossible to measure should not be treated as a fact.

LeeroyWasHere• 3 years ago

They're measuring exactly what they want to measure to draw the conclusion they were looking for.

greenthrow• 3 years ago

This is absurd. Houses are so much more complex than in the 1970s, and so much larger. In 1972 central AC was not common, now it's basically required. Square footage is way higher. Number of electrical outlets and switches per room. Moulding and trim are expected in many houses. Porches, decks, patios are much more ornate. Today's average house ia closer to the house of a millionaire in the 1970s than the average house from that time.

bgentry• 3 years ago

From https://www.energy.gov/articles/history-air-conditioning :

By the late 1960s, most new homes had central air conditioning

So the addition of central HVAC likely isn't a big factor, because most new homes in the US already had it 50 years ago.

pixl9711• 3 years ago

Eh, not 100% sure if it's a good comparison or not. Mid century homes with central hvac were typically poorly designed from my experience leading to over/under heated rooms. Modern systems typically have a much better designed return air system (hence more piping) rather than a single return at the unit.

croes2• 3 years ago

Would be interesting to compare the regulations for building construction now and then.

JamesSwift• 3 years ago

I'm not sure I would say much of anything is more ornate today compared to prior. Especially if you actually look at the details of the craftsmanship, anything of "standard" quality of times past are high-end details now.

ClumsyPilot• 3 years ago

And second, the authors describe the curious fact that producers located in more-productive areas do not grow at expected rates. Indeed, rather than construction inputs flowing to areas where they are more productive, the activity share of these areas either stagnates or even falls. The authors suggest that this problem with allocative efficiency may accentuate the aggregate productivity problem for the industry.

This is clearly accurate - people are not buying the cheapest housing in the middle of nowhere. Instead, the most money is spent in cities which are already built up and are more difficult to develop further.

anonreeeeplor• 3 years ago

Corruption was a massive problem in USA industry as well as slowdowns due to legal red tape.

My guess is incompetent government is at the root of the problem.

The more you scale red tape, the harder it is to do anything. Look at the California high speed rail.

Corrupt governments make far more money by slowing down a project and using it as a washing machine to extract rents.

Getting large public projects to misspend their funds on red tape, lawyers and other while delaying building is way more profitable than just letting any construction project simply get the job done fast.

The corruption of the government itself and hybrid with larger construction companies very likely incentivized slow and never complete construction.

Why would you want the work done fast when drawing it out and slowing it down is far more profitable, to milk it forever:

markus_zhang3• 3 years ago

Red tape in many cases is simply an excuse for more corruption or stronger interest groups IMHO. It puts a legal stamp on a lot of things so that ordinary people cannot argue that.

That also makes me think that SWE should either break all those red tapes or put up their own. Nowadays they are simply being milked by everyone else who is behind a red tape or a stamp or a certification or something similar.

dsfyu404ed2• 3 years ago

It puts a legal stamp on a lot of things so that ordinary people cannot argue that.

Ordinary people can argue it. They'll just get argued back at and mired by the other 50% of people who will knee jerk defend the government and the government and the interest groups will laugh all the way to the bank.

Mechanical9• 3 years ago

With respect to incompetent government, I like to share this opinion whenever possible: The US government and US state governments are incompetent due to constant gridlock. Incentives of politicians within our governments are similarly to draw out all processes since employment is not based on performance or promises kept, but is instead guaranteed for a fixed amount of time. Politicians can continually base their re-election on the fact that "the system is broken", while they themselves are doing nothing to fix it or are not able to do anything to fix it.

Having separately elected house, senate, and president is a primary source of gridlock. Each body can reject a legislative change, while none can effectively create change. The only way laws can be passed in this system is under a very rare set of conditions. When those conditions are present (government shutdown imminent, filibuster eliminated, plurality requirements reduced) you see large omnibus bills pushed through as fast as possible, without time to adequately vet the details.

From an engineering perspective, this would be like pushing a few massive commits every few years rather than making regular bug fixes as needed. As such, our laws are buggy and unmaintained. Unfortunately, this leads many to believe that regulations generally are ineffective rather than the poor implementations of such being ineffective.

Poorly written legislation puts more pressure on the judicial system to litigate between the lines. This is an externality that is extremely expensive for every individual and company to have to deal with.

I advocate for a more parliamentary style system where politicians continued careers are based on their effectiveness and continued approval rather than fixed terms. There are plenty of ways to ensure proper checks and balances without stopping government dead in it's tracks.

pixl9711• 3 years ago

Please don't ignore that most of these regulations exist because builders will do whatever they can to profit as much as possible, generally to the disadvantage of the buyer that is typically ignorant of the risks of a home.

Andrex• 3 years ago

How much of the red tape is needed vs. unnecessary? I'm glad lead isn't being used anymore and wheelchair access is required, among other things, but I can see things getting nitpicky and senseless real quick. My mom's antique-style shop had to close due to some really strict fire regulations she couldn't do anything about (another store setup a thin wall between their store and hers' and she had been operating for over a year). Fire marshall just walked in one day and said "you're shut down," like something out of Seinfeld[1].

1. https://en.wikipedia.org/wiki/The_Mom_%26_Pop_Store#:~:text=...

AlexTWithBeard• 3 years ago

Safety is our number one priority.

Not efficiency.

avelis3• 3 years ago

Those two aren't mutually exclusive IMO.

CodeWriter233• 3 years ago

When you have to re-anchor your safety harness to move 5 feet it's kind of difficult to maintain efficiency.

dsfyu404ed2• 3 years ago

Feel-good rallying cries like this make for cheap virtue points but are completely meaningless in a reality where pretty much nothing is a binary choice with a low number of variables.

For example, it's easy to sit in an air-conditioned office and say "thou shalt not overload the trucks" but when you actually drag your ass to somewhere you can observe the conditions in which the per-load work is being done it becomes clear that much analysis must be done to figure out if more trucks at 80k is in fact safer than fewer trucks at 120k.

pixl9711• 3 years ago

Being that braking distance will increase around 250ft at 65mph I would say it makes a pretty massive difference. That is unless you want to limit the 120k LB truck to 55mph which causes its own issues.

a-r-t• 3 years ago

Houses were much simpler 50 years ago. The building codes have changed a lot since then and modern houses have added construction complexity with better waterproofing, air sealing, fire proofing, bracing, and more advanced mechanical systems.

markus_zhang3• 3 years ago

However many modern homes use inferior material for the job comparing to the older homes in the same area. Probably to cut cost. I'm not sure if it was also the case for older homes built in the 50s/60s though.

lotsofpulp7• 3 years ago

Can you give an example of inferior material?

nemo44x8• 3 years ago

It really depends by what you mean by inferior though. Yes, old homes (pre-WW2) were built using old growth wood that is rot and insect resistant. And they overbuilt the structures in many ways. Of course we have some selection bias as the old homes that were not built well (of which there are many) are simply not standing any longer. So the old homes we see today were probably built very well with the materials of the time.

Saying that, those materials (old growth wood) aren't around anymore. I think the industry went through a bad patch from the 1950s through the early 90s where A LOT of construction was bad and we didn't really know what we were doing with the sudden change to engineered materials. We didn't really understand vapor barriers because old homes didn't have them and didn't need them. They dried themselves out because they were so drafty and the old wood wouldn't rot easily. So when we moved to rapidly grown pine and engineered wood and insulation we didn't account for moisture very well and those homes have rot issues. Then we came up with water barriers but didn't account for water vapor and moisture would slowly get trapped over time and begin to rot the structures.

However, today we have an excellent understanding of what make for a quality dwelling. We understand insulation extremely well - where to put it, what type to use where, how to keep it dry), we understand vapor barriers very well and they are made to block liquid water but allow water vapor to pass outside, etc. Windows have excellent R-values today compared to old homes as well.

But yes, you can build cheap homes today that are crap. Code does reel you in a bit but I've heard of code in some areas being so bad it would allow you to sheath a house in cardboard essentially. Insane.

jeffwask• 3 years ago

I also wonder if a focus on safety has slowed things some for the yolo days of just breathing in asbestos and lead.

parineum3• 3 years ago

I find both your parent and your comment to be the obvious answers for why "productivity" has dropped. People are probably just as, if not more, productive. It just takes more work to complete a single house/office/job due to both worker safety and building safety.

Having some experience in the field, the idea that migrant/undocumented/illegal/etc workers are spoiling the workforce is pretty absurd (as is suggested in a few other comments). There were plenty of terrible workers that I knew to be or suspected to be in that category but the rate that they were bad was no different than anyone else.

rqtwteye2• 3 years ago

Agreed. Although it's very surprising to me that the efficiencies of mass production haven't gone to housing. They are often still created by manual labor instead of assembling prefabricated modules. I think it should be possible to build panels that are well insulated and have all the needed wiring and everything else already built in.

lotsofpulp7• 3 years ago

I do not see why it “should” be more cost effective. Moving big, costly things requires big, costly equipment and expertise. And losses can be higher in the event of a failure.

sokoloff2• 3 years ago

Housing is a mass customization market more than a mass production one. Most people don’t want to live in a modern Levittown. They want some space, but they don’t want the exact same set choices in their house as 1000+ other people have made.

troupe2• 3 years ago

Structural Integrated Panels (SIPs) and Insulated Concrete Forms (ICF) are two examples. SIPs are made from compressed foam with pressed wood on either side and are precut in the factory to fit together at the job site. ICFs are basically giant foam legos that you assemble together and then fill with concrete.

croes2• 3 years ago

Maybe there is a correlation

"Worker injuries and illnesses are down—from 10.9 incidents per 100 workers in 1972 to 2.7 per 100 in 2020."

https://www.osha.gov/data/commonstats

nobodyandproud2• 3 years ago

Are undocumented workers also tallied?

rightbyte• 3 years ago

If they were there would be documentation, right?

legitster• 3 years ago

And second, the authors describe the curious fact that producers located in more-productive areas do not grow at expected rates. Indeed, rather than construction inputs flowing to areas where they are more productive, the activity share of these areas either stagnates or even falls. The authors suggest that this problem with allocative efficiency may accentuate the aggregate productivity problem for the industry.

So... basically high-rises and mobile homes?

It's hard not to see this as a direct result of city councils universally loathing oversized housing blocks.

throwaway4aday• 3 years ago

That graph looks an awful lot like the one for GDP vs Wage Growth.

nanocat• 3 years ago

I came here to say that ^^

jessaustin7• 3 years ago

Good point! For those who haven't noticed the most important fact about the USA economy:

https://research.stlouisfed.org/publications/economic-synops...

Kukumber3• 3 years ago

The pay and the working conditions are miserable, plus the society doesn't value hard work anymore

feoren2• 3 years ago

"Society doesn't ___ anymore" statements are nearly universally bullshit.

troupe2• 3 years ago

Society doesn't make true statements about society anymore.

Kukumber3• 3 years ago

that explains the current situation, it's all bullshit :clown_face:

https://money.usnews.com/careers/best-jobs/construction-work...

https://money.usnews.com/careers/best-jobs/web-developer/sal...

Am4TIfIsER0ppos• 3 years ago

Because of the open southern border allowing low cost labor to flood your market.

vlunkr2• 3 years ago

I don't know what you're talking about, we built a wall and Mexico paid for it, remember?

rqtwteye2• 3 years ago

Easy. Have them to daily standups, sprint planning every two weeks and a day of retrospective and soon their producticity will be rockin'.

winrid2• 3 years ago

We also need to break the tasks down to smaller units.

*George, instead of just putting up this wall, can you have a ticket and close it for every board you put up?*

VLM3• 3 years ago

Even better, we could base hiring on solving word search puzzles containing workplace words to select the best of the best construction workers, and maybe some trivia tests.

swagasaurus-rex4• 3 years ago

Make sure to have them point out each task ahead of time and then get upset if they take longer than the allocated points

flavius29663• 3 years ago

also, get upset if their estimates are too high. They are agile, they should finish things faster

scythe• 3 years ago

It doesn't seem like an uncorrelated observation that "construction worker" is one of the most undesirable occupations, alongside "janitor" and "line cook". If it's a terrible career, only the people lacking options will choose it.

Housing, healthcare and education are the three sectors infamously outpacing inflation in the modern economy. In the latter two, workers usually have at least a decent, if not good, career prospect. Construction, meanwhile, is considered a gig for noncitizens who can't be hired in the regular economy — notwithstanding the special subsets like electricians and plumbers.

Part of this likely has to do with the incredible amount of unemployment risk faced by a construction worker; construction volumes may plummet in any region at any time, forcing workers to move hundreds of kilometers away or change jobs entirely. Worse, these fluctuations are often correlated among regions, practically guaranteeing that many builders will be out of a job in downturns. Education and healthcare, at least, suffer almost none of this, despite other stressors.

One mitigation may be a sort of "Keynesian public housing" apparatus: while the populist thing to do is to call for public housing when prices are at their highest, this just puts more strain on a squeezed construction market. But if the state picks up the slack during downturns by specifically building small, affordable-type (if not explicitly subsidized) units, it may maintain employment volumes and (long-run) prevent lower-class pain during housing booms, while the units built will not directly compete with the sort of large & luxurious housing built by the private sector.

thatfrenchguy• 3 years ago

And second, the authors describe the curious fact that producers located in more-productive areas do not grow at expected rates. Indeed, rather than construction inputs flowing to areas where they are more productive, the activity share of these areas either stagnates or even falls. The authors suggest that this problem with allocative efficiency may accentuate the aggregate productivity problem for the industry.

This is a nice way to say "NIMBYs have made sure building anything in areas where there are jobs is a herculean task"

exabrial• 3 years ago

It's not construction worker productivity so much as building codes complexity has increased 40%.

pirate787• 3 years ago

In this time-period there has been a large-scale introduction of undocumented workers into the construction labor force. They are a quarter of some construction labor categories. Perhaps using undocumented subcontractors may play a role in lower productivity growth (cheap, unstable, and relatively unskilled labor) or maybe just distorting the statistics.

https://www.americanprogress.org/wp-content/uploads/2021/02/...

alexfromapex• 3 years ago

Also the real wages have not increased much but all the expenses have, it's just demoralizing

sokoloff2• 3 years ago

It cannot be the case that “all expenses” have grown faster than inflation (which is what real wages takes into account).

nxm• 3 years ago

But people still want and yell for “affordable housing”. Can’t have your cake and eat it too

a-user-you-like• 3 years ago

You mean inflating the currency to hell has negative consequences? Shock.

stcredzero• 3 years ago

There is a lot of historical evidence, that deep knowledge and long tail expertise in specific industries is carried in groups of people with a close knit subculture.

Such knowledge can also be transmitted from one subculture to another, with varying degrees of success. In order to bring in new people, one must either bring in a few beginners into a majority competent population, or have one subculture highly motivated to absorb and replicate the success of another.

This is well covered in Migrations And Cultures: A World View by Thomas Sowell.

ren_engineer• 3 years ago

the language barrier would definitely slow things down as well, I've seen plenty of construction sites where there directions have to be translated to Spanish and things are frequently lost in translation. Plus it prevents general brainstorming between a large chunk of the construction team who only have a 1-2 people capable of translating between the groups

tristor3• 3 years ago

I think this is one of the major impacts. My experience (family in construction) is that day labor / undocumented workers often don't have construction skills, and so have to be trained on the job, and each crew has mostly new/unskilled folks with a few skilled folks to guide them and keep them on track.

Over time, these folks become skilled, and generally end up running crews. It's very commonplace to find the more experience undocumented workers being the ones running small subcontract crews under the table with day labor, because they speak fluent Spanish.

robotresearcher• 3 years ago

How is the labor cost accounting done in businesses that rely on such labor? How does the risk of government sanctions to the business play out?

I'm interested where the blind-eyes are built in.

huevosabio2• 3 years ago

My experience (in the Bay Area) has been that regardless of country of origin, construction work is insanely inefficient. Lots of administrative bs, lots of made up rules, lack of communication between trades, tons of "not my job" attitude.

cptskippy• 3 years ago

Just speaking from my experience with a protracted remodel...

and each crew has mostly new/unskilled folks with a few skilled folks to guide them and keep them on track.

In some cases the crew changes from day-to-day so any context a work has on a particular job isn't necessarily carried over form day-to-day. The day laborers are highly dependent on the crew chief for direction.

It's very commonplace to find the more experience undocumented workers being the ones running small subcontract crews under the table with day labor, because they speak fluent Spanish.

This too introduces inefficiencies if that crew chief isn't present, late, or leaves the site for any reason. And often the crew chief will instruct works to do the wrong thing, or lacks the knowledge (e.g. electrical) to challenge something.

samstave3• 3 years ago

Have you heard of Bangledesh, India, Phillipines and their relation to middle east construction practices project-managed by NL, UK pms?

I hope you understand, because of the implications.

jzebedee• 3 years ago

No, I haven't. What's the connection?

sharemywin2• 3 years ago

Are undocumented workers factored into the number of employees? I would assume the are excluded from the # of workers in the calculation.

wmil2• 3 years ago

There's no reason they would be excluded. They are getting paid so they'd show up on the books.

SpeedilyDamage5• 3 years ago

What’s wild is that the entire concept, as we know it, of “undocumented workers” only existed for the past ~22 years.

marcusverus5• 3 years ago

You think that the concept of unauthorized workers coming across the border has only existed since the year 2000?

I think you're confusing the term "undocumented" or "undocumented worker" with the underlying concept that's referenced by the terms. The concept has long been in in the public spotlight using different terms ("illegal" or "illegal alien").

Here's some statements from Gerald Ford on the same concept, using the old lingo: https://www.fordlibrarymuseum.gov/library/document/0110/1181...

NTARelix• 3 years ago

I have memories of illegal immigrant workers from longer than 22 years ago and the USA has had immigration laws for much longer than 22 years. Have I misunderstood your statement?

renewiltord2• 3 years ago

Here are Reagan and H.W. debating whether "children of illegal aliens should be allowed to use schools" https://www.youtube.com/watch?app=desktop&v=YsmgPp_nlok

This is from 43 years ago.

javajosh• 3 years ago

undocumented workers [are responsible for the productivity drop]

I am confused by this assertion. If they are undocumented, wouldn't they be excluded in the stats? And if they aren't included in the stats, shouldn't we expect an artificial increase in worker productivity? If there is a 4:1 undocumented to documented ratio, then that 1 documented person will get "credit" for the work of 5 people! Even if 4 of those people are relatively unskilled, that's still a big boost.

My initial thought about this is that productivity declines because workers wait around a lot, and they wait around because of ballooning administrative overhead. This would also be consistent with what we know about state of the medical industry and academia during the same time period.

taeric2• 3 years ago

I'm inclined to take your side on this. By virtue of being undocumented, they should be boosting the perceived productivity, not dampening it.

If I was to steelman the idea, though; I would guess that removing incentives in the form of higher pay will lower the contributions of everyone involved?

kube-system2• 3 years ago

Undocumented workers show up in many statistics. "Undocumented" doesn't literally mean that there is nothing recorded about this person, it means they do not have permission to work in the US.

lazzlazzlazz• 3 years ago

"Undocumented" means they lack citizenship or a valid visa. It doesn't mean they aren't calculated in productivity statistics. Many undocumented workers even pay taxes to the IRS, are counted in censuses, and more.

hn_go_brrrrr• 3 years ago

"Undocumented" is the current preferred euphemism for "illegal immigrant".

Uehreka• 3 years ago

Not necessarily. Undocumented doesn’t mean “excluded from the stats”, it means “doesn’t have a valid work visa or social security number”.

I’m not sure if something similar happens in construction, but I’ve heard that in the landscaping business a supervisor will just pull up to a Home Depot with a pickup truck, and there’ll be a bunch of people waiting around, and they’ll go “Who wants $X for Y hours?” And then 4 or 5 guys get in the back of the truck and they head to the work site.

In a situation like that, you’re probably keeping track of how many people you employ each day so you can figure out how many you need for future projects, but you’re not gonna be able to produce a list of social security numbers if someone asked.

hector_vasquez• 3 years ago

Paying less for labor increases productivity. Anyone in the construction industry will point to the code books for their explanations.

peoplefromibiza• 3 years ago

In this time-period there has been a large-scale introduction of undocumented workers into the construction labor force

or, as usually happens, being "documented" have become more and more difficult, so the number of undocumented workers has gone up as a consequence.

also, immigrants are replacing those workers who are not willing to do the job most of the time.

it's not unusual everywhere you go in the west to witness that a large portion of construction workers are immigrants.

Here in Italy it's mostly people from Romania, North Africa and other eastern European Countries.

Virtually no Italian wants to be a mason anymore.

They rather prefer to work for app-based tech companies (Glovo and such).

And don't underestimate bureaucracy.

huevosabio2• 3 years ago

This is an unlikely hypothesis.

Most likely explanation is just that we have been burdened with infinite amount regulatory busy work.

renewiltord2• 3 years ago

From the working paper:

There are several plausible channels for labor measurement difficulties in construction, including a higher than average frequency of employees working irregular hours, contractor labor that may be misclassified by survey respondents, and, especially in more recent decades, labor supplied by undocumented workers.

It then goes on to talk about that in more detail, but I won't copy that in because every time I do, someone goes on with "but what about X?" where X is also in the very next paragraph.

Nothing wrong with coming up with the hypothesis, honestly. But the extraordinary number of responses to your comment that speculate on something that one can immediately find are just so typical of HN comments.

I sometimes see that in software engineering where some engineer will tell me about some library we're using that we have access to source code for: "yeah, I looked at the docs and it's not clear if it does A or B". But...the source code is right there. Why not just use that? At least then if the library is doing it wrong you'll know for sure.

freitzkriesler• 3 years ago

You're going to get a lot replies nit picking this, but as a former construction PM gone software PM, I can tell you this: good skilled tradesmen are hard to find and their illegal immigrant fill ins (even the legal ones) are dangerous, do shoddy work, and will almost always delay a construction project. Let me put it into HN terms: It's like hiring a bunch of off shore junior devs to save money and then you wonder why the finished product is so shoddy or worse keeps failing QC. Then you have to bring in the $100/hr senior dev to clean up the mess. Not a lot of differences between building software and well buildings.

valray• 3 years ago

The undocumented workers that I personally know are skilled, motivated, and diligent workers. Perhaps in part because they desperately need to hold on to this source of income. If anything, I think they would boost productivity metrics.

rsj_hn4• 3 years ago

I don't think this is due to illegal aliens, without which our construction industry would be in even worse shape, but rather that there have been massive declines in the competence of domestic workers across the board, and this has been hidden by outsourcing, importing skilled workers, and technological growth (e.g. have machines do things that domestic workers cannot), so that you see productivity declines in those areas where you cannot outsource and you cannot pay extreme wage premiums to attract people with basic reasoning skills.

You can see this literally everywhere. Unless you are going to pay 200K+ you will have difficulties hiring reasonably intelligent, motivated, conscientious workers.

slt20214• 3 years ago

Bingo! Your comment hit the nail in the head.

This also has to do with overall rise in cost of good education and decreasing quality of education in public schools across the board.

avelis3• 3 years ago

For general US construction, there are single-source cost-plus service contracts. Which incentivizes construction to do only the necessary and charge the max possible for it.

In contrast, a concrete milestone service contract with re-bid sections of the contract that miss their milestones can create a competitive construction landscape.

Things I am omitting. Red tape slowing down construction.

Changing the incentive structure can probably help boost efficiency on the provider side.

LatteLazy2• 3 years ago

I thought Cost Plus incentivise people to do unnecessary work? Since getting x% of "plus" on top of a huge messily, error filled contract is more than a lean efficient one?

avelis3• 3 years ago

I think contract organization aside. If the government says it's a requirement the vendor will charge the max it can and accomplish it no matter what. So, in practice vendors have accountants on staff that will work a contract in such a way that logistically allows the vendor to charge the most it can for the contract.

mistrial9• 3 years ago

supply-side blame-game

jedberg2• 3 years ago

They're measuring square feet completed per employee. Houses are twice as big now as they were 50 years ago. Anyone who's every done a remodel or new construction knows that 80% of the time is spent on the last 20% of finishing work, and with twice the square feet, that's twice as much finishing work.

Also, does this paper take into account increased regulations? Both the time spent complying with new building codes as well as the time spent waiting for inspectors?

eklitzke• 3 years ago

If it's twice as much finishing work it's also twice as much "fast" work (the first 80%). The ratio of time spent between the easy stuff and the hard stuff shouldn't change, at least not just based on a square footage change.

pixl9711• 3 years ago

Until you consider central heating, multiple bathrooms, far more electric outlets, and then multiple inspections of the above by different groups. Modern homes are far more complex.

gruez5• 3 years ago

They're measuring square feet completed per employee. Houses are twice as big now as they were 50 years ago. Anyone who's every done a remodel or new construction knows that 80% of the time is spent on the last 20% of finishing work, and with twice the square feet, that's twice as much finishing work.

I don't see the point you're making. Houses are twice as big, so they require twice the amount of finishing work. If productivity was growing or staying the same, you shouldn't get less productivity as a result of that.

jedberg2• 3 years ago

The finishing work takes longer now because of the complexity.

Giorgi• 3 years ago

I wonder how Chinese compare, I bet they doubled.

VLM3• 3 years ago

Famously, their inspection infrastructure and regulation boils down to "buyer beware" so its going to be an apples to oranges comparison.

vlunkr2• 3 years ago

Probably hard to say because you can't trust any answers from the propaganda machine.

pixl9711• 3 years ago

Do the Chinese actually build much single family housing?

red-iron-pine• 3 years ago

And I bet most of them are empty. And will be forever.

See also "Chinese ghost towns": https://en.wikipedia.org/wiki/Under-occupied_developments_in...

wonderwonder2• 3 years ago

Wonder how much of it is related to contractors underbidding to win a contract and then saying they need more money which slows everything down. Or just throwing a bid out without really doing the due diligence required to understand what needs to be done. For example the New York tunnel project that's billions over cost and years behind. I see this every time I hire a contractor to do work on my house, every experience is terrible and over cost and behind schedule.

Currently looking to raise a sunken living room due to flood risk. I have a room that is connected to the sunken living room that is raised currently via a wooded frame. The dry wall is open so its clearly visible. There is clearly open space under the floor lift. Guy gives me a quote, I was very clear when I met him that I needed under the side room filled as well and that the goal was to prevent water seeping in due to the floor being lower than ground level. I have him come out again because I am ready to hire him but want one more walk through. I ask what the risk or complication is pouring concrete under the raised side room and the existing floor lift system. He acts surprised and says it was not part of the quote. I ask the complexity of pouring the concrete behind the fireplace because there is a gap behind it and the wall. He acts surprised and says its not included. All of this was clearly visible when he came out the first time and the stated goal was to raise the floor to prevent water seepage due to height discrepancy inside and outside. He says he would have to demo the giant fireplace...

My prior experience I had a contractor that I was working with who kept telling me that the crew was at the house working and I had to call and tell him over and over that no one was there. For months...

They do this nonsense every single time, they submit a BS quote just to get the job figuring once they are in they can just charge whatever and figure it out. I have yet to meet an honest or competent contractor.

pixl9711• 3 years ago

If you have a contractor looking for jobs, at least recently, it's likely they are a terrible contractor. The good contractors tend to be booked out for months

linuxftw• 3 years ago

Have you considered what you're asking for is not practical? Nobody is going to attempt to pour a slab under an existing structure through a hole behind a fireplace.

wonderwonder2• 3 years ago

I have now after ensuring that he came back the second time and he said its not practical. I would have expected him to have told me the first time as that's his area of expertise. He only said its not practical after he came back out and I asked him to confirm that he was confident there would be no issue with the existed lifted floor. That's exactly what I mean, they say yes to anything to get the job and then only after the deposit is made do they start to hedge that there is a complication. We are now not going to fill the sunken living room but are going to attempt to seal the exterior of the house, add gutters and add a french drain system. Something completely different from what he originally pitched.

If I ask a contractor how to prevent water seeping into my sunken living room and surrounding areas, and he tells me filling it with concrete is the best approach and provides a quote to do so I expect that he has taken all existing facts into consideration.

blacklion• 3 years ago

I wonder, how injuries and death on construction sites have changed at this period.

ajross• 3 years ago

Note that this is using a counterintuitive definition for "productivity". Most comments here are taking it to mean that construction projects get less stuff done (foundations dug, concrete poured, etc...), but it's actually measuring it as an economic value in units of "value added per full time worker".

That seems to be rather more related to the distribution of capital than work output. If the construction industry were getting more efficient, you'd actually expect its margins to be declining, right? I don't think this is measuring what people want it to measure.

VLM3• 3 years ago

A plumber can charge $15K to install a new sewer line, both in 2022 and in 1972 (inflation adjusted). However, an increasing fraction of money is likely being spent on lower margin lower productivity "construction". I'm sure faux paint finishes look nice, and they are expensive, but they're not "replace a sewer lateral" expensive. Thus its inevitable the overall market segment will become less productive if it expands.

The "mistake" in the linked article is assuming all construction work is equal and unchanging over those decades where CLEARLY there have been infinite real estate fads over the decades. There's just no way replacing countertops with granite can generate as much financial productivity as sewer work, and the fraction of the market spend on low-profit countertops is vastly higher now.

antman• 3 years ago

Having worked in a construction site in another country my observation would be that we used to have countless undeclared labor for tax reasons anf now we have countless divided by two...

Now working as an analyst it is important each time to have a ground knowledge and business expert to avoid obvious measurement biases. Especially when comparing different eras.

eagleinparadise4• 3 years ago

CRE guy here. A lot of this "productivity loss" is also due to government related staffing issues and bureaucracy. Most people are describing more complex building codes, so I'll add something new.

I had a project that was delayed by over a year during Covid because the city approved incorrect plans, came back and requested revisions, and then lost the physical plans (without us knowing until we checked in asking what the status was). This was almost a year delay and added cost overruns, etc. It also made the required rent higher to recoup those costs and try to be profitable (that deal will lose money). Remember, there's someone at the city working 9-5pm clocking in and out.. they are not impacted if the project is denied, delayed, etc... while the developer is incurring cost of capital of 7-10%.

Another example of bureaucracy: you have to go through a particular order of inspections when developing property. One of them includes elevator inspections. You have to have power before that, so that's another set of inspections.

IIRC, during Covid there were only something like half a dozen elevator inspections for the entire state of CA. The source below says there was 15 in 2019. If your elevator inspection is 2 months late... guess what, your project is going to be late.

https://laist.com/news/elevator-inspections-los-angeles

Remember the modular startup Katerra that gobbled money from Softbank? I knew a developer who did one of their projects. He said Katerra would deliver the units on time, but the city's permitting process was so broken that they couldn't actually install or inspect these units. So they would have to find lots to store the material (+costs & +issues). Katerra's "value-add" was the speed of delivery would cut costs down, but in reality this was hard to achieve "on-site".

runnerup2• 3 years ago

made the required rent higher

If, all along, you could have rented it out for more money ... why were you planning to rent it out for less money? I get that you wouldn't have to, but it appears that the "market rate rent" was higher than you initially anticipated.

As a corollary, assuming that you had initially planned on the highest rent that the market would bear...it seems that after a year of unexpected delays you'd most likely still choose to finish the project even at a loss. This is because all the loss would have already been sunk cost that you can't change anymore, and at the "original maximum rent the market would bear" you'd still make your IRR/ROI on the marginal future investment of finishing the construction.

So, assuming you couldn't raise the rent, you'd lose money either way, but you'd lose less money by finishing the construction vs. losing more money by abandoning the project entirely.

bfeynman• 3 years ago

My guess is they probably put more money into it (higher quality appliances and such) to get higher rent that would give acceptable cap rate.

bobkazamakis• 3 years ago

They want all risk to be put on external factors, that way their business can make profit without any - a tale as old as time.

brewdad2• 3 years ago

Because outside of an economics textbook, no one has perfect information on what the market will bear.

s1artibartfast5• 3 years ago

Your comment only makes sense if you ignore the rest of the sentence you quoted.

"It also made the required rent higher to recoup those costs and try to be profitable (that deal will lose money)."

required rent =/= planned rent =/= actual rent

Higher costs than expected can easily cause a project that would be profitable to be a loss.

willi59549879• 3 years ago

When i read the article i expected something like that to be the reason. Some paper pusher writing down rule books to follow. Then someone else who hasn't gotten his hands dirty in his life writes a report the workers are to blame for bad productivity.

yamtaddle10• 3 years ago

State and local governments are, as far as I can tell, simultaneously spending way too much money and are badly understaffed in certain areas. Sometimes even while appearing well-staffed, because there's some bottleneck elsewhere in the system (due to insufficient staffing there) preventing the efforts of an army of other frontline workers from being effective. Like the elevator inspector thing—you may have more than enough electrical inspectors but not enough elevator inspectors, so, the extra electrical inspectors can't improve the situation.

Of course the pay's shit, you're subject to all kinds of quality-of-work-life destroying whims of politicians at the top, the bureaucracy is as abusive and ineffective as stereotypes about bureaucracies would lead one to expect, and if you have an effective union shielding you from some of that, about half the politicians are constantly trying to weaken or eliminate that, plus trying to mess with your pension which is practically the only attractive thing about those jobs... so, no fucking wonder, really. Recent wage inflation has made all this stuff worse by making unresponsive government pay scales far less attractive than market-driven wages elsewhere, so systems and offices that were teetering before are now falling over.

onlyrealcuzzo• 3 years ago

State and local governments are, as far as I can tell, simultaneously spending way too much money and are badly understaffed in certain areas.

Shouldn't be a mystery.

In many states and localities a massive portion of spending goes to pensions.

zbrozek• 3 years ago

They might also simply be exerting too much oversight. The other way to reduce these pressures is to reduce workloads by simply caring less. I'm doing a remodel and I got three pages of comments that were 90% about minor annotation issues that won't make any difference to anything on the ground ever. But it burned tens of hours of plan checker time.

lotsofpulp7• 3 years ago

the politicians are constantly trying to weaken or eliminate that, plus trying to mess with your pension which is practically the only attractive thing about those jobs... so, no fucking wonder, really.
Recent wage inflation has made all this stuff worse by making unresponsive government pay scales far less attractive than market-driven wages elsewhere, so systems and offices that were teetering before are now falling over.

These two are related. The pensions work for government workers because politicians get to advertise low taxes, voters get to enjoy lower taxes and punt the costs to future generations, and union bosses who are older, get to cash out before shit hits the fan (almost all governments have tiers of pensions, where older workers have more benefits than younger will ever have).

The solution is to get rid of ALL deferred compensation. Government pays employees the same as private does. No more muddying the waters with understated liability numbers and underfunding for deferred compensation. Then government can match wages in real time.

ryanwaggoner• 3 years ago

I couldn't believe this is true, so I actually read the article. Turns out, it's not true. It's multiple orders of magnitude off.

There were 15 inspectors for the city (not county) of LA when this article was written:

"In order to be up to code, each of the 20,974 elevators in the city of Los Angeles needs to be checked once a year.

But there are only 15 inspectors to do it."

Roughly half of the elevators were past due, which means they were inspecting 10k+ elevators per year just in the city of LA, let alone the entire state.

karaterobot• 3 years ago

Seems like the off the cuff guess about the numbers is wrong, but the actual point they were making remains valid.

ineedasername• 3 years ago

...also due to government related staffing issues and bureaucracy. Most people are describing more complex building codes, so I'll add something new.

The two are interrelated. There'd be a lot less opportunity for error if building codes were cut in half. For example where I live there is a fair bit oil heating & therefore underground oil tanks. Building code requires that upon switching to something else, like natural gas, the submitted plans must include information about the planned removal or decommissioning of the tank.

This wasn't always a requirement, but now that it is that means someone has to check the plans to make sure that requirement is met. So, bureaucracy and building codes go hand in hand.

Of course in the case of residential oil tanks remaining in the ground, or not being properly decommissioned, there it can cause a variety of problems. Water contamination for example, a major concern for abandoned tanks in any area where residential well water is common. (and for other reasons)

I'm not arguing that bureaucracy as it exists is at all a model of efficiency, but you can't examine or solve that problem without understanding how we got there.

nocoiner2• 3 years ago

When you say the deal will lose money, do you mean that (1) the project’s operating expenses exceed its income, (2) the building can’t be satisfactorily recapped after completion/stabilization, (3) the MOIC at exit will be less than 1.0x, (4) the investor won’t receive their full preferred return or (5) the sponsor won’t earn any promote?

I could see any of these as being a way to describe a deal that “loses money.”

eagleinparadise4• 3 years ago

I was modeling a 2-3% IRR on aggressive numbers when I last worked on it. It was acquired with a proforma 18% IRR. Whenever it's sold, it's going to return less than 1.0x. Not sure how bad the loss will be.

Even if it is recapped, the deal will require a significant cash-in refinance. If the business plan is saved and it takes you another 4 years to exit at a better number, that 4-yr now 8-yr deal results in say a low single digit IRR. Sponsor makes no money and the project sucks up even more resources & labor. But depends if your capital partner is willing to ride it out and if you can even recap where the numbers work

winrid2• 3 years ago

I think we are focusing too much on the individual worker and not the process/new building laws/bureaucracy that is slowing us down.

Dig1t• 3 years ago

Speaking specifically about the construction industry in California, because I am very familiar with that topic:

Labor is less skilled, because of huge supply of undocumented workers.

Also building codes and requirements for building safety have increased tremendously. Building a house in CA is WAY more complex than it used to be, since there have been so many requirements added to building codes over the years. Arguably CA houses are better built than they used to be, but the flip side is that it takes more time and experience to build one correctly.

parineum3• 3 years ago

Arguably CA houses are better built than they used to be

This is inarguable. The aftermath of the major earthquakes of the past have had an very noticeable effect on building safety and the effect on damage done has been measurable. I can't imagine there aren't similar trends in other places for their own local natural disasters.

tonymet2• 3 years ago

Does any government office work on efficiency? I can think of local , state, federal offices working to slow things down, but none working on speeding things up.

pixl9711• 3 years ago

Standards across the industry in theory should increase efficiency. Problem is homes are highly customized quite often.

Add to that home building is very boom/bust. The county I live in currently has 1900 homes in progress. A year from now if the market goes down that number could be 100. Trying to scale things that have regulated and licensed inspections is massively difficult. And the answer is not let the builder do whatever because whatever almost always equals screwing the buyer.

tonymet2• 3 years ago

that's not universal, some will slow things down and some may speed things up.

tomrod2• 3 years ago

Worker productivity is meaningless if the secular trends (read:code requirements) increase in complexity over time.

This analysis approach and outcomes are garbage, in my professional opinion. While I generally appreciate Dr. Goolsbee's research, here the causality as presented here is seriously off.

The assumption is that the productivity has decreased. However, the factors of this aren't a shift in the supply curve, but rather an increase in labor supply willing to perform the work more cheaply in real terms and increased complexity in construction codes. Add to that the actual materials have been engineered to improve productivity, and I think you have a complete picture.

It would be accurate to say the output of the median construction employer has changed, but that accounts all the above factors. What Goolsbee is claiming is that the productivity curve has decreased, and I don't think that is true.

s1artibartfast5• 3 years ago

I think it's an accurate way of looking at it but not the only one. Different company goes from making 10 widgets and 10 hours to One widget in 10 hours plus paperwork, that is a productivity loss in terms of widgets.

Sure, and entirely misses any difference in quality certification of the widget. However, the point that you are fewer widgets per hour still stands. It is a starting point for further questions. For example, Do you really need all that paperwork for the widgets?

In this case the analysis was conducted on housing square footage built and we are building less per hour. If we accept that we can ask further questions.

tomrod2• 3 years ago

The issue is the attribution. Here, workers are attributed (even at a high level, consider the title). But it's not the workers, it's bad policy and bad management.

bradwood• 3 years ago

Safety standards have also improved which I expect has had a negative impact on productivity.

Remember this? https://static01.nyt.com/images/2012/11/11/arts/11LUNCH1_SPA...

patientplatypus• 3 years ago

This isn't all that surprising. I mean, it's surprising a priori, but not post hoc when considering the social culture of the United States.

Construction is a job that you go into if you've been to prison, haven't gone to college, or are an undocumented laborer. It attracts those people who are the least skilled in the country because it's a hard job that's hard on your body, pays little, and is intellectually uninteresting (compared to most college educated middle class jobs). The people who make money in the industry have to go through onerous licensing requirements and have the skills necessary to run their own business and take on the risks of having that business fail, which most people (myself included) don't have. That's managing payroll, licensing, taxation (and avoiding taxation), sales, marketing, and all the rest of it while still being able to be a master plumber or what have you which can take 10 years or more. And even then you can be making 70+ hours a week or have to be on-call for emergencies (as a plumber), only be able to get work during certain times of the year (summer for a large amount of construction), or be away from home for long periods of time (if you have a specialized skill such as oil drilling or specialized skills in setting concrete and so forth and have to travel across the country to where the work is).

I've worked day labor in construction. After only a few months my hands are messed up to the point where some days it hurts to type after longer periods of time. Have you ever had to carry dry wall, lumber or sheet rock for 8 hours a day for minimum wage? It's boring and it hurts.

I'm currently unemployed and homeless. I'd rather be unemployed and homeless than do construction again. A year of that and my body would fall apart.

As a society we've made the industry as unattractive as possible so what do you expect?

bnolsen• 3 years ago

Building techniques haven't really improved much (steel framed houses go up faster, use less materials and are cheaper). I guess tools side stepped, with battery operated tools being about like air tools for efficiency. Why the drop otherwise?

rcme• 3 years ago

How do you measure the value add of a full-time construction worker?

TimPC• 3 years ago

I think you have to find a measure that looks at build times for apples to apples projects. It’s entirely possible more fine-detail work goes into the excessive amount of luxury units we now build and that this time consuming work explains a large portion of the effect. We can also look at regulations that improve safety and see that they slow down labour productivity as well. Not saying we should get rid of those regulations just saying they explain some of the decline.

bparsons• 3 years ago

It is called occupational health and safety rules. You can't (legally) work people to death anymore.

intrasight• 3 years ago

I still say measurement/approach error.

The article defines productivity as "value add per unit of input".

The only measurement of "value add" that makes sense it the sale price. Given how high are those prices are, I don't see how "productivity" could not be super high.

shadowtree• 3 years ago

Pretty sure worker health has improved - so this is OSHA making sure you have proper safety procedures, staffing, gear ... which all makes slapping together the Empire State Building in a little over a year now impossible.

Which is a good thing!

Watching the videos touring China skyscraper build quality makes you appreciate building codes in the West as well.

The strange and awful path of productivity in the US construction sector

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