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Honolulu Rail Sold to City Council, Public, on Jobs Boost, But Will the Promise Hold Up?

City's rail rendering

BY MALIA ZIMMERMAN - Jobs, jobs, jobs - Honolulu City Council Member Tulsi Gabbard asked questions at Wednesday's Honolulu City Council meeting that Hawaii Reporter and many others have asked the Honolulu Authority for Rapid Transportation (HART) and the city administration for months:

Should the rail be built, how many jobs will be created by the city's planned 20-mile, $5.3 billion elevated steel on steel rail project, what kind of jobs are they, and will they go to local workers or out of state or country?

HART executive director Toru Hamayasu repeatedly said in recent city council hearings between 4,000 and 17,000 jobs will be created by the rail construction - and he claims 90 percent will go to local workers.

Asked for more details, HART spokesman Scott Ishikawa told Hawaii Reporter in an October email"We have always said 10,000 jobs a year on average would be attributed to rail construction, with half of those jobs being in the construction field, and half would be indirect jobs in other sectors."

He added: "City’s job projection of about 10,000 jobs a year on average during rail construction was based on construction cost estimates and state-specific job multiplier formulas."

On Friday, Ishikawa explained more jobs are generated during the construction years than during the planning phases and the overall yearly estimate is roughly 10,000 each year – with peak construction years hitting more than 17,000.

The city’s job estimates, he said, were compiled using an economic model from the U.S. Department of Commerce’s Bureau of Economic Analysis.

"The widely-used model, known as “RIMS II” (Regional Input-Output Modeling System), is used to assess the economic impacts of a broad range of public and private projects, policies and events. The City’s job figures have been accepted by the Federal Transit Administration," he said.

Other than a model, neither HART, nor the city administration, has been able to produce any details to prove the estimate is correct and up to date, other than what is listed in the city's Environmental Impact Statement, nor have they released any specific job titles, salaries or schedules (see http://www.honolulutransit.org/baf/final_eis_04_part4.pdf page 4-201, with table 4-35 for what was said in the EIS).

That document simply says:

click on image to enlarge

 

That links to this chart, showing job estimates

According to the count, the project should have already created 3,183 jobs in 2010, 8,209 jobs in 2011, and 11,680 jobs in 2012. So far, the only jobs made public are 350 for Kewitt construction,  289 for Alsaldo and 82 at the city's HART office. HART is increasing its employee count to 142 people in the next fiscal year, according to Hamayasu's recent statement to the city council.

Accuracy matters, rail critics say, because the state’s biggest ever public works project is being sold to the public on the basis that it will create jobs and boost the economy.

But in an email, Scott Ishikawa said in October the information Hawaii Reporter seeks is proprietary:

"Not sure if we can provide a breakdown as you requested. Unlike direct government jobs, which can provide the number of positions and/or position salary, government contracts with private entities or companies do not necessarily list those. Staff positions and salaries are determined internally by the private contractor and are considered proprietary information."

Ishikawa said, along with the staff to be hired directly by the construction contractor Kiewit, the rail car designer and operator Ansaldo, and other project contractors, "that figure also does not include numerous subcontractors, building suppliers and other support staff hired or to be hired by the contractor as the construction work increases over the coming years."

"The City’s rail job projections listed in the EIS are actually in sync with two other job studies done independently by The Economic Research Office at the University of Hawaii (UHERO) and Pacific Resource Partnership," Ishikawa said.

Pacific Resource Partnership, a membership group that advocates on behalf of construction unions, which Ishikawa said backed the rail construction job count, is a partner with the city on the rail project, and has recently sought to intervene in a federal lawsuit challenging the accuracy of the Environmental Impact Statement on the city's behalf.

In terms of UHERO's estimates, Carl Bonham, an economist at the University of Hawaii Economic Research Organization, said in an email to Hawaii Reporter today its report does not actually detail the number of rail related jobs. Instead the UHERO report said:

"The construction job count, which averaged 28,500 in 2011, will rise above 29,000 this year and to nearly 36,000 by 2015 when both rail and the next housing upswing will be pushing activity."

Bonham told Hawaii Reporter today: "The change from 2011 to 2015 of 7,500 jobs comes from all forms of construction activity.  We do not in our March 16, 2012 forecast break out a number for jobs attributable just to rail."

Ishikawa confirmed his reference is to last year’s UHERO report (page 5 in link below).

University of Hawaii Engineering Professor and transportation expert Panos Prevedouros said back in 2009, UHERO provided some rail jobs estimates that said employment will start with 300 jobs, and at the peak of construction, there may be 2,000 jobs, but at that time UHERO did not know that a $1.4 billion contract to build the rail cars would go to Ansaldo Breda in Italy.

"HART's estimates are simply baseless and misleading," Prevedouros said.

Specifically, Prevedouros points out:

  • Material costs are not jobs and most materials like steel, concrete and glass will be imported, thus those jobs are not local.
  • Finance charges are not jobs.
  • Equipment and outside purchases are not jobs in Hawaii. These will be a huge portion from trains, escalators and elevators to tickets, bolts and nails.
  • Also many large and "linear" infrastructure jobs like the rail are of a "copy-paste" nature, that is, the people who build the first mile will also build the second mile, etc."

"Worse yet, tax-based infrastructure development causes major job losses because the taxes taken from people to build the rail were not spent elsewhere in the economy," Prevedouros added. "If infrastructure projects can be made with all-local materials and labor, then they simply circulate monies in the same market (Oahu in this case) but they do not create real growth. Rail, unfortunately, uses so many imported components and expertise that local taxes will be exported in the billions of dollars, so its net effect will be strongly recessionary."

Retired Judge and City Council Chair Walter Heen, former Gov. Benjamin Cayetano, Retired businessman Cliff Slater, University of Hawaii Law Professor Randall Roth, Dr. Michael Uechi, Hawaii's Thousand Friends and the Small Business Hawaii Entrepreneurial Education Foundation filed a lawsuit in May 2011 challenging many aspects of the city's EIS.

In an editorial, four of the plaintiffs - Cayetano, Heen, Roth and Slater - criticize the city's jobs forecasts, saying as Mark Twain did they are "lies, damned lies, and statistics" because they are based on a modeling program which does not identify what the jobs are.

"The forecast ignores, for example, that $1.4 billion paid to Ansaldo would probably create far more jobs in Italy than in Hawaii. Billions more would be paid to other companies headquartered outside Hawaii. A British company, Parsons Brinckerhoff, already has contracts totaling $486 million. That company has a great deal of experience with rail projects outside Hawaii, and none in Hawaii. How much of its $486 million do you suppose will be paid to construction workers and others in Hawaii?" they wrote.

The city's forecasting also does not take into consideration the jobs that would be lost if $4 billion is taken out of the private sector in the form of higher taxes to pay for the rail project, as is currently planned, the plaintiffs wrote.

Sumner La Croix, a University of Hawaii economics professor, backs their claim, saying: "The rail tax will lead to job losses in other sectors of Hawaii's economy for the next 11 years, and those losses will at least partially offset any gains generated by the rail project."

The city also is ignoring the jobs lost at local businesses along the rail line because of construction disruption, the plaintiffs said, "which would be virtually unreachable, or parking would be significantly reduced, for months at a time."

Like the Honolulu City Council, Hawaii Reporter is awaiting more details from HART on the job count, what kinds of jobs will be created, and when.

Short URL: http://www.hawaiireporter.com/?p=47500

1 Comment for “Honolulu Rail Sold to City Council, Public, on Jobs Boost, But Will the Promise Hold Up?”

  1. Whether or not there are jobs created is irrelevant when the project itself is ill-advised. The government should not be in the business of spending billions of dollars on a project which will be a blight on our beautiful island in order to put carpenters, masons and contractors to work. The jobs created in this way will give a temporary boost to the income of these workers. But, the ugly guideway will remain for decades.

    If we do not have a viable economy, what will these workers do after this project is completed? Lobby (bribe) their legislators for more unnecessary public spending?

    If there is a worthwhile project and there are local jobs created, that is a good side effect. This mess does not qualify as such an undertaking.

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