Panos Prevedouros, PHD

BY PANOS PREVEDOUROS PHD – Back in 2009, University of Hawaii Economic Research Organization 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 testified at City Council that the rail will create 4,000 to 17,000 jobs. These estimates are wrong if people believe that these are Hawaii-based jobs. Here is why:

  • 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 ticket machines, tickets, bolts and nails.
  • Also many large and “linear” infrastructure projects 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. There are no 10 groups of workers building 10 separate miles.

In sum, a very large portion of the $5.3 Billion pie is not labor related. The part that is labor is not very large for Hawaii because (1) a portion of the labor is outside Hawaii or imported expertise, and (2) linear infrastructure does not need a large number of workers. Therefore UHERO’s estimate that the maximum likely number of jobs is around 2,000 is the best answer. This makes Rail smaller in terms of jobs than Hilton Hawaiian Village. Of course the Village is a sustainable job supplier, whereas Rail is not.

It is also a fact that 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.

If infrastructure projects can be made with all-local materials and labor, then the projects simply circulate monies in the same market (Oahu in this case) but they do not create real growth. This circulation also has “parasitic losses” due to the bureaucracies involved and, on occasion, lawsuits and other penalties.

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.

Two years ago based on UHERO’s 2009 estimates of rail jobs I wrote the article Proposed Rail Creates 1,000 Local Jobs and Destroys 4,000 Jobs (the bold part is UHERO assessments):

UHERO estimates that first year rail construction job count will be about 360 jobs and only in peak years the construction job estimate will reach about 2,000 jobs. But most of them will be unsuitable for carpenters that are suffering the brunt of construction sector unemployment now. Also almost all of the rail construction materials and technology comes from off-island sources, so at best 1,000 of these jobs are local. The City estimates for rail jobs are false. They are advocacy estimates.

More on the rail jobs issue in Malia Zimmerman’s article Honolulu Rail Sold to City Council, Public, on Jobs Boost, But Will the Promise Hold Up? in the Hawaii Reporter

Comments

comments

2 COMMENTS

  1. Vegas Lite rail Cost 4 Billion 4 mile lite rail—–> Ridership —–> 50 Million in 5 years….. still Bankrupt…

    Ok——-> Hawaii 5 Billion —- 15 mile lite rail—no way—- I will ignore this part…

    Now that means… We need every resident to Ride the Light 50 times a year… to Break Even…

    if and only… they think they can build 15 miles for 5 Billion… when vegas only did 4 miles for 4 Billion…

    A remote pacific lsland… should be far cheaper… no skill workers or steel on island…… yeah right!

    Now… if you want to make some money…. buy options… on the Lite Rail Bonds…that they will goto to Junk Bond Status….

    Now You will make some… $$$$…I bet WallStreet… will!

    Replace—-> Las Vegas with Oahu… and that will be the Lite Rail Reality…

    Las Vegas Monorail files for Chapter 11 bankruptcy protection

    Las Vegas: Monorail ridership drops nearly 12%

    Las Vegas: Monorail bonds fall to “junk” status

    Las Vegas Monorail: “Woeful” ridership prompts financial jitters

    Las Vegas Monorail extension plans in doubt after FTA nixes funding

    Las Vegas Monorail: More technical limitations coming to light?

    Seattle and Las Vegas monorails reopen

    Las Vegas eyes light rail, other options for interurban service

    Las Vegas monorail…Shrink-wrap ads removed?

    Las Vegas Monorail shut down

    Las Vegas Monorail: Troublesome Technology in a Unique “Niche” Application

Comments are closed.