I enjoy reading your blog. I grew up working construction side jobs alongside my dad who worked a full time, low paid, housing construction job. By the time I was older he had moved on to working for large maintenance contractors.
It seems to me that his original employers (in the 1980s) had little regard for the burnout of their employees and they were able to get away with low pay for very hard work. He was fortunate to move on to the larger companies who provided better pay and benefits while allowing for a safer and less intense work environment.
Many construction jobs still require roughly the same amount of physical work by laborers, but I think the expectations of the employees and requirements on employers have changed dramatically in the last hundred years (even just the last 40). Back when the Empire State building was constructed, laborers were expected to work harder with less safety restrictions.
One thing that I think is probably helping the employers at smaller construction firms is the supply of illegal immigrant labor. These laborers can be in a situation where the employers can hold them to lower standards of safety and pay that would be expected by the legal workforce. I also wonder about how accurately, if at all, this labor is recorded in statistics.
I'm sure you have already considered this at some point. Maybe you could send me a link to that article.
You're often (and often rightly) critical of Western commercial interests who say things like "your country/city sucks at X" in service of extracting additional subsidy slops from the public trough.
Why you can't apply any of that same skepticism to anything even peripherally related to China is and always will be a mystery to me. China is a literal forest of GIGO problems as far as the eye can see, and yet your entire worldview is underpinned by the need to uncritically accept the inputs despite even the Party-State knowing they're garbage.
When Chang says construction in the US costs many times as much as in Taiwan, it's because TSMC has every incentive in the world to overstate the difficulty and cost of doing business in the United States to ensure it wrings every possible cent of subsidy and tax break money from federal, state, county, and local sources, and that is exactly what it's doing, in time-honored tradition. Japanese car manufacturers did the same when they built plants in the US, Samsung is bitching in the same way, VW makes similar complaints regularly.
BASF, VW, Ford, Tesla, Foxconn, and *everyone else* do the same when operating in China, because China has vast, vast subsidies, tax breaks, and implicit transfers up for grabs. Moreover, Chinese firms set provincial, city, and county governments at one another's throats with slanted analysis of "competitiveness" for the same reasons.
It is an entirely rational business strategy to rent-seek in this manner. It is profoundly ill-advised for critical observers to accept these statements at face value.
None of this really revolves around whether firms are or are not productive, it's playing politicians in location A versus location B off against each other, normally with "jobs" as the selling point. There's a large literature on this in regional science, and a couple book-length case studies for the auto industry in the US. I've written about how auto plants are dispersed across provinces in China, in apparent direct contravention to central government policy. Japan delegates very little discretion to prefectures and cities, but even there local governments have some ability to come up with perks, I spent time in industrial parks and they have their own tales of how they got the big plots of land, ditto for housing developments (danchi).
I mean… if this is a real question then *obviously* yes.
There are plenty of interviews in trade publications about topics Chang actually knows about, which don’t include construction in any real measure.
If you were serious you’d approach Brian about interviewing an operations VP or senior process lead at one of the large construction SOEs in the Mainland.
I enjoyed the article, you write really detailed and informative analyses. I often wonder whether we are building less homes (residential unit per capita) when compared to the past and in which cities are doing the worst and which are doing the best. I think that will make a great topic for an article in your blog!
P.S. There's a charming movie Men at Lunch about tracking down the photographer and the guys in that photo of construction workers eating lunch on a suspended girder. If you come across it, it's worth watching.
I took a look at the numbers for the Time Warner Center on Columbus Circle. It has about the same square footage as the Empire State Building, 2.7 million, but it's only 750' tall with 55 floors. It has two towers like the old World Trade Center. The building was started in 2000 and topped out early in 2003. Allow some time for the foundation work and it works out that the steel frame took about 3 years to build, about the same as the World Trade Center. That's gives us 2500 square feet per day, so, not very impressive. It contained 27,000 tons of steel, so that's 24.7 tons of steel a day. Again, not impressive. They had four cranes working, so it may be even less impressive. All told, they used 100,000 cubic yards of concrete as well. The building used a lot of reinforced concrete rather than simply building a steel frame. It's one of the larger buildings built using that system.
I'd be curious how to measure the costs and benefits of increased worksite safety -- maybe the crane doesn't lift as quickly and clipping into and out of restraining systems happens on the clock, but do workers miss less time due to injury? Do they have measurably longer careers? This could increase the 'workforce efficiency' of the sector -- employing fewer different individuals over the course of a project to complete the same number of hours of labor, say -- without showing up as balance-sheet productivity.
I enjoy reading your blog. I grew up working construction side jobs alongside my dad who worked a full time, low paid, housing construction job. By the time I was older he had moved on to working for large maintenance contractors.
It seems to me that his original employers (in the 1980s) had little regard for the burnout of their employees and they were able to get away with low pay for very hard work. He was fortunate to move on to the larger companies who provided better pay and benefits while allowing for a safer and less intense work environment.
Many construction jobs still require roughly the same amount of physical work by laborers, but I think the expectations of the employees and requirements on employers have changed dramatically in the last hundred years (even just the last 40). Back when the Empire State building was constructed, laborers were expected to work harder with less safety restrictions.
One thing that I think is probably helping the employers at smaller construction firms is the supply of illegal immigrant labor. These laborers can be in a situation where the employers can hold them to lower standards of safety and pay that would be expected by the legal workforce. I also wonder about how accurately, if at all, this labor is recorded in statistics.
I'm sure you have already considered this at some point. Maybe you could send me a link to that article.
Thanks again for the interesting content,
Ask Morris Chang for a guest post! TSMC is right in the firing line, with unique experience abroad.
You're often (and often rightly) critical of Western commercial interests who say things like "your country/city sucks at X" in service of extracting additional subsidy slops from the public trough.
Why you can't apply any of that same skepticism to anything even peripherally related to China is and always will be a mystery to me. China is a literal forest of GIGO problems as far as the eye can see, and yet your entire worldview is underpinned by the need to uncritically accept the inputs despite even the Party-State knowing they're garbage.
When Chang says construction in the US costs many times as much as in Taiwan, it's because TSMC has every incentive in the world to overstate the difficulty and cost of doing business in the United States to ensure it wrings every possible cent of subsidy and tax break money from federal, state, county, and local sources, and that is exactly what it's doing, in time-honored tradition. Japanese car manufacturers did the same when they built plants in the US, Samsung is bitching in the same way, VW makes similar complaints regularly.
BASF, VW, Ford, Tesla, Foxconn, and *everyone else* do the same when operating in China, because China has vast, vast subsidies, tax breaks, and implicit transfers up for grabs. Moreover, Chinese firms set provincial, city, and county governments at one another's throats with slanted analysis of "competitiveness" for the same reasons.
It is an entirely rational business strategy to rent-seek in this manner. It is profoundly ill-advised for critical observers to accept these statements at face value.
None of this really revolves around whether firms are or are not productive, it's playing politicians in location A versus location B off against each other, normally with "jobs" as the selling point. There's a large literature on this in regional science, and a couple book-length case studies for the auto industry in the US. I've written about how auto plants are dispersed across provinces in China, in apparent direct contravention to central government policy. Japan delegates very little discretion to prefectures and cities, but even there local governments have some ability to come up with perks, I spent time in industrial parks and they have their own tales of how they got the big plots of land, ditto for housing developments (danchi).
All I ask is a guest post from Morris. Is that too much?
I mean… if this is a real question then *obviously* yes.
There are plenty of interviews in trade publications about topics Chang actually knows about, which don’t include construction in any real measure.
If you were serious you’d approach Brian about interviewing an operations VP or senior process lead at one of the large construction SOEs in the Mainland.
Of course, you’re not.
I enjoyed the article, you write really detailed and informative analyses. I often wonder whether we are building less homes (residential unit per capita) when compared to the past and in which cities are doing the worst and which are doing the best. I think that will make a great topic for an article in your blog!
P.S. There's a charming movie Men at Lunch about tracking down the photographer and the guys in that photo of construction workers eating lunch on a suspended girder. If you come across it, it's worth watching.
I took a look at the numbers for the Time Warner Center on Columbus Circle. It has about the same square footage as the Empire State Building, 2.7 million, but it's only 750' tall with 55 floors. It has two towers like the old World Trade Center. The building was started in 2000 and topped out early in 2003. Allow some time for the foundation work and it works out that the steel frame took about 3 years to build, about the same as the World Trade Center. That's gives us 2500 square feet per day, so, not very impressive. It contained 27,000 tons of steel, so that's 24.7 tons of steel a day. Again, not impressive. They had four cranes working, so it may be even less impressive. All told, they used 100,000 cubic yards of concrete as well. The building used a lot of reinforced concrete rather than simply building a steel frame. It's one of the larger buildings built using that system.
Great write-up Brian, really enjoying these construction deep dives.
I'd be curious how to measure the costs and benefits of increased worksite safety -- maybe the crane doesn't lift as quickly and clipping into and out of restraining systems happens on the clock, but do workers miss less time due to injury? Do they have measurably longer careers? This could increase the 'workforce efficiency' of the sector -- employing fewer different individuals over the course of a project to complete the same number of hours of labor, say -- without showing up as balance-sheet productivity.