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by Panos Prevedouros

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.*

However HART testified at City Council that the rail will create 4,000 to 17,000 jobs. These estimates are flat out 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 this 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.

Panos Prevedouros is a member of the Grassroot Institute of Hawaii’s Board of Scholars.

Panos Prevedouros’ blog, which is from where this has been reposted (with permission), can be found at :http://fixoahu.blogspot.com

Panos D. Prevedouros, Ph.D. is a professor of traffic and transportation engineering at the Department of Civil Engineering, Univ. of Hawaii-Manoa since 1990. Panos graduated from the Aristotle Univ. of Greece in 1984, and with Masters and PhD degrees in 1990 from Northwestern Univ. (Evanston, IL), a leading academic institution in engineering and transportation. He chairs the Freeway Simulation Subcommittee of the Transportation Research Board. He was president of the Hawaii Highway Users Alliance from 2006 to 2008. Panos co-authored a Transportation Engineering textbook and over 100 reports and technical papers. He received the 2005 Van Wagoner Award of the Institute of Transportation Engineers. He co-organized the 1st International Symposium on Freeway Operations (ISFO) in Athens, Greece, and the 2nd ISFO in Honolulu in June 2009. Dr. Prevedouros served in the Transit Advisory Task Force in 2006 and in the Technology Selection Expert Panel in 2008 of the City Council of Honolulu. He ran for mayor of Honolulu in the 2008 elections and finished 3rd in the primary elections with 18% of the vote from a field of nine candidates.