The US hasn't forgotten. Nor is this unique to the US. It seems to be a widespread issue in the developed world.
The problem is that labour is simply too expensive now. And, to a lesser, extent, so is real estate.
In the 2000s Australia experienced an unprecedented resources boom fuelled by China's growth. This especially impacted Western Australia and Queensland. WA in particular is rich in iron ore, oil and gas and other resources.
In Perth in 2000 you could buy a 70s 3 bedroom house within a few miles of the city center for <A$100k. By 2005 it was $350k. Capital projects for the resources industries were in the works amounting to over A$100B. All of these have a huge construction component that soaked up the construction supply.
In the 90s you could build a house in as as little as 3 months. From the early to mid 2000s that time frame is now closer to a year and costs 5 times as much.
So homes became much more expensive. Of course building commercial and industrial property also got more expensive. Property costs are a significant input cost into any business that operates there. Increased residential costs soak up disposable income and lead to wages growth. Increased wage costs makes things more expensive and the cycle continues.
So Perth transformed in the 1990s from a city that was very affordable with a good standard of living to one of the haves and have nots. The haves are those in the construction and resources industries. They were making crazy money. Everyone else was pretty much a loser.
Arguably this is dutch disease [1].
So now the city wants to do things like build train lines. Well labour is stupidly expensive because the cost of living is so high and buying up real estate to put said train line on is also super expensive.
A lot of people don't seem to feel this because they're incumbents (ie they bought their houses 15+ years ago). Others have immigrated so have foreign money bypassing the local economy.
So look at the Second Avenue Subway as one example. $17B for a few miles of tunnels? Really? Well that's the cost of labour in the US and real estate in Manhattan. Since it's underground I don't imagine a large percentage of the total cost is real estate either.
So it seems like when a lot of this infrastructure was built, the relative cost of labour was much lower. The standard of living was also much lower, apart from the 1950s and 1960s, which can be viewed as a transitional anomaly more than a normal equilibrium.
The article specifically claims labour costs aren't that much more than in other locations, Japan in particular. Certainly not enough to explain the huge differences in project budgets.
I read that in the article too. But, I still wonder: could it be that the annual salary of a worker is not the end of the story? In other words, if the process is so slow in the US, and an American project takes 2 years instead of 1 year (for a comparable Japanese or French project), then costs are effectively double.
Also, I don't think the article mentions the benefits costs: healthcare and pension costs for government and union workers in the US are higher than in other countries.
Increasing costs would not be terrible if access to money increases at least as much. The problem we have is that the haves are walling themselves off from the have-nots, in the name of preserving quality of life. The cost of the materials and labor are actually a tiny fraction of the cost of building anything in the US.
The problem is that labour is simply too expensive now. And, to a lesser, extent, so is real estate.
In the 2000s Australia experienced an unprecedented resources boom fuelled by China's growth. This especially impacted Western Australia and Queensland. WA in particular is rich in iron ore, oil and gas and other resources.
In Perth in 2000 you could buy a 70s 3 bedroom house within a few miles of the city center for <A$100k. By 2005 it was $350k. Capital projects for the resources industries were in the works amounting to over A$100B. All of these have a huge construction component that soaked up the construction supply.
In the 90s you could build a house in as as little as 3 months. From the early to mid 2000s that time frame is now closer to a year and costs 5 times as much.
So homes became much more expensive. Of course building commercial and industrial property also got more expensive. Property costs are a significant input cost into any business that operates there. Increased residential costs soak up disposable income and lead to wages growth. Increased wage costs makes things more expensive and the cycle continues.
So Perth transformed in the 1990s from a city that was very affordable with a good standard of living to one of the haves and have nots. The haves are those in the construction and resources industries. They were making crazy money. Everyone else was pretty much a loser.
Arguably this is dutch disease [1].
So now the city wants to do things like build train lines. Well labour is stupidly expensive because the cost of living is so high and buying up real estate to put said train line on is also super expensive.
A lot of people don't seem to feel this because they're incumbents (ie they bought their houses 15+ years ago). Others have immigrated so have foreign money bypassing the local economy.
So look at the Second Avenue Subway as one example. $17B for a few miles of tunnels? Really? Well that's the cost of labour in the US and real estate in Manhattan. Since it's underground I don't imagine a large percentage of the total cost is real estate either.
So it seems like when a lot of this infrastructure was built, the relative cost of labour was much lower. The standard of living was also much lower, apart from the 1950s and 1960s, which can be viewed as a transitional anomaly more than a normal equilibrium.
[1] https://en.wikipedia.org/wiki/Dutch_disease