What to do about labor costs

Back in February, I wrote about some ways of helping transit operations to become independent of government budget battles. In the comments, Christopher Parker wrote:

A lot really does come down to labor costs, which are a very significant amount of the expense of transit.

Christopher is quite right here, and this is a major issue. Transit systems in countries with low labor costs are able to operate more lines with less subsidy. Some have argued that transit will never be competitive with such high labor costs, blamed the transit workers' unions, and recommended finding a way to break the unions.

This is, of course, only one manifestation of the wider labor cost issue. Yes, with enough force we could break the unions, dismantle restrictive labor laws and bring labor costs down to the levels of Brazil or Thailand. But what would we really accomplish? A big part of what makes America (or France, or Japan) a nice place to live is that many people can make a decent living, with health care and a pension, without working seventy hours a week. We do not want to race to the bottom on this.

Our goal should be to accomplish what we want without compromising on labor standards. Like all workers, transit staff deserve enough money to pay the rent and support a family, plus decent health care and retirement benefits. They deserve to work reasonable hours under healthy, comfortable conditions. We should stand in solidarity with the bus drivers and train operators. We are all transit workers.

Actually, we are all transit workers, and that's part of the problem, as Christopher continues:

When you think about it, that's a serious competitive disadvantage because the perceived labor cost of driving is free.

What has happened over the past hundred years is that the government has effectively outsourced the bulk of passenger transportation to individuals and families. They pay much of the capital costs (roads and bridges, roads and bridges), and subsidize some of the rest (Detroit bailout, oil wars), and even pay some of the capital maintenance, which is essentially an operating cost.

The remaining costs (vehicles and their operation) is mostly provided directly by the consumer. This has always been true to some extent, but during the golden age of rail transport it was provided by corporations, usually private, but unionized with strict labor rules. Many of these have been taken over by the government, but unable to compete with the cheap labor of individual drivers, they have shrunken considerably.

Of course, there is no such thing as a free lunch, and we have paid dearly for the de-professionalization of driving. Car crashes are the ninth leading cause of death worldwide and climbing, and the leading cause of death among young people. Buses and trains do kill people, but at nowhere near that rate.

It's time to recognize that we can't get away from paying for well-trained, well-treated professional transit operators. Of course we should work to reduce scams like the golfing "disabled" Long Island Rail Road workers, and other wastefraudandabuse. But there's a limit to how much cost savings can be wrung from labor. If we try to save money by farming transportation out to unprofessional, poorly-trained individuals, or by ruining working conditions - or even by importing desperate immigrants - it will backfire, and we'll wind up dead or wishing we were dead.

As Christopher points out, this outsourcing of passenger transportation provides unfair competition to organizations that do treat their drivers right. If the "externalities" were not hidden - for example, if the cost of medical care for road casualties came out of the DOT's budgets, or if the states had to pay every driver a living wage for every hour behind the wheel - we'd see these costs brought under control quickly, and transit wouldn't look so expensive.