Thursday, January 11, 2018

Inefficiency, corruption, and anger over the Trump tax cuts

From the American Thinker comes a story about how workers on the New York subway system are making $400 an hour. That is likely not true. Let me explain by beginning with a quote from the article:
An accountant discovered the discrepancy while reviewing the budget for new train platforms under Grand Central Terminal in Manhattan.
The budget showed that 900 workers were being paid to dig caverns for the platforms as part of a 3.5-mile tunnel connecting the historic station to the Long Island Rail Road.  But the accountant could ... identify [only] about 700 jobs that needed to be done, according to three project supervisors.  Officials could not find any reason for the other 200 people to be there.
The likely explanation is that there are managers who have hired people that exist only on paper, and are redirecting the pay for those virtual employees to their own bank accounts. The Unions in New York guarantee that there will be employment for plenty of union workers, even if there are no jobs:

The estimated cost of the Long Island Rail Road project, known as "East Side Access," has ballooned to $12 billion, or nearly $3.5 billion for each new mile of track – seven times the average elsewhere in the world.
Along with interviews with contractors, the documents reveal a dizzying maze of jobs, many of which do not exist on projects elsewhere.
There are "nippers" to watch material being moved around and "hog house tenders" to supervise the break room.  Each crane must have an "oiler," a relic of a time when they needed frequent lubrication.  Generators and elevators must have their own operators, even though they are automatic....One part of Local 147's deal entitles the union to $450,000 for each tunnel-boring machine used.  That is to make up for job losses from "technological advancement," even though equipment has been standard for decades.
Then there are the token clerks in the ticket booths who earn an average of about $112,000 a year, even though 83% of all subway fares are sold by machines and workers in ticket booths have nothing to do most of the time and are prevented, by union rules, from helping out in any other part of the station. You see, the ticket booths are run by the station department, and the platforms and trains are run by the transit department. Employees of one department are not permitted to work in another department's area.

The state of New York pays some of the highest taxes in the United States. They then were able, under the previous tax rules, to write off those taxes and reduce their Federal tax burden. In other words, you pay more in Federal taxes so that New Yorkers can pay people six figures to sit on their asses and do nothing all day. Now people in New York are upset at the Trump tax plan, because they say it is unfair to them.

I had problems with the Trump tax plan, because the original plan added tens of thousands of dollars to my tax bill. That appears to have been fixed in the final plan, with the final plan appearing to cut my taxes by about $15,000. We will see next year when it is time to file.


SiGraybeard said...

The article on that dig which I read said the $400/hour was overtime and weekends. I think normal time was $115/hour.

Where I last did this, we used 2080 hours as one year (40 hours/wk for 52 weeks) and then took 80% of that for what to really expect. At 2080 hours, $115/hr is $239,200/year.

That may not be the real wage, though. That might include benefits and other overhead. It would be the amount the city was billed per hour, not what the guy grosses on his paycheck.

Divemedic said...

That is still insane. In my neck of the woods, $115 an hour is what doctors are making.