Hurricane Damage, Shoddy Work, and the Levees of New Orleans

While reading the newspaper one day last week, I came across a story claiming that a major reason for the failure of the levees in New Orleans was shoddy work and skimping by the contractors who built them. My initial reaction was, well, what did anyone expect? After all, isn’t that the American way?

Here in Texas it is common to see repairs being done on highways that were recently built. Often, within the first year after being opened for use, parts of them have to be closed for major repair. But the contractors who built these highways are never tasked with repairing them at their own expense. Shoddy work has become the American standard, and it generates no penalties.

All of this reminds me of an incident that happened a decade or so ago when a major hurricane blew through Miami, doing considerable damage. From the inspections that took place in the aftermath, it was discovered that the builders of many of the very expensive homes which were destroyed had allowed such shoddy work that roofing nails never made it into the rafters. It doesn’t take much wind to blow off a roof that has not been nailed down.

I had a friend living in Miami at the time, and in a conversation  about this kind of damage, I said, “That’s the price we pay for having destroyed the craft unions.”

Americans have bought into the notion that unions are bad for the economy. They base this notion on the perception that unions raise wages and therefore raise prices.  This is a fallacy, of course, since production costs often play no role whatsoever in pricing decisions. The pricing maxim has always been charge whatever the market will bear. So keeping costs low doesn’t mean that prices will be low; it may merely mean that profits are high.

Unions, especially the craft unions, did far more than seek higher wages for their members. These unions also upheld standards. Before being admitted into such unions, workers had to apprentice, they had to learn their trades. By destroying those craft unions, we have lost all control over standards. Today, a person who has never built anything in his life can buy a pickup truck, a box full of tools, and go into business as a carpenter.

We often believe that inspections can be used to maintain standards, but that is foolhardy. For even if an inspector were at every job site during every working hour, he could not observe everything, and, of course, putting inspectors at every construction site is impossible to begin with.

So what did destroying the craft unions accomplish. There is no proof that it ever lowered the price of a single product. It  created a wide open opportunity for fraud, and it eviscerated the working standards of craftsmen. Now isn’t this something we all should be proud of?

Could a reintroduction of craft unions reverse this result? Well, perhaps, but not easily, for just as it is very easy to dumb down a people, it is very difficult to smarten them up, so too it tearing down standards is easy while building them up is not. And now that shoddy work has become the American way, it would take a massive effort to change the way things are.

The lesson to be learned from this is simple. Sometime the effects of bad decisions and policies can never be reversed, so we need to think more carefully about the decisions we make and the policies we put into practice, since these decisions and policies may very well be our undoing.

I don’t see anybody engaged in such thought today. I shudder to see what tomorrow will be like.