California High Speed Rail Project's Odd Labor Costs

In 2008 state voters approved the California High Speed Rail Project that would build tracks from Los Angeles to San Francisco for an estimated $33 billion.

But that estimate has been revised multiple times over with the newest 2023 estimate coming in almost $100 billion above that with no track yet to be laid and open questions about where the additional $100 billion would come from.

Based on recent reports, even the line closest to completion, the Bakersfield-Merced line, hasn’t completed its design, with the only finished segment being environmental approval.

According to a story from CNBC, $9.8 billion has been spent so far, with $1.3 billion solely going towards environmental review and 119 miles currently under construction, yet there are still open questions about how the whole project will be funded. Large portions of the project’s budget are funded through the state’s cap-and-trade program, where industries buy and sell carbon credits.

The project has tried to gin up support by promoting the number of jobs created—currently at 13,000, up from 2,000 five years ago. Another infographic estimates it provided 92,000 total job-years of employment and $7 billion in labor income since 2006.

But those numbers might not make any sense. It would be difficult to accumulate 92,000 job-years of employment if only 2,000 people were employed five years ago.

As an overestimate, if there were 2,000 jobs each year from 2006 to 2018, that would only get to 68,000 job-years—46,000 since 2018 plus 22,000 before that (2006 to 2018).

Massive Average Salary

Based on the $7 billion labor income total and 92,000 job-years, that works out to a surprising $1.3 million average salary per job.

Even if the jobs were split between lower wages ($50,000) and high wages ($2 million), to get to the $7 billion in labor income most of those jobs would have to pay millions per year.

Central Valley Labor Costs Are Minuscule

While the overall project’s labor costs appear gigantic, the breakdown of costs for the portion in the state’s Central Valley—the section in the rural, southeastern portion of the state going from Merced to Bakersfield—appear unreasonably small despite it being the closest to completion.

There, total labor costs have been $2.52 million for 41,510 job-years, or an average of $61 per job-year.