The Economics of Everyday Things - 97. Elevators

Episode Date: June 23, 2025

Americans take more than 20 billion elevator rides every year — and keeping them safe is an expensive proposition. Zachary Crockett makes small talk. SOURCES:Frank Christensen, president of the International Union of Elevators Constructors.Shannon Moore, service mechanic for the International Union of Elevator Constructors Local 8.Brian O'Connell, senior vice president of the Eastern U.S. at Otis Elevators.Stephen Smith, executive director of the Center for Building in North America. RESOURCES:"Elevators," by Stephen Smith (Center for Building in North America, 2024)."Elevator and Escalator Fact Sheet," (National Elevator Industry, 2020)."The Evolution of Elevators: Physical-Human Interface, Digital Interaction, and Megatall Buildings," by Stephen Nichols (Frontiers of Engineering, 2017).Lifted: A Cultural History of the Elevator, by Andreas Bernard (2014). EXTRAS:"Up and Then Down," by Nick Paumgarten (The New Yorker, 2008)."World's Tallest Towers."

A couple times a week, I step inside a metal box and push a button that seals me inside. Sometimes I do this with total strangers, and we rarely talk about it. We just stand in silence while a system of cables transports us up and down a concrete shaft. It's my four-story apartment building, and we are in the elevator. If your elevator works well, it's easy to take it for granted. But some people think about these machines all day. Yeah, we're not really seen until you know about us.

We're kind of like leprechauns in that way, right? You know, you're talking about elevators and you start seeing an Otis truck here and all of a sudden you're like, oh my gosh, they're everywhere. My name is Shannon Moore and I'm a service mechanic for the local eight Union elevator constructors. Moore is right. Elevators are everywhere. In the US, there are around a million of them, and 10,000 new ones are built every year. Manufacturing and installing all of these elevators is a lucrative industry. And behind the scenes, it takes thousands of workers

and, quite literally, tons of technology to make sure your journey to the top is a smooth one. to make sure your journey to the top is a smooth one. Elevators, I think, are a lot like Wi-Fi. You never hear anybody say, oh yeah, this signal's really great, but everybody notices when they're not working. For the Freakonomics Radio Network, this is the economics of everyday things. I'm Zachary Krocken.

Today, elevators. The earliest predecessors of elevators go back thousands of years. In ancient Rome, winches and counterweights were used to transport lions, wolves, and bears from underground tunnels into the Colosseum for gladiator battles. These systems were powered by animals or even people. Over the centuries, elevators evolved to be powered by steam and were used in factories during the Industrial Revolution. But when cables broke, the cabin would go crashing

to the ground, sometimes killing the people inside. In the 1850s, as freight elevators were multiplying, Elijah Graves Otis invented a safety brake that would catch an elevator car in place if the cables ever broke. It allowed people to ride in elevators without fear, and it forever changed city skylines. Because until then, all the action had been on the ground. If you think about that time period in the United States and New York City especially, the most valuable property was always on street level because you wanted to limit the amount

of stairs that you had to walk up. That's Brian O'Connell, Otis Elevator's Senior Vice President of the Eastern U.S. As there was broader urbanization, the elevator was a key driver in being able to continue to have more densely populated areas and expand that construction higher and higher. Today, Otis is the largest elevator company in the world. In 2023, they built around 20% of all new elevators, and they did service work on more than 2 million pre-existing elevators globally. Their fleet includes some pretty prominent real estate. In New York here, one of our marquee buildings is of course the Empire State Building,

but internationally we also have been a key part of the building of the Eiffel Tower, as well as the tallest building in the world, the Burj Khalifa in Dubai. The longest vertical distance scaled by an elevator is actually inside the ground. The Mpane gold mine in South Africa has cabs that plummet nearly one and a half miles, around three times the height of the Burj Khalifa. Others can reach speeds of 40 miles per hour. But O'Connell says the typical Otis client is much less dramatic. The average Otis customer, when you look globally,

is actually like a four or five stop, one unit job, whether that's residential or a small hotel. The elevators around you in daily life fall into two basic categories. You have hydraulic elevators, which use pressurized fluids and pistons to push a cabin up from below. And then you've got traction elevators that use rope or cables to pull a cabin up from above, like in olden times.

When a building wants to install a new elevator, the developer or architect on the project puts together a document specifying what the building needs. That specification will have an understanding of how many elevators are in the building. If we have any particular recommendations on the size of the cabs, how many people will fit in each elevator, and then how fast those elevators should go, depending on how quickly you want to move people in and around. Once the plan is set, manufacturers like Otis put in a bid to win the job. Once it's completed, you'll go into contract negotiation and then construction starts.

Construction for an elevator begins with the shaft. A general contractor builds out a massive vertical corridor through the floors using a strong material like concrete or steel. Once that's set up, an elevator installer starts on general assembly. The rails and brackets that guide the car are set in place.

A machine room is built to house the motor. And eventually, the cabin itself is loaded in. Then we'll of course go through a rigorous testing process to make sure that all the various safety layers that have been installed work correctly, that the car can run at its intended and specified speed, and then there's going to be a formal test usually with the code authority or whatever local authority would be there before we're

allowed to hand over the elevator. The typical European elevator comes in at three feet six inches by four feet six inches, just big enough for a wheelchair user and one extra person. But in the US, new elevators have to be big enough to fit a seven-foot stretcher and still have room for two more passengers. And that has a financial impact. The cost is wildly more here. An elevator in the United States costs three to four times as much to install as an elevator in Switzerland for a similarly sized building. That's Stephen Smith. He's the executive director of the Center for Building in North

America. It's a nonprofit that works to reform inefficient construction regulations. A new elevator to install in, let's say, a six-story building in the United States would be between $150,000 and $200,000. That's the labor and the materials to install the elevator in the shaft. On the margins, that additional cost means fewer elevators, particularly in smaller buildings. In a city like New York or Seattle, you're going to think twice about the cost to install it, the cost to maintain it, the cost in terms of space, because it occupies space in the building, but then can't be, you know, an extra bedroom, bathroom, closet, whatever.

Owners of buildings with existing elevators also have a decision to make. Continue investing in aging elevators that require ongoing maintenance, or spend the money to modernize them. Most of the money spent on elevators is actually not in installing new elevators. It's in service, maintenance, and what are called modernizations, which is essentially every 20 or 30 years,

you need to rebuild at least part of the elevator. These are much more bespoke projects. In New York, when you underwrite an affordable housing project, the city or state tells you to assume $7,500 per elevator per year in cost. Again, here's Otis' Brian O'Connell. That cost benefit discussion is really one of the most critical conversations that we have with our customers. Your particular building might have what we call a full maintenance

service contract, which basically means you pay X number of dollars per month, and no matter almost anything that goes wrong, it's the responsibility of the elevator service provider to fix it. Other people might have, you know, really base level service contracts where bigger repairs are things that they have to pay, and that might drive the conversation for modernization. Whichever way a building owner goes, he or she will need highly trained service people to keep things moving. Folks equipped to deal with a wide range of mechanical scenarios

whenever they show up for work. We encompass nine trades in one. I mean, carpentry, tile work, mechanics, electrical. It just keeps on going from there. That's coming up. Carpentry, tile work, mechanics, electrical. It just keeps on going from there. That's coming up. Shannon Moore's family has something of a legacy. I am a third generation elevator mechanic.

My grandfather, my father, my uncle, my brother-in-law, we're all elevator mechanics. More is based in San Jose, California, the state with the most people and the most elevators. As an active member of the International Union of Elevator Constructors, or IUEC, More currently works for Kone Elevators. It's one of the so-called Big Four, along with Otis, Schindler, and Tissenkrupp. So out of the four, I've worked for all four. That's incredible. How did you train for this job? All of our training is done on the job and through schooling provided by the union.

The rigorous training and highly specialized work make landing one of these union jobs a competitive process. But if you're one of the lucky ones, you'll begin your long trek to a career. The apprenticeship program is a five-year program. The first year you're considered a probationary, so you will be working on the job with a mechanic. You're essentially kind of like a shadow. You'll get to see the starting portion of putting together an elevator and assembling them. And then your apprenticeship classes. You know, all of the ladder safety, electrical safety, job site hazards and awareness

just to keep people alert as to what's around them that can possibly hurt them. You're going to learn your knots, square knots, bowline knot, everything that you're going to use in a construction job on a daily basis. They're going to want to make sure that when you're on the job site, you know, how to hook your fall protection harness up to one of the lifelines. The training protocol wasn't always so extensive. Back when I started off, you'd be lucky to have a hard hat coming onto a job site. That's Frank Christensen, the president of IUEC.

The union represents more than 30,000 elevator installers and mechanics in North America. I got in in 1979, so that's kind of telling you the whole day. You very rarely ever wore a harness when you walked on the job. I remember walking a plank over to the cables on the other side that might be 40 floors up without a cable holding on to me. But that's what you did back then. That was stupid. FALLS ARE THE MOST COMMON CAUSE OF ON-THE-JOB FATALITIES In his tenure, Christensen has pushed to address this. When I first took office in 2012, I was having six to eight fatalities a year,

which is quite a bit. Now we've went two and a half years without a fatality because we've taken a different stance on safety. There's a lot of pinch points, a lot of potential for moving objects. So you have to be very aware of where you are, where your body is, what you're working on, where the potential for movement is, is the circuit that you're working on live, can you work with it with the power off? Do I need to write a job hazard analysis to let my supervisors know that this is a potential issue that we should be facing moving forward on service. There's a lot to take into account

before you even start working on an elevator. After the five-year apprenticeship, you take a test to become a state licensed elevator mechanic. The median salary for a licensed elevator and escalator mechanic is now more than $100,000. And workers get a pension, annuity, and other benefits. For Shannon Moore, another perk of the job is the opportunity to nerd out.

You have the groundwork to actually go out there and solve the problems of what's wrong with the elevator. Each company has their own way of writing out their schematics for their wiring diagrams, but sometimes you don't have the prints and then you become like a Sherlock Holmes trying to figure out where the problem is in the sequence of steps that the elevator needs to run. Moore likens the elevator to a patient. The controller, which is up in the machine room, is typically like the brain. It's telling the elevator okay I can run now I can open doors. It's basically the control center for everything. Then you have

what's called a traveler that's kind of like your spinal cord right? Relaying everything from the car up to the controller. I worked on some pretty old ones. They had water hydraulics, steam elevators at one time, so wooden rails, we joke around wooden rails. That was something to work on, tiller ropes, all different types of old elevators that had been around for a long time. Now you're going to a computer

that all you have to do is hook up your laptop or whatever device you have, and it tells you what code went bad, and then you fix it from there. The so-called machine is the heart of the operation. It drives the elevator up and down using ropes over a sheave. Attached to the other end of the ropes is a counterweight, which provides vertical stability. Also in the machine room is the governor, the legacy of Elisha Graves Otis.

People are always worried about elevators falling and you have nothing to worry about. On a lot of these machines, there's five hoist ropes on the car top, sometimes more, and they're all designed to carry the weight of the elevator by itself. Let's say somebody goes in there and cuts all the ropes, the car will fall a couple feet, but then the safeties are going to take place and the car is going to be wedged in place and the fire department or an elevator mechanic will be able to come and get you out. Your chances of getting stuck in an elevator are very rare, despite some famous stories in movies in real life. That actually only happens one in 100,000 rides.

But Shannon Moore's got you. What I'm trying to do first is make sure that I can get the elevator to a spot where the person who's inside the elevator can get out, and then I can spend more time troubleshooting the problem. I'm sure a lot of people get trapped in an elevator, a lot of them panic, and their first impulse is to like rip the door open and kind of try to do something stupid. That is correct. There are safeguards in place to prevent people from trying to pry the doors open. We have a restrictor on the elevator door. So the most anybody should be able to

pry open the new doors is four inches. Because in a hydraulic elevator, if the car is stuck for some reason and you pry the doors open and it loses hydraulic pressure That's a game-ender for whoever's trying to climb out when that elevator falls Luckily or says most days are far less traumatic Typically my hours of operation are from 7 to 3 30 Every month my company gives me a list of units that are due for service that month month, my company gives me a list of units that are due for service that month. So I will get in the truck, take a look at where I need to hit for service, check to see if I have any call outs from the previous night, any trouble calls where elevators are

down or not working. I like to hit those first before buildings get busy. Typically it's just there's a push button out in an elevator. If I get a door issue, the first thing I'm doing is I'm looking down in the track where the door is open and closed. We call that the sill, right? And I'll look for debris. I'll look for a peanut, a cherry seed.

The smallest thing like a screw or a pen cap can prevent the door from closing. The princess and the pea or something. It's like one tiny thing can take down this massive machine. David and Goliath, man, that one little rock. For millions of Americans, elevators aren't just convenient. They're essential. Many people with limited mobility

rely on them running smoothly. More elevators will call for more skilled mechanics. As a third generation elevator mechanic, Shannon Moore spends a lot of time thinking about the future of his trade. Do you have kids? I do. I have one son. You think he's going to be in the royal family of elevator mechanics someday? You know, he has told me since he was four years old that he wants to be an elevator mechanic when he grows up.

We're going to start our own reality TV show instead of Duck Dynasty, it'll be Elevator Dynasty. For the economics of everyday things, I'm Zachary Crockett. This episode was produced by Dalvin Abouwaji and Sarah Lilly and mixed by Jeremy Johnston. We had help from Daniel Moritz-Rapson and special thanks to Craig Summers and his family for suggesting this topic. If you have an idea for an episode feel free to email us at everydaythings at Freakonomics.com Our inbox is always open. Alright, until next week. What are your thoughts on elevator music? Ideally you want to not be in an elevator

long enough to need any music at all. The Freakonomics Radio Network. The hidden side of everything.