AP misses the transportation stimulus jobs forest for the trees

Today, the Associated Press published an article skeptical of transportation stimulus spending's effect on employment. Now, I'm all for a vigilant press to help keep our government effective. But this story is missing the point. This Administration's transportation stimulus spending is putting people to work.

According to AP's analysis, "a surge in spending on roads and bridges has only barely helped the beleaguered construction industry."

That's what my math teachers used to call comparing "apples and oranges." Referring to the "construction industry" when transportation stimulus spending is only designed to help the transportation construction industry.

You see, the highway and road construction industry totals about 258,000 jobs out of an overall national work force of 132 million jobs. If you're keeping score at home, that means only two-tenths of one percent of the American employment is in highway and road work.

And, not only is transportation construction less than a percent of all employment, it's also only a tiny sliver of the total construction picture.

The same can be said of transportation's role in the American Recovery and Reinvestment Act. Transportation stimulus dollars make up only 7% of that nearly $800 billion package.

But, when we drill down to the transportation construction industry, the most appropriate basis for analysis, we find Recovery Act spending making a real difference in people's lives.

Just last week, the Census Bureau reported that highway and street construction spending in November was 5.7% higher than it was in November a year ago, and other public transportation construction spending was up 18.8% from a year ago.  By contrast, overall construction spending was down 13% from a year ago, to the lowest level in six years.

And even that rise in public spending conceals the fact that states, counties, and municipalities have all cut their transportation construction budgets drastically.

In absolute terms, overall public construction rose by $8.3 billion in November 2009 from November a year ago.  All of that (more than all of that) was accounted for by highways, streets, and other public transportation construction projects, which rose by $9.2 billion.

So, on top of tens of thousands of laid-off workers back on the job, Federal stimulus spending is reducing that drastic shortfall in other public transportation spending, making it possible for tens of thousands of workers to retain their jobs and never even hit the unemployment rolls.

Indeed, DOT-administered stimulus spending is the only thing propping up the transportation construction industry. 

I dont' know about the AP, but where I come from, we call that helping.

Comments

[Judy Clark]

And the total spending masks the benefit that in this time frame the public is getting much more for the $ than before. Projects have come in enough below prior estimates that more projects can be accomplished than expected for ARRA budget dollars.

[darkleo000]

Key words "propping up"...we've done this and it's costing us endlessly to continue "propping up".

[AAA]

AAA’s ‘Crashes versus Congestion’ report shows there is a significant economic cost to neglecting traffic safety. This is one reason why AAA supported transportation investment as part of the American Recovery and Reinvestment Act (ARRA). Whether it is installing median barriers, rumble strips, or adding roundabouts at intersections, these and other safety upgrades are proven ways to reduce serious injuries and save lives.

While the ARRA bill provides a necessary shot-in-the-arm to address the backlog of deferred maintenance and construction projects, it is no substitute for a comprehensive, long-term surface transportation bill. Transportation should be a top Congressional priority. Enacting a multi-year bill can ‘Make America Stronger’ by enhancing the safety and reliability of the nation’s transportation system. In this time of fiscal constraint, an investment in transportation provides a wide array of benefits, including jobs, greater mobility, and improved safety.

[Brad Miller]

I am a bit confused by your numbers. You state that the 258,000 jobs in the Road Construction industry? That equates to only an average of 5160 jobs per state? That number you bring up seems woofully low? I would guess there are 15-30k working in Indiana alone.

In addition the construction industry Unemployment Rate is at around 18+%. Heavy/Highway Contractors are ALREADY stating that they anticipate laying off additional workers as the stimulus projects wind down. Without an adequately funded new highway bill all these stimulus jobs do is hold off on the real issue at hand in our industry. Underfunded highways and bridges. I was really hoping President Obama would tackle this issue as hard as jobs and healthcare, but so far I do not see the urgency.

Thanks so much for the reply.

[Michael E. Bailey]

This shows that good news won't sell newspapers, at least according to the AP. The ARRA has been one of the few things keeping the economy going. Road and higway projects are some of the real bright spots the economy has. But some people will always talk about how bad the ARRA is because it is not their program or because it does not match their particular political philosophy. But those same people never seem to have a program of their own; all they can do is talk about how bad the ARRA is. It is like a real far right wing candidate running for a local office who says he wants to fire the head of the city's library becaue he does not like her. You should let the critics feel free to debate you, while you continue on to do the great job you have been doing helping the American People. Thank you for all you do and best wishes, Michael E. Bailey.

[Mason Hicks]

Mr. President, I think it would more correct to say that AP is comparing apples to fruits..

[car transport]

All I can say is that Chicago Metropolitan area is constantly under transportation construction, especially in the summer time and still a lot of main streets are awful to drive on.
I really don't see where all the billions are spent ( at least in Chicago metro area ).

[Greg Cohen]

The AP analysis failed to fully consider the number of jobs created and saved outside of the immediate vicinities of projects. It also failed to consider that the vast majority of the highway money will be spent in the coming months. By only looking at local employment, the study failed to recognize the positive effects of highway spending for materials suppliers, equipment makers and dealers, truckers and others.

Of the 30,000 jobs sustained by each billion dollars in federal spending, about two-thirds are indirectly created in supporting industries or induced in totally different industries. In fact, nearly half of the jobs created by highway investments are induced.

The AP report fails to consider that a large portion of the jobs are created far away from an individual stimulus project but benefit the country as a whole.

Analysts should think about our highways as the economic circulatory system of our country.

Like a stent, an improvement to the circulatory system in one part of the network creates benefits throughout the entire system. Better, safer, and more efficient highways have a long track-record of proven positive impacts on the regional and national economy. There should be no doubt that they protect and create hundreds of thousands of American jobs.

[Justin]

Also remember that the "Transportation Construction Industry" is only the tip of the iceberg. How do you think construction workers do their jobs? They also need to buy tools and equipment, many of which are manufactured in America or support at least some American jobs in some way. Those manufacturers also need components from other companies to assemble things like ITS equipment, etc. The money spreads throughout many industries not considered "construction jobs."

You see highway workers in hardhats and vests driving steamrollers -- but where do you think those hard hats, vests, and steamrollers come from? Think.

[jewelry reviews]

hey also need to buy tools and equipment, many of which are manufactured in America or support at least some American jobs in some way. Those manufacturers also need components from other companies to assemble things like ITS equipment, etc.

[DR]

According to recovery.gov, as of September 1, 2010 the DOT has spent nearly $18.5B of ARRA stimulus money. No doubt, this money has kept some people employed. Infrastructure construction and maintenance is an important piece in improving commerce throughout the country. But, at this point, it doesn't look like it has helped the overall employement picture at all. You could even argue that the huge amount of public spending from the ARRA has dampened private sector employement since businesses know that (at some point) the bill for this spending will come due and they will have to pay.

[Bucket Trucks]

Figures. All the AP ever publishes is bad news. Well, not always I guess, but usually.

[Bucket Trucks]

AP seems fairly unbiased. I would imagine this is an appropriate figure. Thanks for the read.

[Terex Bucket Truck]

Exactly, it helps one thing and makes another worse. Depends on what the focus is... Definitely a comparison. Thanks for the post.