Report | Budget, Taxes, and Public Investment

The job impact of transportation reauthorization

Issue Brief #280

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America continues to reel from the worst recession in 75 years, with nationwide unemployment above 9% for the past 12 months. While the American Recovery and Reinvestment Act successfully mitigated the severity and length of the downturn, robust economic recovery, though hoped for, is far from guaranteed.

Transportation investments represent an opportunity for Congress to kick the economy into a higher gear by creating millions of well-paying jobs while simultaneously addressing the backlog of repair and maintenance in transportation that has been growing for decades. The average rush hour commuter has seen annual delays nearly triple since 1982 (Puentes 2008), wasting billions of gallons of gasoline that pollute our air and threaten our national security through our dependence on foreign oil. This increased traffic congestion—along with deep cuts in transit service across the country (Transportation for America 2010)—reduces mobility, which leads to segmented labor markets (thus hurting businesses) and exacerbated poverty (Talukdar 2008).

The current transportation policy, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (known as “SAFETEA-LU”), expired last fall, and it has since been extended on a short-term basis multiple times as Congress struggles to write and pass a full six-year reauthorization. This report examines the job impact of different transportation policies, exploring both how many and what types of jobs would be created. The analysis compares investments under the current policy with an alternative transportation funding scenario, developed by Transportation for America (T4A), that increases investments in repair and maintenance, public transportation, and livable communities.

This paper finds that:

— The mix of investments in the T4A proposed reauthorization would support more jobs than the current policy baseline. The T4A proposal would support 14,400 direct and indirect jobs for each billion dollars of transportation investment (or 7.2 million jobs from the entire $500 billion proposal), while the SAFETEA-LU baseline would support 13,700 jobs per billion dollars.

— Overall, transportation investment would disproportionately benefit those hardest hit by the recession, providing a higher proportion of jobs to low-wage workers and workers without a college degree relative to the overall economy. These characteristics hold equally for the SAFETEA-LU baseline and the T4A proposal.

— The T4A proposal creates a higher share of unionized jobs than the SAFETEA-LU baseline, although both scenarios entail job impacts that are more unionized than the overall economy.

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