The Bureau of Labor Statistics reported today that the U.S. economy added 157,000 jobs last month, which is not enough to quickly bring down the unemployment rate. At the same time, America faces a huge infrastructure gap that is going to cost it 3.5 million jobs over the next decade.
The obvious solution should be more infrastructure spending, especially considering that the U.S. can borrow at historically low rates. This would help address the twin problems of a deteriorating infrastructure and persistently high unemployment. As this chart from BLS shows, U.S. construction jobs are far below where they were a decade ago:
As Calculated Risk noted, public construction spending “is now 17% below the peak in March 2009 and at the lowest level since 2006.” This chart shows the year over year change in construction spending since 1994 (the yellow-ish line is public spending):
Study after study has shown that infrastructure spending has a huge return in terms of jobs and economic growth. According to Smart Growth America “every $1 billion in additional funds committed to highway projects between 2009 and 2010 produced 2.4 million job-hours.” As Kristina Costa and Adam Hersh noted, “the return on investment on transit projects was even higher, with 4.2 million job-hours produced by every $1 billion in investment.” Meanwhile, the San Francisco Federal Reserve found that “each dollar invested into infrastructure boosts state economies by at least two dollars.”