Tanya Snyder wonders if it really makes sense to be touting the short-term employment impact of investing in transportation infrastructure. After all, the real benefit here is that over the long term better infrastructure leads to more growth and higher quality of life.
I think that’s right, but I do think the jobs point is relevant. After all, any time someone comes along with a proposal to build a train line or repair a bridge someone is going to be concerned that the project is wasteful. At this point, you have to ask yourself what, exactly, is it that we might be wasting. “Money” is often the answer you get, but while individual government agencies do have fixed budget constraints, the United States as a whole is at no risk of running out of dollars. The thing that might be wasteful about increased transportation infrastructure investments is real resources. Human labor, steel, concrete, building equipment. These are things that could be used on some government-funded pet project, or could be used on projects that the private market has deemed to be sound investments. But how much we worry about this ought to be in large part a function of how many idle resources we have. In October of 2000, the unemployment rate was 4 percent and the employment:population ratio was the highest it had ever been in American history. Under those circumstances, before you pull real resources out of the private sector you want to be very sure you’re doing something worthwhile. When it’s June 2003 and the unemployment rate is 6.2 percent you’re looking at a very different situation. And when it’s May 2011 and the unemployment rate has been consistently over 9 percent for two years then you’re looking at a very different situation. The United States is not running short on construction workers. Useful projects are, as always, better than useless ones but with this quantity of idle real resources the bar something needs to cross to be worth doing is extremely low.