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Every $1 Billion Spent on Rebuilding Infrastructure Creates 42,000 Jobs

by James Parks, Apr 29, 2008

Photo credit: Steve Share

Too often, the only time lawmakers think seriously about rebuilding our nation’s aging and crumbling infrastructure is after a disaster like the collapse of a bridge in Minneapolis or the destruction of New Orleans during Hurricane Katrina. Then a few months later, the issue is pushed back to make way for less-expensive priorities.

But the ability of the United States to compete in the global economy and continue its growth depends on our willingness to improve our roads, bridges, waterways, transit systems and the electrical grid, says Pennsylvania Gov. Ed Rendell (D).

The price tag to rebuild is high, but we can afford it, Rendell told participants at a symposium today on “Investing in U.S. Infrastructure.” Sponsored by the Agenda for Shared Prosperity, the symposium brought together economists, policymakers and others to discuss ideas for moving America forward after 2008. Rendell told the meeting:   

We always say we can’t afford to rebuild the infrastructure. But we can find the money for what we want to do. If we can afford the war in Iraq, we can fix our infrastructure.

The American Society of Civil Engineers estimates it will cost $1.6 trillion over five years to bring roads, rails, bridges, waterways, transit systems and other infrastructure components into “good condition.” Rendell points out that debt service on that amount is about what we spend in Iraq each year.

John Irons, research director for the Economic Policy Institute, which sponsors Agenda for Shared Prosperity events, told the symposium that infrastructure investments would provide short-term economic stimulus and build the foundation for long-term economic growth by creating new jobs and spurring investments.

Rendell estimates that every $1 billion spent on rebuilding infrastructure creates 42,000 jobs.

The AFL-CIO strongly supports an economic stimulus package that includes investing in infrastructure. Last month, AFL-CIO Chief Economist Ron Blackwell told the Senate Banking, Housing and Urban Affairs Committee the nation needs an economic stimulus package that frontloads 

public investment in infrastructure to maintain our schools and repair crumbling bridges and deteriorating highways. Spending that puts people to work on projects we desperately need is more likely to stimulate the domestic economy than tax cuts that may be saved or spent largely on imported consumer goods. 

A spending program that focuses on rebuilding the infrastructure not only would create jobs but also change our quality of life, Rendell says. It could make our commutes faster and improve our drinking water. It would create more opportunities for workers to build a middle class life by becoming construction workers and help build  businesses that supply materials for the rebuilding.   

Rep. Earl Blumenauer (D-Ore.), who introduced legislation to establish a National Infrastructure Commission, told the conference:

Bridges are falling down, levees are breaching, and antiquated water systems are putting both our environment and health at risk. We’ve got to address this for our economic vitality

If enacted, the legislation would set priorities and seek to achieve consensus at local and federal levels and among public, private, environmental, labor and other groups that agree on the need for revitalizing the infrastructure but are not always in agreement on the best way to go about it.

The speakers echoed AFL-CIO President John Sweeney’s call earlier this year for organizations with diverse interests to come together behind a comprehensive plan to rebuild America. Sweeney said:

 We all have a stake in this—every one of us—and we all have different motives for wanting action. For the AFL-CIO, it’s good jobs. For others, it is something different. We also depend on our infrastructure to keep our families and our communities healthy, comfortable and safe, and to keep our country moving. We should be able to put some of our parochial concerns aside and come together behind a comprehensive long-range infrastructure plan. 

In convention resolutions, the AFL-CIO repeatedly has urged the nation’s political leaders to address our aging infrastructure. At its summer meeting in Chicago last year, members of the federation’s Executive Council renewed their call for Congress and the president to rebuild America. The council’s statement said:  

Our government must make the significant investments needed to upgrade and maintain the nation’s infrastructure. We need to find the resources to make this happen and ensure that we take advantage of this opportunity to create good jobs for America’s workers, both in construction and production of the materials needed. This will require courage, leadership and vision, but we cannot afford not to act.

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4 Comments

  1. pnava on 30.04.2008 at 15:27 (Reply)

    Why was money not set aside for the future repairs ?
    No tax cuts should have been given if we have lousy budgets and high living politicians ????? Offshore outsourcing needed wages sent out of the country.
    Most companies, private schools have to set aside money for the future repairs .Pay bills first then you have disposable income and discretionary spending. This high lifestyle we have been living is really a lack of leadership no planning. We pay people to sit around and do nothing,do not say it’s unacceptable.Everyone is to afraid to explain .Money comes in and it has to pay for the present
    and for the future. Save the extra. With the Government always spending telling us we should spend, spend ,spend and no decent paying jobs This mess is not hard to understand.

  2. Cynical on 30.04.2008 at 16:09 (Reply)

    I hope Congress and the president will keep some of the tax monsy here in the USA instead of handing it out to foreign countries with corrupt governments who keep the people down and out. It seems any persons who are not American get the American tax money.

  3. coloneblog on 01.05.2008 at 09:49 (Reply)

    Get that infrastructure money from the same place Cheney and bush got it for their idiotic war. Hey, if you can borrow money from China and Saudi Arabia just to piss it away on an absolutely ridiculous war, then it’s certainly justifiable to borrow it to better the lives of the American people.

  4. No Amnesty on 01.05.2008 at 12:40 (Reply)

    Spending on our infrastructure is vital. Particularly our bridges, power grids, water and waste treatment plants, etc. What worries me is where the materials for that spending will be coming from. If we’re going to use inferior Chinese steel and other materials it could result in utter catastrophe! Just like the ‘cheap’ illegal labor many employers like to use isn’t really cheap, those ‘cheap’ imported products carry a very high price as well. Like the saying goes, YOU GET WHAT YOU PAY FOR! And it’s high time this country, particularly corporate America and our government, woke up and realized the truth in that starement.

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