The idea that transportation spending can boost job creation is now at the top of the bullet list for things to include in an economic stimulus package. For those wondering where the big numbers are coming from, look no further than the American Association of Highway and Transportation Officials. AASHTO figures there are 3,109 transportation projects that could be started in 30-90 days if only they had $18.4 billion in additional funding. That seems like small change compared to the $700 billion the government is handing over to the banking industry. AASHTO also claims that every $1 billion in transportation funding creates 35,000 jobs, which works out to 644,000 jobs. Unfortunately, AASHTO’s numbers don’t consider several factors, such as: 1) the transportation needs of a modern economy are fundamentally different than the were in the 1950s, meaning investments need to be far more targeted than they were in previous times to be productive, 2) these highway jobs are largely temporary construction jobs, and 3) much of this funding is targeted toward transit projects that do little to improve mobility in an economically meaningful way. In the end, AASHTO is simply saying that throwing more money at their member organizations will generate jobs, and they see the economic stimulus package as an effective lobbying tool for increasing funding to infrastructure. True enough, we are facing a huge infrastructure funding deficit. But that’s a long-term economic problem, and we shouldn’t confuse that with an effective economic stimulus package.
Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.