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


April 30, 2008

A rebuilding program for the nation’s roads, bridges, schools, transit systems and electrical grid would create 42,000 jobs for every $1 billion spent and help us better compete in the global economy. Pennsylvania Gov. Ed Rendell points out that we often push infrastructure repair to the back burner because it is so expensive. But, he says, we can afford it, if we have the political will. Just as we found the money for the war in Iraq, we can find the money to rebuild the country, he says.

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

by James Parks, Apr 29, 2008

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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