Transportation Construction Jobs Alone Do Not a Recovery Make

The art of riding the short-term/long-term transportation funding teeter-totter

By John Latta

A report from the National Transportation Policy Project says creating jobs in the transportation infrastructure is a good thing — but maybe not as good as we think, if it fails to bring long-term economic revival.

The report calls for investment that doesn’t create simply jobs, but “real job benefits.”

The report comes from the Bipartisan Policy Center and the authors are Douglas Holtz-Eakin, president of the American Action Forum and former director of the Congressional Budget Office, and Martin Wachs, senior principal researcher at the RAND Corporation and professor at the University of California-Berkeley.

“Short-term job creation, while vitally important, must be viewed within the context provided by a longer-term view,” say the authors. “Over the long term, higher productivity — the ability to generate more output and income from each dollar of capital or hour of work — is the key to higher labor earnings and improved standards of living.”

The authors argue that while transportation investment will always create jobs, its actual effect on our economy — and eventually the long-term future of those working in the industry and in those newly created jobs — is only positive if the productivity metric measures positively.

Last month’s Financial District in these pages reported that a new McKinsey Global Institute report noted that productivity was the key factor in reigniting growth and renewing the American economy.

Different investments in transportation can have different impacts, and short-term job increases may not become the basis for long-term economic recovery, the authors claim. “Poorly-targeted transportation dollars represent a wasted opportunity that the country can ill afford given its current fiscal predicament,” say the authors.