July 28, 2014
Column | outbound

Building jobs by building roads

New report shows that infrastructure is a much more significant factor in a healthy job market than researchers had expected.

By Mitch Mac Donald

As we write, the House of Representatives has just approved a $10.9 billion stopgap infrastructure funding measure that will pay for projects through May 31, 2015.

The bill, approved by a 367-55 vote, would transfer $9.9 billion from the federal government's general fund to the Highway Trust Fund, the mechanism used to finance highway and transit projects. Another $1 billion would be transferred from a separate trust fund. Still to be determined, and needed, is action by the Senate, which must pass its own bill.

However the Senate acts, and most observers expect its version of the legislation to align fairly closely with the House version, this is a very big and very important deal for both the logistics business, which relies on a sound infrastructure, and for the overall economy. Washington insiders estimate that as many as 117,000 construction projects and about 700,000 jobs are at risk if no action is taken.

But it could be even bigger than that when it comes to jobs. A report issued in July by the Brookings Institution's Metropolitan Policy Group suggests the correlation between infrastructure investment and jobs creation has been vastly underestimated in terms of size and scope.

According to the report's authors, the workforce responsible for supporting the nation's infrastructure, including transportation, water, and energy systems, is roughly 10 percent of the overall U.S. workforce, which, as of June, was reported to be just over 155 million strong.

That equates to one in every 10 Americans in the workforce holding an infrastructure-related job, and according to the Brookings report, the jobs stretch across 95 occupations and 42 industries. To boil it down even further, that is in excess of 14 million jobs!

Brookings says its report, Beyond Shovel-Ready: The Extent and Impact of U.S. Infrastructure Jobs, is the first study of its kind to measure the full breadth of infrastructure employment in the U.S. Based on 2012 employment data, the report brings to light the fact that infrastructure jobs play a distinct role not only in the construction of the nation's infrastructure assets but also in their design, operation, and governance.

"We have learned through this report that infrastructure is a much more significant factor in a healthy job market than we thought, with more than 14 million workers employed in a large assortment of industries, including utilities, construction and government," said Joseph Kane, policy/research assistant at the Brookings Metropolitan Policy Program and co-author of the report. "By gaining a full understanding of the actual size and scope of this segment of our economy, policymakers will be in a stronger position to develop targeted solutions to better manage the country's infrastructure as well as address our jobs deficit."

Brookings contends, and we agree, that the nation's infrastructure is the foundation of a functioning economy in that it provides the physical structures needed for a wide range of commercial and public services.

The report also said that only 15 percent of infrastructure workers actually build infrastructure, while 77 percent operate infrastructure systems. Transportation providers, including truck drivers, account for the largest portion of infrastructure jobs.

"Our research exposes how infrastructure is uniquely positioned to simultaneously address income inequality, low-skill unemployment, and long-term economic competitiveness," said Robert Puentes, senior fellow at the Brookings Metropolitan Policy Program and co-author of the report.

"Policymakers have often resorted to stimulus-style spending on infrastructure construction projects as a way to shore up the labor market. This kind of investment provides only short-term jobs, though," Puentes said. "With the right investment approach, however, infrastructure offers an extremely effective way to create the kind of long-term, sustainable jobs that will help grow our economy for many years to come."

About the Author

Mitch Mac Donald
Group Editorial Director
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.

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