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Deron Lovaas’s Blog

New Report: Failure to Invest in Transportation Infrastructure Will Cost Jobs, Shrink GDP

Deron Lovaas

Posted July 28, 2011 in Moving Beyond Oil

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In a new report released this week (covered by streetsblog and the WashPost among other outlets), the American Society of Civil Engineers (ASCE) takes a closer look at how our deteriorating surface transportation infrastructure – which earned a “D” grade from ASCE in 2009 -- affects American families, businesses, and our national competitiveness.

As you might guess, it’s not pretty. ASCE calculates that the impact of deteriorating roads, rails, bridges and transit amounts to 870,000 jobs lost and $3.1 trillion in GDP lost by 2020.

Crumbling, congested roads and a lack of transportation options means American families and business are spending more time, using more fuel, and spending more money to get where they need to go. One interesting note for the large amount of traffic on interstate highways in urban areas -- 47 percent of that traffic is on deficient roads, versus only 15 percent of rural interstate traffic. And no matter where you happen to be traveling, the longer we delay infrastructure improvements, the worse it gets.

By 2020, ASCE calculates, American businesses will be spending an extra $430 billion on transportation costs, leading to a lag in productivity, a drop in exports, and the loss of hundreds of thousands of jobs. Families would see incomes drop by $7,000 over that 10-year period.

Knowledge workers, who have grown into a key part of our advanced economy, would suffer -- by far -- the most. An economist involved with the study tells me that three reasons underpin this finding:

  1. Lower business income due to lower productivity and more income diverted to transportation costs requires cutting back on hiring and other productivity-enhancing investments;
  2. Less household income means fewer purchases of electronics and professional services; and
  3. Commuting difficulties create more workplace inefficiencies, especially in high-wage sectors.

RoughRoadAheadGraphic.jpgThe upshot: We can’t afford NOT to invest in transportation. The costs to our economy, especially in high-wage industries, are simply too high. This report adds to a number of studies which have come to the same conclusion. Even conservatives agree that we need to invest in our national transportation infrastructure, not cut it off at the knees.

How, in these fiscally constrained times, do we move forward? We need to design a transportation program with clear, national goals, which includes an oil-savings target and prioritizes critical repairs and maintenance. We need to find new ways to generate revenue for infrastructure projects, through tools such as an oil-security fee and an infrastructure bank. And we need to ensure that our investments are smart, performance-based choices that will make the best use of limited funds.

I hope President Obama and Congress will put us on the road to recovery. We simply can’t afford the road to nowhere.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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