Infrastructure Investments, Workforce Hold Key to Recovery

Positive economic news seems to continue rolling in. Just last week, the Bureau of Labor Statistics announced that the U.S. economy had added 288,000 jobs in June, the fifth straight month of 200,000+ job increases, lowering the national unemployment rate to 6.1%.

But not everyone is convinced that this recovery is as strong as it appears. The unemployment rate does not include those who are not actively seeking work, and a new survey of 1,500 unemployed adult Americans finds that 47% have “completely given up on looking for a job.” And it’s no wonder. Those who find employment are realizing smaller paychecks; median household income is nearly 7% lower than in 2000 when adjusted for inflation. In part due to the smaller paychecks, a whopping 76% of Americans are now living paycheck-to-paycheck, with little to no emergency savings.

Given the mixed signals about the economy – that more people are working, but earning less – how can we accelerate economic growth? Economist Larry Summers, a Harvard University professor and former President Obama adviser, recently released a four-point strategy and at its core is a focus on infrastructure. He urges investment in public infrastructure, while also facilitating private infrastructure investment. “We have huge problems of regulating glacially and promiscuously distributing veto power that stop adequate levels of private investment from driving the economy forward,” Summers told the Aspen Ideas Festival on Tuesday.

Infrastructure is especially critical to inner city economies. Inner cities have a relatively high concentration of infrastructure assets compared to the rest of the country, including twice as many bridges per square mile, according to an ICIC study. What’s more, over 40% of inner city bridges are structurally deficient, a staggering 60% higher than the national average.

Improving inner city infrastructure can result in significant job creation across many industries. ICIC research finds that a 10% decrease in the percentage of deficient bridges would lead to an uptick in the following inner city employment categories: Motor Driven Products (18.32%), Entertainment (15.11%), Metal Manufacturing (13.58%), Plastics (13.7%), Transportation and Logistics (7.96%), Business Services (7.64%), Local Education and Training (6.69%) and Local Logistical Services (6.14%).

In sum, a 10% decrease in the percentage of deficient inner city bridges is correlated with a 1.83% increase in overall inner city job growth.

But for investment in infrastructure to take hold, cities must train a new generation of workers for these jobs. A new Brookings study finds that an aging infrastructure workforce will leave a dearth of opportunities: 2.7 million infrastructure workers are projected to retire or permanently leave their positions over the next decade. For example, nearly 45% of U.S. air traffic controllers will need to be replaced by 2022, along with 40% of traffic technicians, 35% of water treatment plant operators and 30% of railroad conductors.

Some cities have already made headway in this direction. The Denver WIN (Workforce Initiative Now) collaborative brings together the regional transit authority, community college, transit partners and urban league to train residents for opportunities in transportation and construction industries. Boston is following Denver’s lead; just last week the Commonwealth and the MBTA announced the creation of a MassWIN GLX program to identify, assess, train and place local residents into transportation careers, coinciding with the MBTA’s Green Line Extension. “The transportation industry provides a multitude of career paths, and by launching the MassWIN GLX program, we are helping to promote this industry and in our own backyard,” said MBTA General Manager Dr. Beverly Scott.

Public-private collaborations such as these will serve a dual purpose: to ensure that our nation’s infrastructure needs begin to be addressed and to ensure that the residents most affected by urban infrastructure projects have access to the well-paying job opportunities. In doing so, leaders will help to truly strengthen the economic recovery once and for all.