Jobs data shows stimulus spending on public transportation produces more jobs, faster

An analysis of congressional data by Smart Growth America, the Center for Neighborhood Technology and the U.S. Public Interest Research Groups shows that stimulus funds spent on public transportation were a more effective job creator than stimulus funds spent on highways. In the 10 months since the American Recovery and Reinvestment Act (ARRA) was signed, investing in public transportation produced twice as many jobs as investing in roads:

  • Every billion dollars spent on public transportation produced 16,419 job-months.
  • Every billion dollars spent on projects funded under highway infrastructure programs produced 8,781 job-months.

As Congress and the Administration discuss a possible jobs bill, the implication is clear: shifting available funds toward public transportation will increase the resulting employment.

Type of Project Recovery Act Funds
Associated with Projects
Under Contract
Direct, On-Project Jobs
Created or Sustained
(Full-Time-Equivalent Job Months)*
Job-months
per billion dollars
Public Transportation $4,405,188,041 72,328 16,419
Highway Infrastructure
(Surface Transportation Program (STP) funds)
$15,809,805,858 138,831 8,781

These results are calculated from data provided by the states through October 31, and released by the U.S. House of Representatives Transportation and Infrastructure Committee on December 10. (*Because transportation projects are of different durations, a “job month” is a more accurate way of comparing quantities of employment created.)

President Obama has said he is concerned that the goal of quickly boosting employment with shovel-ready projects may conflict with making long-term investments in America’s future. These results show that investing in public transportation produces the most return for the money in both categories:

  • it is a more effective direct job creator; and
  • it builds the transportation systems we need for the future.

Investing in public transportation also helps people get themselves to work today and tomorrow and provides immediate support to state and local governments struggling to run public transportation systems.

Other findings

The result that public transportation funding produced more jobs per dollar held across states: every dollar spent on public transportation supports between 1.6x and 2.5x the number of jobs that a dollar spent on highways supports.

Public transportation projects produce so many more jobs per dollar that even in cases where public transportation dollars spent out more slowly, they created more net jobs than the spending through highway projects.

The speed at which states spent stimulus funds varied widely. Transit spending was faster than highway spending for projects and transit agencies in Arkansas, California, Colorado, Illinois, Indiana, Massachusetts, Minnesota, Nevada, New Mexico, New York, Ohio, Oregon, Puerto Rico, Texas, Virginia, and Washington. This is in marked contrast to statements to the GAO that only pavement projects can get the money out quickly.

Any further transportation spending the goal of which is rapid job creation should include measures to accelerate spending, including technical assistance to strapped transportation agencies, and possibly sanctions and rewards.

These job-creation results data are not directly comparable to previously published studies on job creation through infrastructure investment since these are all incomplete programs in various stages of obligation, contracting, initiation, and completion. These results do confirm those previous studies in showing that public transportation produces more jobs.

Policy implications

In any economic conditions, we need investments to provide the maximum possible return. We now have enough data on the impacts of ARRA spending to draw conclusions about the effectiveness of spending under different parts of ARRA. The data so far show that spending through public transportation programs is both the more effective job creator, and moves us towards the transportation system of the future.

As Congress and the Administration debate federal investments in transportation, they should look at the ARRA results to date from the dedicated transit funds and the Surface Transportation Program. Congress and the Administration should note the direct economic benefits of different kinds of investment, and how each helps reduce the cost of living, provides access to jobs, boosts manufacturing, and improves state of repair for all kinds of transportation assets.

All future apportionments, whether from a jobs bill, a second stimulus, and/or the continuing SAFETEA-LU program, and whatever authorization replaces it, should be guided by a balanced approach to transportation spending that produces the maximum return for the money.

Contact

  • William Schroeer, State Policy Director, Smart Growth America, p 612 308 7147, [email protected]
  • Scott Bernstein, President, Center for Neighborhood Technology, p 773 617 9503, [email protected]
  • Phineas Baxandall, Senior Analyst for Tax & Budget Policy, U.S. Public Interest Research Group (U.S. PIRG), Cell: 857-234-1328, Office: 617-747-4351, [email protected]

→View all Smart Growth America stimulus resources.

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