ASCE Report: Failing to Invest in Transportation Will Cause Job Loss, Damage Economy

Posted on July 29th, 2011

The nation’s deteriorating surface transportation infrastructure will cost the American economy more than 870,000 jobs and suppress the growth of the country’s Gross Domestic Product by $3.1 trillion during the next decade, according to a new report released Wednesday by the American Society of Civil Engineers.

ASCE’s report, conducted by the Economic Development Research Group of Boston, indicates that last year, deficiencies in America’s roads, bridges, and transit systems cost American households and businesses more than $129 billion, including roughly $97 billion in vehicle operating costs, $32 billion in delays in travel time, $1.2 billion in safety costs, and $590 million in environmental costs.

If investments in surface transportation infrastructure are not made soon, those costs are expected to grow exponentially, the society asserts. Within 10 years, U.S. businesses would pay an added $430 billion in transportation costs, median household income would fall by more than $7,000, and U.S. exports would fall $28 billion.

“Clearly, failing to invest in our roads, bridges, and transit systems has a dramatic negative impact on America’s economy,” ASCE President Kathy Caldwell, said in a statement. “The link between a nation’s infrastructure and its economic competitiveness has always been understood. But today, for the first time, we have data showing how much failing to invest in our surface transportation system can negatively impact job growth and family budgets. This report is a wake-up call for policymakers because it shows that investing in infrastructure contributes to creating jobs, while failing to do so hurts Main Street America.”

American Businesses and Workers Will Suffer, ASCE Contends< br / >< br / >

The report shows that failing infrastructure will drive the cost of doing business up by adding $430 billion to transportation costs in the next decade. It will cost firms more to ship goods, and the raw materials they buy will cost more due to increased transportation costs.

America would lose jobs in high-value sectors as business income goes down, ASCE projects. Almost 877,000 jobs would be lost by 2020, primarily in the professional, business, and medical sectors.

Ultimately, the report concludes, Americans will get paid less. While the economy would lose jobs, those who are able to find work could find their paychecks cut by nearly 30%.

“The cost to businesses will reduce the productivity and competitiveness of American firms relative to global competitors significantly,” Steve Landau of the EDR Group said in a statement. “By 2020, American families will take a pay cut of more than $7,000 because of the ripple effects that will occur throughout the economy. Business will have to divert increasing portions of earned income to pay for transportation delays and vehicle repairs, draining money that would otherwise be invested in innovation and expansion.”

“A lack of investment in transportation infrastructure would inflict a double whammy on American families, who would see their household incomes fall by $60 a month by 2020, while having to spend $30 per month more for goods,” according to ASCE.

The report estimates that to bring the nation’s surface transportation infrastructure up to tolerable levels, policymakers would need to invest approximately $1.7 trillion between now and 2020 in the nation’s highways and transit systems. The U.S. is currently on track to spend only a portion of that — $877 billion — during the same timeframe. The infrastructure funding gap equals $846 billion over nine years, or $94 billion per year.

ASCE argues that small investments in infrastructure, equal to about 60% of what Americans spend on fast food each year, would:

Protect 1.1 million jobs;

Save Americans 200 million hours in travel time each year;

Deliver an average of $1,068 to each family; and

Protect $10,000 in GDP for every man, woman, and child in the United States.

The 36-page report, “Failure to Act: The Economic Impact of Current Investment Trends in Surface Transportation Infrastructure,” is available at