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

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.