Center for American Progress

RELEASE: Fixing Our Broken Infrastructure Will Create Jobs, Spur Long-term Economic Growth
Press Release

RELEASE: Fixing Our Broken Infrastructure Will Create Jobs, Spur Long-term Economic Growth

By Heather Boushey

Read the analysis

Washington D.C.—Today, as President Barack Obama points to a bridge in need of repair as a way to put Americans back to work, the Center for American Progress released an analysis proving that investments in infrastructure will create jobs and yield lasting benefits for the economy.

Entitled “Now Is the Time to Fix Our Broken Infrastructure” the analysis states that upgrading roads, bridges, and other basic infrastructure creates jobs now by putting people to work earning good, middle-class incomes, which expands the consumer base for businesses. These kinds of investments also pave the way for long-term economic growth by lowering the cost of doing business and making U.S. companies more competitive.

“There is ample empirical evidence that investments in infrastructure creates jobs,” said Heather Boushey, Senior Economist at the Center for American Progress and author of the analysis. “Investments made in recent years, such as increased federal funds to repair roads and fix bridges, have saved or created millions of U.S. jobs, mostly in the private sector. Although infrastructure spending began with government dollars, these investments created jobs throughout the economy.”

The analysis details the following reasons for why spending on infrastructure is a wise investment:

  • Infrastructure projects create jobs in communities nationwide.
  • Infrastructure investments are an especially cost-effective way to boost job creation with scarce government funds.
  • Analysis of all fiscal stimulus policies shows a higher “multiplier” from infrastructure spending than other kinds of government spending, such as tax cuts, meaning that infrastructure dollars flow through the economy and create more jobs than other kinds of spending.
  • Investing in infrastructure not only creates jobs, it increases the productivity of businesses small, medium, and large.

Although evidence proves investments in infrastructure will create jobs and spur economic growth, spending on infrastructure is now being pared back as states and localities struggle with budget constraints. Even so, there is a long list of infrastructure projects in which municipalities, states, and the federal government can invest. The American Jobs Act seeks to remedy this situation by investing critical resources in America’s infrastructure.

The American Jobs Act addresses a number of specific infrastructure investments and includes resources to modernize and upgrade our school and community college infrastructure. There is great need for this kind of investment. The accumulated backlog of deferred maintenance and repair for schools alone amounts to at least $270 billion.

The total investment in infrastructure through the American Jobs Act also includes resources for immediate investments for highway, highway safety, transit, passenger rail, and aviation activities. These funds will make our nation’s highway systems more efficient and safer for passenger and commercial transportation, as well as repair and modernize our nation’s transit systems. In addition, the American Jobs Act funds will be used to set up a National Infrastructure Bank that would provide loans for projects including transportation infrastructure, water infrastructure, and energy infrastructure. Finally, the American Jobs Act would provide funding for neighborhood stabilization projects and the repurposing of vacant properties.

Boushey added, “Now is the right time for America to invest in maintaining and upgrading our infrastructure. We have millions of American workers who want to get off the unemployment queue and into a job and borrowing costs at decade lows, making it extraordinarily cost effective to make big investments today.”

Read the analysis: Now Is the Time to Fix Our Broken Infrastructure – American Jobs Act Will Put Millions to Work