As a nation, we need to face that fact that austerity simply does not work. Our nation’s infrastructure will continue to crumble if we do not invest in its repair, and our economy will continue to stagnate if we don't expand our infrastructure to meet the needs of our growing population.
The leaders elected to office in the fall of 2012 seem blind to the fact that the austerity measures put in place in Europe have been a disaster that caused Euro Zone unemployment to rise to all-time highs. Yet, at this time, many of them seem content to shed more than 1 million jobs from our economy simply to reduce our debt-to-spending ratio.
Our elected officials continue to ignore Nobel Prize-winning economists like Paul Krugman who tell us that “austerity right now is a really, really bad idea.” While the one-time world leading enforcer of austerity measures, the International Monetary Fund (IMF), published a white paper discrediting the effectiveness of austerity as a solution, our elected officials continue to pursue it and ignore the approaches that have worked in the past. Our nation was able to get out of the Great Depression because the federal government chose to invest in short-term growth to put people back to work, and then, once the economy was back on its feet, the federal government chose to address long-term deficit issues.
In this austerity-driven policy environment, where debt servicing is valued higher than investment in our nation’s future, is it really a surprise to see that the recent report by the American Society of Civil Engineers (ASCE) shows that we’re falling behind on repairs and upgrades to our infrastructure? ASCE awarded our infrastructure a “D” grade in their report. Policymakers need to recognize that investing in infrastructure is essential to support healthy, vibrant communities. Infrastructure is critical for long-term economic growth, increasing GDP, employment, household income and exports. Continuing along the current path and failing to prioritize the nation’s infrastructure needs will only cause conditions to further deteriorate and drag on the economy.
ASCE gave the U.S. transit system a "D" because transit agencies continue to struggle to balance increasing ridership with declining funding. While America’s public transit infrastructure plays a vital role in our economy, connecting millions of people with jobs, medical facilities, schools, shopping and recreation, and it is critical to the one-third of Americans who do not drive cars, policymakers fail to match its importance with appropriate levels of federal funds.
The nation’s policymakers need to consider that transportation is the second largest expense, after housing, for households in the United States, surpassing food, clothing and health care costs. The politicians driving the debate on austerity, instead of focusing on investment, need to be reminded that low- and moderate-income households spend 42% of their total annual income on transportation, including those who live in rural areas, as compared to even middle-income households, who still spend nearly 22% of their annual income on transportation.
Over the course of the past year, which saw Superstorm Sandy and its aftermath cause an estimated 74 million transit trips to be lost, ridership on buses, subways and other modes of public transportation in the United States rose 1.5% to 10.5 billion trips last year, the highest annual total since 2008.
While these numbers are notable, it is important to note that unlike many U.S. infrastructure systems, the transit system is not comprehensive. Currently in the United States, nearly two-thirds of all residents in small towns and rural communities have few if any transportation options, 41% of the population have no access to transit, and another 25% live in areas with below-average transit services. Yet Americans who do have access to public transit have increased their ridership 9.1% in the past decade, and that trend is expected to continue. This seems to be an area ripe for investment. If policymakers could get past their unhealthy obsession with austerity, they should realize the benefits of investing federal dollars in public transit.
Public transportation not only helps to maintain and create jobs, it also moves people to and from their jobs. Businesses located near public transportation experience more employee reliability and less absenteeism and turnover. Employers have a larger labor pool from which to choose, and employees are happier because they are not driving in congestion delays. One survey of high-tech and green firms shows that 77% rated access to mass transit as an extremely important factor in business location decisions. Additionally, every $10 million invested in public transportation results in a $30 million gain in sales for local businesses due to increased foot traffic and decreased congestion on roadways.
Consider the benefits to the economy if the United States expanded public transit to connect the people currently not being served by public transit to the jobs and the commercial districts that serve their communities. Currently in the United States, nearly 20% of African American households, 14% of Latino households and 13% of Asian households live without a car. On a given day, 50% of older people who do not drive in the United States stay home because they lack transportation options and that lack of options also presents a serious challenge to the nearly one in five Americans who face a physical challenge that impacts their ability to travel for their daily needs.
Beyond the economic benefits that come from simply meeting the needs of taxpaying citizens, consider that once transit service is expanded, an investment in transit vehicles and equipment is needed and the benefit to the economy become even greater. Existing public transit bus, rail vehicle and clean truck supply chains support about 40,000 U.S. manufacturing jobs. While relatively small today, jobs in these supply chains are spread across all 50 states, among more than 320 existing companies that could scale up to meet expanded demand. Further, every $1 billion invested in public transit creates around 1,400 manufacturing jobs. There is a further benefit from those manufacturing jobs created as economists have established that manufacturing jobs have among the highest indirect job creation benefits. On average, each manufacturing job supports 2.5 jobs in other sectors and, at the upper end, each high-tech manufacturing job supports 16 jobs. These jobs pay 21% more in wages and benefits than the average for the entire economy, and they more often provide health, pension and other benefits.
While the last federal transportation authorization kept federal funding of public transit level, this ASCE report makes it clear that there needs to be more investment. Deficient and deteriorating transit systems that cost the U.S. economy $90 billion in 2010, and many transit agencies are struggling to maintain aging and obsolete fleets and facilities amid an economic downturn that has reduced their funding, forcing service cuts and fare increases. Recently, more than 80% of the nation’s transit systems proposed to or already have eliminated transit routes, cut service hours, increased fares, or a combination of all of these.
It is important to point out that the solution needs to come through federal investment and not, as some of austerity crazed policymakers would suggest, through privatization of public transit. ASCE's "D" grading of U.S. transit should not be used to bolster the arguments made by some pro-privatization activists who, despite evidence to the contrary, believe the private sector can always deliver these services more efficiently while saving taxpayer dollars. These advocates for mass transit privatization forget that our federally supported transit network was created in the aftermath of bankrupt or near bankrupt private operators in the late 1950s and early 1960s that could not operate a private, profitable mass transit system. Yet, these advocates of wholesale privatization of mass transit declare that competition and private-sector discipline will bring cost savings for taxpayers. Their claim ignores a growing body of evidence, which demonstrates severe problems of startling cost overruns, threats to safety and shabby service caused by poorly conceived privatization and contracting initiatives. In order to meet the nation’s transit needs, our federal policies must invest the necessary resources to expand, not destroy, public transit service and to impose more rigorous performance, labor and safety standards on private contractors when they are allowed.
Instead of pushing through an austerity-based ideological agenda that pushes privatization of public resources to effectively shrink government that will further devastate our nation’s infrastructure, jeopardize needed services and threaten jobs in mass transit, our nation’s policymakers should look at how the poor management ruining service delivery; the aging buses plaguing a city; or the inadequate investment that is causing mass disrepair of city infrastructure can be solved through investment and sensible reform.