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Infrastructure and jobs

Summary:
William Gropper, Construction of the Dam, 1938To many on the left, it's always 1933. Building "roads and bridges" will "create jobs," soaking up the mass army of unemployed desperate for work that they seem to see. Driving around though, I notice that we build roads with big machines, not lots of people. And construction jobs are ...

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Infrastructure and jobs
William Gropper, Construction of the Dam, 1938

To many on the left, it's always 1933. Building "roads and bridges" will "create jobs," soaking up the mass army of unemployed desperate for work that they seem to see. 

Driving around though, I notice that we build roads with big machines, not lots of people. And construction jobs are high-skill jobs, not people with shovels. "Shovel-ready" itself is a misnomer. Nobody uses shovels on a construction site anymore, they use a backhoe. Neither you, reading this, nor I, nor an unemployed Wal-Mart greeter or bartender could do much of anything useful on a road construction site. 

On a lark, I went to the Bureau of Labor Statistics to see just how many people are employed on roads and bridge construction. 


Latest

Feb-Mar change

Total nonfarm

144,120.0

916

Construction of buildings

1,689.3

17.8

Heavy and civil engineering construction

1,062.9

27.3

Water and sewer system construction

183.8


Oil and gas pipeline construction

134.9


Power and communication system construction 

211.3


Highway street and bridge construction 

338.3


Specialty trade contractors

4,714.2

65.0

For perspective, total nonfarm employment is 144 million people, up nearly a million in the last month. That's a lot, usually 200,000 is a good month. Well, we're recovering fast from the pandemic. In case you didn't hear the pounding of nails, building construction employees 1.6 million people, with 4.7 million more in the trades. (We're not so much building new housing as building in new places.) 

Infrastructure and jobs


Total unemployment is 9.7 million right now, down from 23 million at its peak. 

Roads and bridges employ 338,000 people. The total is a half of this month's gain alone.  We could use some water construction here in California, though it's not going to happen, and with only 184,000 people employed there looks to be room to expand. 135,000 are building oil and gas pipelines. Uh-oh.

But these are drops in the bucket. In one sense that's good news. When, someday, it dawns on Washington that 30 million jobs is a cost, not a benefit, it means we could get some roads and dams without needing to hire too many people. (The main barrier to infrastructure remains legal impediments, exploding costs, and poor choices.) 

But as far as the jobs, and those beautiful WPA murals and heart-wrenching Dorothea Lange photographs.... well, it's not 1933, and where it is, high-skill, machine-heavy, road and bridge construction is not the answer. 

I was inspired by Marginal Revolution covering Garrrett Jones tweet coverage of Valerie Ramey's paper showing that infrastructure spending has no stimulus effect. This point is much simpler. 


John H. Cochrane
In real life I'm a Senior Fellow of the Hoover Institution at Stanford. I was formerly a professor at the University of Chicago Booth School of Business. I'm also an adjunct scholar of the Cato Institute. I'm not really grumpy by the way!

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