On Nov. 15, President Joe Biden signed the long-awaited Infrastructure Investment and Jobs Act (IIJA) into law. Whether you’re a fan of the current administration or not, the bill is quite
literally a big deal. According to a recent White House press release, the bipartisan legislation promises to “rebuild America’s roads, bridges and rails, expand access to clean drinking water, ensure every American has access to high-speed internet, tackle the climate crisis, advance environmental justice, and invest in communities that have too often been left behind.”
Infrastructure Week, it seems, has finally arrived.
More jobs, better pay
The bill’s approval is welcome news to the manufacturing industry. A 2014 report from the Economic Policy Institute, bearing the lofty title “The Short- and Long-Term Impact of Infrastructure Investments on Employment and Economic Activity in the U.S. Economy,” offers several scenarios for investment. The largest scenario – and the one closest to that proposed in the current spending bill – states that “a debt-financed $250 billion annual investment boosts gross domestic product (GDP) by $400 billion and overall employment by 3 million net new jobs by the end of the first year, with the increased levels then sustained over the seven-year life of the investment.”
Granted, not all of these will be manufacturing jobs, but it’s only logical that any large-scale public works project will lead to investments
in new machinery, technology and human capital, even if those investments have nothing to do with the project itself.
Consider the country’s most comparable project, the Federal-Aid Highway Act. Signed into law by President Dwight D. Eisenhower on June 29, 1956, it authorized the construction of 41,000 miles of interstate highways. Forty years later, conservative policy analyst Wendell Cox named it The Best Investment a Nation Ever Made, noting in an article that it made just-in-time delivery more feasible, reduced warehousing costs and added to manufacturing efficiency, while delivering “a gain of at least $6 in benefit for each $1 spent in construction.”
Broken and tired
There have been other projects, although none as large or comprehensive. The Hoover Dam in Nevada. Boston’s Big Dig. The Chickamauga Dam in Tennessee. New York’s LaGuardia Airport, Triborough Bridge and Lincoln Tunnel. The Golden Gate and Bay Bridge in San Francisco. Many of these were the result of President Franklin D. Roosevelt’s depression-era New Deal policies and the creation of the Works Progress Administration, which provided millions of jobs during the Great Depression and after.
Sadly, far too many of these and other public works are now in need of repair:
- The American Road and Transportation Builders Association (ARTBA) says there are more than 6,000 miles of U.S. bridges (4 out of 10) in need of repair and that, at the currentrate, “it would take 40 years to fix all of the nation’s structurally deficient bridges.”
- The New York Times reports that “the 111-year-old tunnels used by commuter trains and Amtrak have deteriorated rapidly since Hurricane Sandy flooded them with saltwater in 2012.”
- And as the Council on Foreign Relations (CFR) pointed out late this year, U.S. passenger trains average just half the speed of Europe’s high-speed rails, we rank 18th worldwide in broadband coverage, and our “drinking water, wastewater, and irrigation systems will require $632 billion in additional investment over the next decade.”
It’s understandable. That same CFR report projects that the United States will spend far less on infrastructure through 2040 as a percentage of GDP than 17 other G20 countries. Where America will invest 1.5 percent of its GDP over the next two decades, China will spend a whopping 5.1 percent, followed by India at 3.6 percent, Russia at 2.8 percent, Brazil at 2.7 percent and our neighbors to the north at 2.5 percent. Even Turkey at 1.8 percent does a better job on infrastructure than the United States, and that’s after the passage of the bill that our elected officials on both sides of the aisle spent months arguing about.
Worse, the legislation has been far too long in coming and, ultimately, may fall far short of our country’s total needs. In
2019, the World Economic Forum’s Global Competitiveness report noted that U.S. infrastructure quality is rated 13th globally. Singapore was first on the list, followed by France, Germany, Japan, Spain, the United Arab Emirates, the United Kingdom, and others. Simply put, we have a long way to go before catching up, infrastructure bill or not.
Despite all the negative statistics, the United States remains the greatest country on Earth. And as we’ve done so many times in the past, it’s hopeful that we will rise to the occasion, pull
our collective head out of our body politic and get to work. Doing so, however, will first require us to set aside the constant name-calling and political partisanship and embrace the fact that, red, blue or purple, we will all benefit from what is arguably the largest investment in America’s future since our country’s founding.
As for what that means to the manufacturing community, better roads and bridges accomplish exactly what Wendell Cox pointed out in his report, namely lower transportation, warehouse and logistics costs. Improvements to ports, waterways and airports will also increase supply chain efficiency, just as high-speed rail systems (like those found in many other countries) will reduce traffic congestion and get goods and people to their destinations far more quickly.
The IIJA goes far beyond such traditional infrastructure, however. As many Texans can attest, much of the country’s power infrastructure is unreliable. The bill’s $65 billion investment will help reduce the $70 billion lost to power outages annually while expanding the use of renewables and clean energy. So will the $7.5 billion for a national network of electric vehicle chargers, all of which will require sheet metal fabrication, welding and machined parts.
There are investments in clean water so our children won’t have to drink out of lead pipes, investments in broadband so they and their parents can stay connected, and investments in clean energy and carbon reduction so our grandchildren will have a planet on which to live comfortably. As Joe Biden put it before signing the historic bill, “Generations from now, people will look back and know this is when America won the economic competition for the 21st Century.”
It’s time, America. Let’s roll.