How to Create Even More Jobs with Infrastructure Investment

By Jesús Espinoza
Courtesy of Wikimedia Commons

Infrastructure investment and the manufacturing trade deficit? There’s a connection.

You don’t need to be a civil engineer to notice that America’s infrastructure is one big hot mess. Our roads have potholes that rock your car so violently, it feels as if you’re off-roading on the moon; our bridges are so rusty, you risk getting tetanus just by looking at them; and driving through our tunnels, especially if you’ve ever traversed any of New York City’s underwater roadways, is an act of faith.

It’s a no-brainer that we need to do something about the sad state of our infrastructure. More robust infrastructure investment is the first logical step, and it carries the overwhelming potential to create jobs that are directly and indirectly related to these projects.

But how do we maximize those job-generating benefits? Tougher Buy America (not to be confused with Buy American) provisions in infrastructure spending legislation, which likely voters from both parties strongly support, are one way. A more permanent, systemic solution—coupled with Buy America provisions—is slashing the manufacturing trade deficit by two-thirds, according to a new report by the Economic Policy Institute (EPI).

Josh Bivens, EPI research director and the report’s author, found:

“The number of direct and indirect jobs supported by an increase in economywide spending depends in part on how much of this spending goes to purchase imports rather than domestically produced goods and services. In the case of infrastructure investments specifically, the number of U.S. manufacturing jobs supported depends on the share of purchased manufacturing inputs that is produced domestically as opposed to being imported from abroad.”

Bivens also found that investing $500 billion in infrastructure and reducing the manufacturing trade deficit by approximately two-thirds would generate 45,000 additional manufacturing jobs.

Rebuilding America’s infrastructure will require serious elbow grease from policymakers, but for Americans to benefit fully from any sort of infrastructure investment with Buy America provisions, we must reduce the manufacturing trade deficit. Take note, Washington. The ball is in your court now.

Read the full report here