Why $1 Trillion Is the Magic Number for Infrastructure Spending
By Anthony P. Carnevale and Nicole Smith
Democrats and Republicans agree that the country’s infrastructure needs improvement, and these repairs seem likely to cost $1 trillion over 10 years. President Trump eventually upped his initial infrastructure spending proposal from $1 trillion to $2 trillion, but Republicans have expressed their unwillingness to spend more than his initial figure. Meanwhile, a few Democratic presidential candidates have introduced plans to invest varying amounts in infrastructure.
The reality is that spending double the money will not double the number of jobs, but it does have the potential to raise inflation. A $2 trillion investment could create up to 12 million jobs, according to our estimate. But spending $1 trillion could create up to 11 million jobs — nearly as many, for half the cost.
Here’s why this is the best deal for workers:
- Industry Growth: A $1 trillion expenditure would temporarily increase jobs directly related to infrastructure, such as those in construction and transportation, from 12 to 14 percent of US jobs.
- Blue Collar Boost: Investing in infrastructure would temporarily revive the blue-collar economy. Fifty-five percent of the 11 million new infrastructure jobs would go to workers with a high school education or less, including those who are welders, electricians, technicians, and truck drivers.
- More Jobs: More people would need to join the labor force to fill these jobs, especially because unemployment is at a 50-year low.
- Increased Productivity: New and improved roads and bridges would allow goods to be transported more easily and workers to commute more quickly. Spending on infrastructure would indirectly increase productivity and overall economic growth.
Jobs for high school-educated workers have been in decline since the 1970s. With advances in technology, new infrastructure jobs these workers could fill will require higher skill levels than these kinds of jobs used to. One third of newly-created jobs will require anywhere from six months of training to an advanced degree, but the other two thirds will require no more than six months of training to obtain certificates or licenses.
Broad solutions at the federal and state level are necessary to support the education and training that workers with no more than a high school diploma will need to remain employed in the long term. In response to changing education requirements for blue-collar jobs, the president and Congress should allow low-income students to use Pell Grants to pay for training for in-demand credentials. Providing resources to train workers for these new infrastructure jobs will help ensure they are not left unfilled.
Dr. Carnevale is Director and Research Professor and Nicole Smith is Chief Economist and Research Professor at the Georgetown University Center on Education and the Workforce. CEW is an independent, nonprofit research and policy institute affiliated with the Georgetown McCourt School of Public Policy that studies the link between education, career qualifications, and workforce demands.