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As Congress ponders its next step in moving America back to economic health, we should keep in mind an important lesson from the past 15 months: Investment in infrastructure works.
The transportation and infrastructure investments provided by the American Recovery and Reinvestment Act have been a tremendous success. They have helped stem the tide of job losses from the worst economic crisis facing the nation since the Great Depression.
Of the $38 billion available for highway, transit and wastewater infrastructure formula program projects under the Recovery Act, $34.5 billion, or 91 percent, has been put out to bid on 17,840 projects as of April 30. Within this total, 16,591 projects totaling $32.1 billion, or 85 percent are under contract. Across the nation, work has begun on 14,984 projects totaling $30.9 billion, and within this total, work has been completed on 5,221 projects totaling $4.2 billion.
During the first year of implementation, these highway, transit and wastewater treatment projects created or sustained almost 350,000 direct, on-project jobs. Total employment, which includes direct, indirect and induced jobs, reached almost 1.2 million jobs.
During March of this year the most recent month for which statistics are available the Recovery Act created or sustained 55,000 direct, on-project jobs, and total employment surpassed 140,000 jobs.
These workers are collecting paychecks instead of unemployment checks. These on-project jobs have resulted in payroll expenditures of $2 billion, and $343 million in unemployment checks have been avoided as a result. Furthermore, these direct jobs have generated almost $419 million in federal taxes.
Despite this success, the vast majority of Recovery Act funds for such projects will be exhausted later this summer. The Federal Highway Administration reports that $20.7 billion of highway funds provided under the Recovery Act has been used to finance projects that are either under construction or completed. Only $5.4 billion remains for highway projects for which funds have been obligated but on which work has not yet started.
In addition, private, state and local construction activities continue to stagnate and decline. According to the Census Bureau, during the first two months of 2010, total construction spending was 14.4 percent below levels during the same period in 2009. McGraw-Hill Construction has reported that the overall construction market has declined for three straight years, bringing total construction activity down 39 percent from its mid-decade peak. The Associated General Contractors of America has reported that this decline has affected almost every state 48 states and the District of Columbia lost construction jobs over the past year, including 28 states that experienced double-digit-percentage declines in construction employment.
The national unemployment rate for the construction industry was 24.9 percent in March. The average monthly job loss in the construction industry was 72,000 over the past 12 months. Since December 2007, residential and nonresidential construction employment has been reduced by approximately 1.9 million jobs. As a result, one out of every four people working in construction in 2007 has lost his or her job.
The Recovery Act was a good initial step. These investments have provided and will continue to provide a much-needed boost to the construction industry and have prevented this unprecedented crisis in the industry from becoming much worse.
Now we must build on that success. In December 2009, the House passed H.R. 2847, the Jobs for Main Street Act, which provides $39 billion to help rebuild our nations infrastructure and sustain jobs. Specifically, this legislation provides $27.5 billion for highways and bridges and $8.4 billion for public transit, $800 million for Amtrak, $500 million for airports, and $1.7 billion for water infrastructure.
This additional investment for highway, bridge and public transit projects will immediately create and sustain needed employment and build on the success of the Recovery Act. Recent surveys show no shortage of projects that can be started quickly, and the value of these shovel-ready projects exceeds $62 billion. According to the American Association of State Highway and Transportation Officials, there are 7,497 ready-to-go highway and bridge projects, totaling $47.3 billion, and the American Public Transportation Association reports that there is more than $15 billion worth of ready-to-go transit projects.
The job losses that have occurred within the construction industry, along with the collapse of the state, local and private construction markets, reinforce the need for additional federal investment in the nations infrastructure. The projects are there, and the states, local governments and transit agencies have proved that they can deliver. The infrastructure investment contained in the Jobs for Main Street Act will ensure that the bottom does not fall out of the construction market later this year, rolling back all of the significant gains made under the Recovery Act.
We must finalize the Jobs for Main Street Act and build on our success.
Rep. James Oberstar (D-Minn.) is chairman of the Transportation and Infrastructure Committee.