Infrastructure for the sake of jobs?

April 18, 2013 5 comments Open printer friendly version of this article Print Article

Are we building highways for the wrong reason? Billions can be found for questionable projects such as the First Coast Outer Beltway and SR 9B, while streets like Southside Boulevard and Baymeadows Road remain heavily congested with no relief in sight. This article by Nathaniel Hood of suggest that many cities rely on road construction for the wrong reason and to their own economic detriment.

We shouldn’t build infrastructure for the sake of creating jobs.

“Jobs and growth are the results of a productive system, not a proxy for one. Until we reconfigure our places, sustained prosperity will remain elusive.” – Chuck Marohn, If it creates jobs, then it must be good, right?

Jobs and economic growth are a result of having a productive system in place, not the other way around. We need to create real net wealth that benefits not only the local communities, but the region as a whole. Don’t get me wrong, jobs are great. But, building infrastructure with the primary purpose of creating jobs, with little consideration to context, is setting a bad precedence and setting up communities for unexpected liabilities.

This leads me to a new program in Minnesota called Transportation Economic Development (TED) that “is a competitive grant program available to communities for highway improvement and public infrastructure projects that create jobs and support economic development.” Projects can receive up to $7 million and must meet a few qualifications, but the primary concern is purpose #1: “Create and preserve jobs.” It aims to do this by providing funding to help jump start projects that lack local funds.

In theory, this sounds good: we’ll create infrastructure and it will support things like manufacturing, technology, research and development and bio-science. These are all industries that politicians salivate over. The problem is, by concentrating on creating jobs in the short-run, we’re ignoring whether what we’re building is actually a good project that will have a positive return on investment in the long-run.

I’ve taken the time to map all the 2011 TED projects. You can view all of 2011 and most of 2012 on Google Maps, but I wanted to highlight a few examples, most of which are classic “if you build it, they will come” projects.

City of Marshall – $575,000 in TED Funding

The city is installing turning lanes and a bypass lane on Highway 68 near the newly built Lake Road Industrial Park and officials are negotiating with businesses that may want to be located in the park. It’s estimated the $822,500 project will create about 100 jobs.

City of Mankato – $969,218 in TED Funding

This project expands a local industrial park by roughly tripling its size. The interchange and roadway networks are being designed to accommodate a controversial Wal-Mart distribution center, for which the City has already kicked in $2 million in subsidies for a project that may not actually happen. Quick back-story, the distribution center has been in the works since 2005, but has yet to be built.

According to more recent news, the city anticipates the project will support 162 new jobs within 2 years and 405 new jobs within 5 years. Of course, since 2005, it was supposed to have already created about 500 jobs. By the way, I took photos (here and here) in Spring of 2011, and nearly 2 years later, it looks the same.

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