UWM: Public transportation best avenue for job creation, says UWM economist

MILWAUKEE — Economist James Peoples appeared at the White House Oct. 5 to present his research findings on transportation, stimulus spending and job creation before members from the President’s Council of Economic Advisers and other attending economists.

Job creation is best accomplished through major investment in public transportation projects, says the University of Wisconsin–Milwaukee professor of economics.

“The first 10 months of stimulus spending have revealed that money invested in public transportation infrastructure projects creates twice as many jobs as dollars invested in highway infrastructure – according to researchers from Smart Growth of America and the U.S. Public Interest Research Group. Yet, over 90 percent of the stimulus package has targeted highway infrastructure,” says Peoples.

Transportation infrastructure of all kinds – roadways, railways, the airlines and public transit – is in desperate need of maintenance and repair, says Peoples, current president of the American Economic Association’s Transportation and Public Utilities Group. Despite the topic’s recent prominence in the news over the future of Milwaukee’s Hoan Bridge or the New Jersey tunnel project, and front-page analyses of infrastructure’s role in economic recovery – Peoples says economic data presented by transportation experts has long supported the value of investing in transportation.

Making such investments, he says, would boost the efficiency of commercial and consumer travel – to the particular benefit of businesses that ship an increasing amount of their freight (coal, soy, corn, wheat, etc.) across the U.S. via one of four major railroad operators and interstate trucking.

But the real story, as he reported Oct. 5 to members of the President’s Council of Economic Advisers, is that public transportation projects are a more effective job creator than private or commercial alternatives.

“High unemployment in the construction industry has contributed to a large pool of workers who are qualified to immediately work on the rebuilding of roads, bridges and other transportation structures.”

Additionally, Peoples stated that construction materials are priced competitively and federal interest rates are unusually low, making infrastructure investments more affordable for federal, state and private-industry budgets.

Unlike one-time maintenance projects to existing road and rail networks, Peoples says public-transportation projects like bus-route expansion and high-speed rail sustain job creation longer term, as engineers, operators, technicians and even custodial employees would be needed to maintain public transportation services.

“Transportation findings provided by Smart Growth America show public transit use exceeds population growth by threefold since 1995,” adds Peoples, “so there is a demand for more and more efficient public transportation options.”

Americans enjoy personal transportation, says Peoples, who adds that a major shift away from personal transportation and toward public transit appears to be a “tough and unlikely transition” in the immediate future.

But as gasoline supplies dwindle, fuel prices increase and individual consumers deal with more restrictive personal budgets, Peoples says that public transportation could surge in popularity and necessity.

To fund public transportation networks and support salaries for a wider pool of transportation workers, early economic data suggest an alternative funding structure for public transportation would be necessary, including higher user fees, public-private partnerships and contractual arrangements to employ transit workers, Peoples concludes.

(CONTACT: Professor James Peoples, 414-229-4482, peoples@uwm.edu)