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E co n o m i c P o l i c y i n s t i t u t E
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Impact of alternate publIc transIt and raIl Investment scenarIos on the labor market
By EtHan Pollack anD rEBEcca tHiEss

ransportation investments represent an opportunity for Congress to kick the economy into a higher gear by creating millions of well-paying jobs while simultaneously boosting the condition and performance of our nations transportation system. The Federal Transit Administration (FTA) recently released a report estimating the total capital investment backlog for the nations transit systems (FTA 2010b). This FTA report led us to look at the effect on jobsparticularly in the manufacturing sectorof two scenarios for public transit and rail funding: the first scenario addresses the backlog, while the second expands the system to meet future needs. This analysis builds on our recent reports on the effects of temporary transportation stimulus and full reauthorization of transportation law with varying funding priorities (Bivens and Pollack 2010; Pollack 2010).

Findings
Transit Backlog Scenario
An annual investment of $27.3 billion over six years into public transit capital would support 15,554 direct and indirect jobs for each billion dollars of transportation investment (or 2.5 million jobs from the entire proposal). Of those jobs, this funding scenario would generate 403,961 direct and indirect jobs specifically in the manufacturing sector (Pollack 2010). It should also be noted that this does not represent the full job impact of such investments, as it does not include jobs created from the re-spending of new employees incomes back into the economy. Overall, this type of transit investment supports jobs targeted toward the lower and middle parts of the wage distribution, which have been hit the hardest by this recession. Over half of the jobs would go to those with a high school education or less. Yet these jobs are well-paying, with only 15% falling in the bottom wage quintile, and over two-thirds falling in the middle three quintiles. This funding scenario also supports a higher share of unionized jobs (50% more than the overall economy), which often translates into higher benefits and greater job security.
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Transportation Manufacturing Action Plan (TMAP) Scenario


Investing $30 billion into public transit capital and $10 billion into intercity/high-speed rail annually for six years would support 15,524 direct and indirect jobs for each billion dollars invested (or 3.7 million jobs for the entire proposal). Of those jobs, this funding scenario would generate 605,352 direct and indirect jobs specifically in manufacturing. Like the transit backlog scenario above, the TMAP transportation investment would support jobs targeted toward the middle class, with over half of the jobs going to workers with a high school education or less, and provide jobs with wages mainly in the middle of the wage distribution. This proposal would also create a similarly high share of unionized jobs.

Funding Scenarios
Transit Backlog Scenario
The first scenario addresses the transit backlog referenced in a recent report by the Federal Transit Administration (FTA). According to its analysis, fully 29% of all transit assets are in poor or marginal condition (FTA 2010a). To bring these systems into a state of good repair, the FTA estimates that an annual investment of $27.3 billion is needed over six years, for a total of $163.8 billion (FTA 2010b). The first set of jobs estimates model the employment impacts of the six-year public transit capital investment needed to attain a state of good repair.

Transportation Manufacturing Action Plan (TMAP) Scenario


The second scenario is proposed in the Apollo Alliances Transportation Manufacturing Action Plan (TMAP). This proposal goes even further, estimating the employment supported through expanded federal investment to not only achieve a state of good repair, but also to expand public transit service and build out a national intercity and high-speed rail system.1 The report estimates the job impact of an annual investment of $30 billion into public transit infrastructure and $10 billion into intercity and high-speed rail over six years, for a total of $180 billion in public transit capital and $60 billion in high-speed rail.

Methodology
For a discussion of the methodology, please see Pollack (2010).

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Direct and indirect jobs supported through the $163.8 billion transit backlog scenario
Direct Job characteristics Totals Gender Male Female Race White Black Hispanic Asian Other Union status Covered Non-covered Education Less than high school High school only Some college BA or greater Wage quintiles First (lowest) Second Third Fourth Fifth (highest) 196,299 356,755 370,892 329,821 232,727 194,466 222,120 229,497 217,049 195,711 390,764 578,875 600,389 546,870 428,437 13% 24 25 22 16 18% 21 22 20 18 15% 23 24 21 17 19% 21 20 20 20 296,637 612,447 402,207 175,202 120,823 371,961 305,602 260,457 417,460 984,408 707,809 435,659 20% 41 27 12 11% 35 29 25 16% 39 28 17 11% 31 30 28 327,020 1,159,473 140,509 918,333 467,530 2,077,806 22% 78 13% 87 18% 82 12% 88 932,110 177,112 329,599 23,177 24,494 692,088 149,322 155,612 44,560 17,261 1,624,198 326,434 485,211 67,737 41,755 63% 12 22 2 2 65% 14 15 4 2 64% 13 19 3 2 67% 11 15 4 2 1,221,318 265,175 674,903 383,939 1,896,221 649,115 82% 18 64% 36 74% 26 60% 40 1,486,493 1,061,228 2,547,721 58% Indirect Total Direct Indirect (% of total) 42% 100% Total Overall economy

Source: Authors analysis of BLS and Census data.

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Direct and indirect jobs supported through the $240 billion TMAP scenario
Direct Job characteristics Totals Gender Male Female Race White Black Hispanic Asian Other Union status Covered Non-covered Education Less than high school High school only Some college BA or greater Wage quintiles First (lowest) Second Third Fourth Fifth (highest) 285,357 529,616 550,464 493,696 355,424 277,383 313,755 324,456 309,147 282,985 562,740 843,372 874,921 802,843 638,409 12.9% 24 25 22 16 18% 21v 22 21 19 15% 23 24 22 17 19% 21 20 20 20 461,413 908,608 588,125 256,411 172,570 524,077 434,821 376,259 633,983 1,432,685 1,022,946 632,670 21% 41 27 12 11% 35 29 25 17% 38 27 17 11% 31 30 28 451,099 1,763,459 183,216 1,324,510 634,316 3,087,969 20.4% 80 12.2% 88 17.0% 83 12% 88 1,407,554 227,447 510,060 32,605 36,891 1,001,854 198,687 220,035 62,530 24,621 2,409,408 426,134 730,096 95,135 61,511 64% 10 23 1 2 66% 13 15 4 2 65% 11 20 3 2 67% 11 15 4 2 1,863,550 351,007 962,560 545,167 2,826,110 896,174 84% 16 64% 36 76% 24 60% 40 2,214,557 1,511,108 3,725,665 59% Indirect Total Direct Indirect (% of total) 41% 100% Total Overall economy

Source: Authors analysis of BLS and Census data.

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Industry and occupational breakdown of direct and indirect jobs from transit backlog scenario
Indirect Broad Industries/Occupations Broad industries Natural resources and mining Construction Manufacturing total Wholesale trade Retail trade Information Financial activities Professional and business services Education services Leisure and hospitality Other services Utilities Transportation and warehousing Government total Broad cccupations Management, business, and finance Professional Service Sales & related Office & admin. support Farm, fish, forest Construction & extraction Install, maintain, & repair Production Transport 145,663 42,946 39,237 18,797 102,628 465 660,988 91,626 99,942 284,199 150,044 124,559 80,945 101,169 152,628 6,586 25,077 54,607 131,151 232,076 295,707 167,506 120,182 119,966 255,256 7,052 686,065 146,233 231,093 516,275 0 937,387 180,183 0 0 0 0 0 0 0 0 0 368,923 0 19,132 3,613 223,778 68,529 83,378 34,775 48,804 139,045 1,171 43,398 100,158 4,393 52,612 215,628 19,132 941,000 403,961 68,529 83,378 34,775 48,804 139,045 1,171 43,398 100,158 4,393 421,535 215,628 Manufacturing Cement and concrete Iron and steel mills Steel product Aluminum Nonferrous metal Industrial machinery Metalworking machinery Engine, turbine, and power transmission Motor vehicle Motor vehicle body and trailer Motor vehicle parts Railroad rolling stock Other transportation Ports Water transportation Support activities for transportation 0 0 26 5,463 26 5,463 0 0 0 0 0 0 0 0 0 0 0 180,183 0 15,488 3,614 2,193 1,181 1,548 400 1,445 959 684 1,503 9,594 111 85 15,488 3,614 2,193 1,181 1,548 400 1,445 959 684 1,503 9,594 180,294 85 Construction 937,387 3,613 941,000 Warehousing 0 3,447 3,447 Transit Transit and ground Local govt. transit 368,923 0 2,002 207,316 370,925 207,316 Rail transportation 0 3,896 3,896 Direct Indirect Total Industry breakouts Industry breakouts Truck transportation 0 21,480 21,480 Direct (thousands) Total

Source: Authors analysis of BLS and Census data.

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Industry and occupational breakdown of direct and indirect jobs from TMAP
Indirect Broad Industries/Occupations Broad industries Natural resources and mining Construction Manufacturing total Wholesale trade Retail trade Information Financial activities Professional and business services Education services Leisure and hospitality Other services Utilities Transportation and warehousing Government total Broad cccupations Management, business, and finance Professional Service Sales & related Office & admin. support Farm, fish, forest Construction & extraction Install, maintain, & repair Production Transport 221,596 63,712 47,155 27,687 150,514 767 1,086,359 132,763 148,946 335,058 217,456 185,281 115,570 154,188 220,716 10,484 36,524 77,008 197,092 293,407 439,052 248,993 162,725 181,875 371,230 11,252 1,122,883 209,771 346,038 628,465 0 1,545,143 264,005 0 0 0 0 0 0 0 0 0 405,410 0 29,723 4,344 341,348 101,763 134,691 51,325 70,917 205,874 1,851 65,639 146,087 6,386 78,757 240,179 29,723 1,549,486 605,352 101,763 134,691 51,325 70,917 205,874 1,851 65,639 146,087 6,386 484,167 240,179 Manufacturing Cement and concrete Iron and steel mills Steel product Aluminum Nonferrous metal Industrial machinery Metalworking machinery Engine, turbine, and power transmission Motor vehicle Motor vehicle body and trailer Motor vehicle parts Railroad rolling stock Other transportation Ports Water transportation Support activities for transportation 0 0 38 7,766 38 7,766 0 0 0 0 0 0 0 0 0 0 0 264,005 0 25,217 5,457 3,315 1,801 2,302 601 2,119 1,272 1,005 2,199 12,559 146 110 25,217 5,457 3,315 1,801 2,302 601 2,119 1,272 1,005 2,199 12,559 264,150 110 Construction 1,545,143 4,344 1,549,486 Warehousing 0 5,076 5,076 Transit Transit and ground Local govt. transit 405,410 0 3,235 228,396 408,645 228,396 Rail transportation 0 6,105 6,105 Direct Indirect Total Industry breakouts Industry breakouts Truck transportation 0 32,952 32,952 Direct (thousands) Total

Source: Authors analysis of BLS and Census data.

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Direct and indirect manufacturing jobs by state, transit backlog scenario


Total manufacturing jobs 403,961 South Virginia West Virginia Northeast Maine New Hampshire Vermont Massachusetts Rhode Island Connecticut New York New Jersey Pennsylvania Delaware Maryland District of Columbia Midwest Ohio Indiana Illinois Michigan Wisconsin Minnesota Iowa Missouri North Dakota South Dakota Nebraska Kansas 22,279 15,730 19,866 17,329 14,838 10,094 6,862 8,714 795 1,283 3,060 5,648 1,774 2,277 1,048 8,621 1,446 5,648 16,088 9,004 19,405 949 3,868 48 West Montana Idaho Wyoming Colorado New Mexico Arizona Utah Nevada Washington Oregon California Alaska Hawaii 602 1,910 298 4,347 1,060 5,256 3,798 1,455 8,766 5,877 42,937 398 449 North Carolina South Carolina Georgia Florida Kentucky Tennessee Alabama Mississippi Arkansas Louisiana Oklahoma Texas 7,970 1,696 15,495 7,302 12,299 11,233 7,380 10,898 8,576 4,820 5,500 4,591 4,539 27,833

Source: Authors analysis of BLS and Census data.

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Direct and indirect manufacturing jobs by state, TMAP scenario


Total manufacturing jobs 604,084 South Virginia West Virginia Northeast Maine New Hampshire Vermont Massachusetts Rhode Island Connecticut New York New Jersey Pennsylvania Delaware Maryland District of Columbia Midwest Ohio Indiana Illinois Michigan Wisconsin Minnesota Iowa Missouri North Dakota South Dakota Nebraska Kansas 33,385 23,572 29,770 25,969 22,236 15,126 10,283 13,059 1,192 1,923 4,586 8,464 2,659 3,413 1,571 12,919 2,167 8,464 24,109 13,492 29,079 1,422 5,796 72 West Montana Idaho Wyoming Colorado New Mexico Arizona Utah Nevada Washington Oregon California Alaska Hawaii 903 2,862 447 6,514 1,589 7,877 5,692 2,180 13,136 8,807 64,342 596 673 North Carolina South Carolina Georgia Florida Kentucky Tennessee Alabama Mississippi Arkansas Louisiana Oklahoma Texas 11,944 2,541 23,220 10,942 18,431 16,833 11,059 16,332 12,851 7,222 8,243 6,879 6,803 41,709

Source: Authors analysis of BLS and Census data.

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Endnotes
1. In 2008, Cambridge Systematics found that an annual investment of $59.2 billion at all levels of government would be needed to bring all assets into good condition and expand and modernize public transit systems to accommodate a doubling in ridership over 20 years (Cambridge Systematics 2008). Historically, the federal share of total transit capital investment has been between 40% and 50% since 1990 (American Public Transportation Association 2010). Given the current fiscal crises facing state and local governments and transit agencies, TMAP assumed that the federal government would need to shoulder approximately 50% of the total transit capital investment needed to double ridership by 2030. The estimate for total rail spending is based off of a study conducted by the Passenger Rail Working Group for the National Surface Transportation Policy and Revenue Study Commission, which estimates that an annual investment of $8.1 billion was needed to support an improved national rail network through 2050. This initial estimate included just one highspeed rail line (in California). Since then, planning and development for several new high-speed rail corridors has advanced in California, Florida, and the Midwest, aided by the American Recovery and Reinvestment Act (ARRA). To accommodate for the improvement and expansion of our existing intercity rail service, plus the continued development of these high-speed rail projects, TMAP estimated that a total investment of $10 billion is needed each year.

References
American Public Transportation Association. 2010. 2010 Public Transportation Fact Book: Appendix A: Historical Tables. Washington, D.C., April. Table 37, Page 47. http://www.apta.com/resources/statistics/Documents/FactBook/2010_Fact_Book_ Appendix_A.pdf Bivens, Josh and Ethan Pollack. 2010. An Analysis of Transportation for Americas Jobs Proposals. Economic Policy Institute, Washington, D.C. February 4. http://www.epi.org/publications/entry/ib271/ Cambridge Systematics 2008. State and National Public Transportation Needs Analysis. Requested by the American Public Transportation Association and the American Association of State Highway and Transportation Officials. Bethesda, Md.. September 9. http:// www.apta.com/gap/policyresearch/Documents/transit_needs_studies.pdf Passenger Rail Working Group. 2007. Vision for the Future: U.S. Intercity Passenger Rail Network Through 2050. National Surface Transportation Policy and Revenue Study Commission. Washington, D.C., December. http://www.dot.wisconsin.gov/projects/state/docs/ prwg-report.pdf Federal Transit Administration. 2010a. Next Stop: A National Summit on the Future of Transit. Administrator Rogoffs remarks delivered at the Federal Reserve Bank of Boston, May 18. http://www.fta.dot.gov/news/speeches/news_events_11682.html Federal Transit Administration. 2010b. National State of Good Repair Assessment 2010. Washington, D.C., June. http://www.fta. dot.gov/documents/National_SGR_Study_072010(2).pdf Pollack, Ethan 2010. The Job Impact of Transportation Reauthorization. Economic Policy Institute, Washington, D.C. June 24. http:// www.epi.org/publications/entry/the_job_impact_of_transportation_reauthorization/

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