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Three Infrastructure Approaches: An Analysis

Abstract:

Infrastructure in America is in a dire state. In 2017, The American Society of Civil

Engineers gave American infrastructure a D+ rating on an A to F grading scale with an especially

low rating in transits [1]. Many politicians have proposed a spending bill to address this issue,

however, the abilities of such a plan to create jobs has been disputed by many politicians. This

report examines the potential of three different perspectives on the American Infrastructure

problem, the Democrats, the Republicans, and Trumps, and look specifically at their ability to

create a significant number of engineering jobs. Through research and study, President Donald

Trumps approach appears to produce the most engineering jobs.

Methods:

First, a way of determining a significant number of engineering jobs will be determined.

Secondly, background will be given on past American infrastructure projects and their job

creating capabilities, and also provide information on the modern plans. Thirdly both studies and

real world examples will be examined to observe the engineering job creating capabilities of the

three approaches. Lastly, a conclusion will be made about which plan is the best in producing

engineering jobs.

According to the U.S. Bureau of Labor Statistics, in 2014, there were approximately two

and a quarter million engineering jobs in the United States [2]. Although this may sound like a
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large number, currently there are approximately three hundred and twenty five million people

currently residing within the United States, according to the U.S. Census [3]. For the purposes of

this paper, we will assume that a significant change in the number of jobs is equivalent to having

at least a one percent increase in the number of engineering jobs. By simple calculations, this

would show that there would need to be at least twenty-two thousand and four hundred new

engineering jobs in order to have a significant impact.

Background:

The first major infrastructure project of American history was the foundation of the

Civilian Conservation Corps. during the Great Depression. As stated in An Overview of the

Civilian Conservation Corps., the Civilian Conservation Corps. was founded in 1933 by

President Franklin D. Roosevelt because many Americans were without jobs due to the Great

Depression. This organization would put these men to work on public projects such as laying

roads and constructing telephone lines [4]. While there are no distinct numbers which state how

many engineering jobs were created, CCCLegacy.org reports that there were approximately six

hundred thousand officers, supervisors, education advisors and administrators working for the

Civilian Conservation Corps [5]. In this context, it is fair to say that many of the supervisors and

administrators are in fact engineers. For there to have been a significant number of engineering

jobs created, only slightly less than four percent of these jobs would have had to have been

engineers. Although one cannot know for sure, one can reasonably say that a significant number
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of engineering jobs were created. Although the circumstances surrounding this example are very

different from our modern day and age, it does prove that the government has the capacity to

create a significant number of engineering jobs. However, although it is possible, it is not

necessarily plausible. The Civilian Conservation Corps. was created specifically to create jobs.

A modern infrastructure project would likely focus more on creating new infrastructure than

creating new jobs.

If you fast forward thirty years, you arrive at the next large-scale American infrastructure

project, the public interstate system. In 1956, President Dwight D. Eisenhower signed the

Federal Aid Highway Act which authorized twenty-six billion dollars, or about two hundred and

thirty billion dollars in todays money, of public funds to be spent on creating a U.S. roadway

system, according to History.com [6]. Like in the previous example, one cannot be precisely

sure about how many engineering jobs were created by Eisenhower, it is plausible to say that

through the he did create a significant number of jobs with the Federal Aid Highway Act. Over

the course of Eisenhowers presidency, he created approximately three million jobs [7]. For him

to have created a significant number of engineering jobs, approximately three-quarters of a

percent of the jobs he created must have been engineering jobs. Although one cannot be entirely

sure, it is reasonable to believe that he created a significant number of engineering jobs using

public funds. Using data from past American history, it is reasonable to state that private funds

can be used to create a significant number of engineering jobs.

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The Three Approaches:

The most unique aspect of Donald Trumps infrastructure plan is that it utilizes both

public and private funds to restore American infrastructure [8]. According to Forbes, Trump has

proposed one hundred and forty billion dollars in infrastructure spending. Approximately forty-

five percent of this investment will be placed in the railway system, and both roadways and

energy will receive fifteen percent of this budget apiece [9]. However, Trumps infrastructure

plan does not stop there. According CNBC, Trumps infrastructure plan also will rely on private

funding, through tax cuts for companies that assist with the construction [8]. Overall, estimates

show that, as Time Magazine calls it, Trumps public-private partnership plan should total

approximately one trillion dollars being put into infrastructure [10].

The Democrats plan involves solely public funding. According to The Washington Post,

their plan consists of spending approximately one trillion dollars to improve Americas

infrastructure [11]. Fox News reports that about two hundred and ten billion of these dollars will

go to administering repairs on public roadways and bridges, and another one hundred and eighty

million dollars will be used to upgrade American bus and railway systems [12].

Lastly, the Republicans plan for infrastructure spending is that there should not be any.

They have two primary reasons for this position. First, according to The Washington Post,

Republicans are wary of any large scale spending because the United States has a national debt

of approximately twenty trillion dollars and do not wish greatly increase it [11]. Secondly, they
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believe that infrastructure spending creates little to no long-term economic growth, as reported

by Politico [13].

Comparison:

Trumps plan does have many potential benefits and drawbacks to it. According to

Mason B. Williams of the The Atlantic, private infrastructure projects tend to be of better quality

than publicly funded ones, as private enterprises are eager to prove their superiority in managing

projects over the government [14]. However, one of the major concerns that Cory Schouten of

CBS News voices is that of profit. Businesses tend to invest where there is profit to be made,

which means that projects that make good money will be the only ones undertaken, regardless of

where the actual needs lie. This also means that certain areas which are less profitable such as

water and sewage, will not receive as much of a private investment as highly profitable

enterprises such as roadways and bridges [15].

The benefits of the Democrats plan are based upon the concerns over Trumps plan.

Unlike Trumps plan, which follows the profit, the Democrats plan would be able to repair the

infrastructure where it is most needed. However, this plans drawbacks directly stem from the

advantages of Donald Trumps plan. This plan would likely be of poorer quality and not last as

long.

The biggest benefit to the Republicans stance is that the government save billions of

dollars of government spending. However, this amazing upside comes with the enormous
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downside that no infrastructure gets repaired or built. Of course, if there is nothing being

constructed, this means that there is no potential for job creation. However, if infrastructure does

not create a significant number of engineering jobs, it would be the most economical decision for

the government to undertake.

Analysis:

The first of these that this report examines is a 2014 study conducted by Josh Bivens of

the Economic Policy Institute. This study uses three different scenarios to demonstrate job

production: where thirty billion dollars would be spent annually for the duration of a decade,

where ninety-two billion dollars would be spent annually for the duration of a decade, and where

two hundred and fifty billion dollars would be spent annually for the duration of six years. In the

first scenario, after factoring in dozens of variables, it is estimated that there will be

approximately thirty-two thousand jobs created which require a bachelors degree or higher. For

a significant number of engineering jobs to have been made, approximately seventy percent of

these jobs would have to be in engineering, which seems possible, but is not necessarily the case

because there are people with college degrees who manage the monetary side of these projects

who are not engineers. However, in the next scenario, only about thirteen percent of the jobs

would need to be engineering jobs, and in the last scenario only about five percent. From this

evidence, it is apparent that infrastructure has the ability to create a significant number of

engineering jobs if there is significant spending [16].

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This next study examines the ability of a private-public partnership creates more jobs.

According to Rachel Weber, private-public partnerships are very poor at creating jobs. In an

article authored by Weber, it is argued that this is because private companies are mostly

concerned with procuring profits for themselves and do not like the lack of surety in the informal

arrangements made by politicians [17].

However, despite Webers logic, public-private partnerships do happen and can be highly

effective in creating jobs. According to a 2017 study, the African nation of Nigeria has been

plagued with unemployment, especially amongst their youth. Although the government started

to hire the unemployed and set them to work on building infrastructure, the government lacked

the proper resources needed to fund these infrastructure projects. From this problem, the authors

of this study concluded that Nigeria should undertake in a public-private partnership, because

there would be more monetary resources at the disposal of the government [18].

Although there are many differences between the country of Nigeria and the United

States, there are also many similarities. There are only so many tax dollars that the government

is able to work with, with undeniably more dollars in the private sector. With labor being one of

the most expensive costs, it stands to reason that with more money, more engineers could be

hired.

An example of the ability of the public-private partnership to create engineering jobs can

be seen in the Asian country of Malaysia. In around 2010, Malaysian President Najib bin Tun

Abdul started creating numerous public-private partnerships in order to boost his countrys
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economy, which did just that. Through this, Malaysias economy skyrocketed and became one of

the best in the world by 2012. In this effort to procure economic growth through public-private

partnerships, the government effectively incentivised Malaysian companies to work at marginal

oil and gas fields [19]. It stands to reason that if these oil companies were searching for fossil

fuels in more areas, they would require more engineers to manage those projects, thereby

creating more engineering jobs than the government could have on their own.

Conclusion:

From this data, it is thereby possible to determine which plan would create the most

engineering jobs. Through the data both from American history and from modern infrastructure

estimates, it is evident that infrastructure spending does create a significant amount of

engineering jobs, thereby ruling out the Republicans plan as the best option for engineering jobs.

This leaves the only two options as being Donald Trumps plan and the Democrats plan. Rachel

Webers study, which states that private-public partnerships create very few jobs [17], seems to

remove Donald Trumps plan from the picture. However, Webers reasoning is contradicted by

real world examples. In Nigeria, a public-private partnership could create more jobs than the

government ever could on its own [18], and in Malaysia, government incentives proved to be

very effective in creating more engineering jobs, as seen in their natural gas industry [19]. From

this line of reasoning, based on my research, it appears that public-private partnerships, if done
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right, have the greatest ability to create engineering jobs, thereby making Donald Trumps

infrastructure plan the one that will create the most engineering jobs.
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References:

[1] 2017 Infrastructure Report (1st Edition) [Online]. Available:

http://www.infrastructurereportcard.org/

[2] Architecture and Engineering Occupations [Online]. Available:

https://www.bls.gov/ooh/architecture-and-engineering/home.htm

[3] U.S. and World Population Clock [Online]. Available: https://www.census.gov/popclock/

[4] J. W. Studebaker. An Overview of the Civilian Conservation Corps, Junior-Senior High

School Clearing House, vol. 10, no. 3, pp. 134-138, November, 1935.

[5] CCC Brief History [Online]. Available: http://www.ccclegacy.org/CCC_Brief_History.html

[6] The Interstate Highway System [Online]. Available: http://www.history.com/topics/interstate-

highway-system

[7] Jobs created during U.S. presidential terms [Online]. Available:

https://en.wikipedia.org/wiki/Jobs_created_during_U.S._presidential_terms

[8] Y. Mui. (2017, March 31). Breaking down Trumps $1 trillion infrastructure plan (1st

Edition) [Online]. Available: http://video.cnbc.com/gallery/?video=3000606343

[9] H. Warfield. (2017, January 31). 3 Charts That Show the Surprising Scope Of Trumps

Infrastructure Plan (1st Edition) [Online]. Available:

http://www.forbes.com/sites/datadesign/2017/01/31/3-charts-that-show-the-surprising-

scope-of-trumps-infrastructure-plan/#60bf42fc1c52
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[10] Z. J. Miller. (2017, March 30). Inside the White Houses Infrastructure Plan (1st Edition)

[Online]. Available: http://time.com/4717629/trump-infrastructure-plan-details/

[11] E. OKeefe and S. Mufson. (2017, January 24). Senate Democrats unveil a Trump-size

infrastructure plan (1st Edition) [Online]. Available:

https://www.washingtonpost.com/politics/democrats-set-to-unveil-a-trump-style-

infrastructure-plan/2017/01/23/332be2dc-e1b3-11e6-a547-5fb9411d332c_story.html?

utm_term=.b8b3192fb09f

[12] B. Singman. (2017, January 25). Democrats pitch $1T infrastructure plan - will Trump get

on board? (1st Edition) [Online]. Available:

http://www.foxnews.com/politics/2017/01/25/democrats-pitch-1t-infrastructure-plan-will-

trump-get-on-board.html

[13] K. A. Wolfe and L. Gardner. (2016, November 11). Conservatives vs. Trumps

infrastructure plan (1st Edition). [Online]. Available:

http://www.politico.com/story/2016/11/conservatives-vs-trumps-infrastructure-plan-

231221

[14] M. B. Williams. (2017, January 17). Would Trumps Infrastructure Plan Fix Americas

Cities? (1st Edition) [Online]. Available:

https://www.theatlantic.com/politics/archive/2017/01/trump-infrastructure-cities/512432/
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[15] C. Schouten. (2016, November 29). A potential pothole in Trumps infrastructure plan (1st

Edition) [Online]. Available: http://www.cbsnews.com/news/donald-trumps-

infrastructure-plan-has-a-potential-pothole/

[16] J. Bivens. (2014, July 1). The Short- and Long-Term Impact of Infrastructure Investments

on Employment and Economic Activity in the U.S. Economy (1st Edition) [Online].

Available: http://www.epi.org/publication/impact-of-infrastructure-investments/

[17] R. Webber. Why Local Economic Development Incentives Don't Create Jobs: The Role of

Corporate Governance: 1998 R. Marlin Smith Student Writing Competition Award

Winner, The Urban Lawyer. vol. 32, no. 1, pp. 97-119, 2000.

[18] F. A. Adebayo and E. T. Ayegbusi. Public-Private Partnership as Mechanism for

Employment Creation in Nigeria, Journal of Education and Practice. vol. 8, no. 9, pp.

178-185, 2017.

[19] M. Hershman. (2012, May 22). The Malaysian Third Way: A Private Public Partnership

(1st Edition) [Online]. Available:

https://www.forbes.com/sites/forbesasia/2012/05/22/the-malaysian-third-way-a-public-

private-partnership/#7f6eb56929f1