NCPA - National Center for Policy Analysis

FEDERAL HIGHWAY SPENDING: THE SLOW LANE TO JOBS CREATION

June 22, 2004

The Federal Highway Program has been touted for its job-creation potential, however, the program does not consider the effects of government spending on the private sector, says researcher Ronald D. Utt.

Indeed, a study by the General Accounting Office revealed that another federal spending program, the Emergency Jobs Appropriation Act of 1983, did little to relieve double-digit unemployment:

  • The creation of 35,000 jobs by June 1984 is attributed to the Act -- less than one percent of the 5.8 million jobs created by the private sector economy to that point from the Act?s inception.
  • The 35,000 jobs cost taxpayers $257,142 per job.
  • By June 1985, the jobs created by the Act declined to about 8,000.

The current federal highway spending bill does not consider the creation of jobs versus the creation of value -- whether the jobs created actually add to the creation of products and services that are really valuable to the public, says Utt.

Source: Ronald D. Utt, "Highways and Jobs: The Uneven Record of Federal Spending and Job Creation," Backgrounder No. 1747, Heritage Foundation, April 15, 2004 and "Federal Agencies? Implementation of the 1983 Emergency Jobs Appropriations Act," General Accounting Office, November 28, 1983.

 

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