Why is infrastructure different? (Part 4)


Having looked at the pitfalls and the challenges, what are the benefits of infrastructure investment?. Where do I begin? It's sad to say that if you wanted it delivered on time and under budget, the best route would be to get the Chinese to build it, but that's not the object of the exercise. I'm going to assume for the purpose of this post, all the relevant skill sets are available from within the US jobs market. That's not a requirement, specifically at the high skill level posts. The use of overseas labor in high level engineering roles, will not have any significant impact to devalue the economic benefit.


The whole key to unlocking economic growth is job creation. In particular, job creation for non college educated workers. Pre pandemic (2019), the highest unemployment rates were in West Virginia at 5.2%, with Arizona and New Mexico close behind at 5.1%. There were a whole host of states above 4%, so even before the pandemic, Trump's smoke and mirrors propaganda, failed to look at how to address regional unemployment. If you would like to see a map with these stats from the Bureau of Labor Statistics, please take a look here.


Infrastructure needs will of course vary. However, there is not a part of the country that will not generate jobs to meet infrastructure upgrade requirements. This allows the 'feel good' factor to be spread equally amongst red and blue states, letting the need dictate the level of investment. The challenge for the Dems, is to re-engage with none college educated white voters that previously felt abandoned and flocked to Trump, as his messaging poisoned the well. There is good reason to believe that many of these will remain cult of Trump devotees, but I rather suspect, a small proportion may be persuaded, if they can get well paid jobs and see a better tomorrow on the horizon. A shift from these voters, is enough to keep the Republicans out of power for some considerable time. The point that needs to be understood, is infrastructure investment should not really be political, it should simply be for the betterment and welfare of society. I know, I know I'm living in a dreamworld, but from a purely objective point of view, that's how it should be approached.


Now let's take a look at the reality. The pandemic has wiped out some jobs for good, they simply aren't coming back, so it's a case of having to backfill them with better paid work tied to The American Jobs Plan. We spoke about low skilled jobs being a key to spreading the benefits of the investment across the working population. Equally, there will be all sorts of associated administration roles that can help fill some of the jobs lost to the pandemic too. To quote from the White House Fact Sheet;


"..unlike past major investments, the plan prioritizes addressing long-standing and persistent racial injustice. The plan targets 40 percent of the benefits of climate and clean infrastructure investments to disadvantaged communities. And, the plan invests in rural communities and communities impacted by the market-based transition to clean energy".


For the first time in US history as far as I can see, the Biden administration is looking at wider US society, to see how it can focus the benefit of the plan to disadvantaged communities, with one eye on the need for a transitional shift in jobs to meet new clean energy objectives. The important need here, is to mitigate the fear argument that lots of people are going to lose jobs tied to old energy production, as the transition to new green energy takes place. It's a very cost efficient method of using public investment to help cushion the transition from old to new.


There is no question that infrastructure is far reaching and complex, the GOP like to break it up into roads and bridges so they can say anything outside of that is a 'radical left' socialist project. It's a matter of educating people about the real meaning of the term 'infrastructure'. A great example of this is in the care sector. I understand why people think investing in this as infrastructure is nonsense, but take a step back. The care sector is beyond vital to supporting economic growth. Bear with me as you scratch your head, because it's also racist too. Before you ask if I have my woke t-shirt on, think about this. Without the care sector, and support for care givers in the home, large numbers of workers would be excluded from the jobs market. This is a direct impediment to economic growth. What is more, jobs in the care sector are massively undervalued, as we expect low paid workers often from minority communities, to look after our sick and elderly loved ones. To quote the action plan;


These workers – the majority of whom are women of color – have been underpaid and undervalued for too long.


You will recall that during the pandemic, the widely held GOP view was, the elderly were acceptable collateral damage for the rest of America to live a normal life. I suppose at the alter of greed and power, the vulnerable are a sacrifice worth making? Investing in this sector is a societal imperative, if the US wants to move towards a more equitable society. Remember, if you pay these workers more, the money you pay out will almost certainly flow straight back into the economy, supporting retail etc. Now ask yourself if the care sector is infrastructure and I think you will find that it is an integral part of an economic growth plan.


The key statement in the White House fact sheet is this;


The President’s American Jobs Plan is a historic public investment – consisting principally of one-time capital investments in our nation’s productivity and long-term growth. It will invest about 1 percent of GDP per year over eight years to upgrade our nation’s infrastructure, revitalize manufacturing, invest in basic research and science, shore up supply chains, and solidify our care infrastructure.


The reason it's transformative and consequential, is the out of the box joined up thinking that has led to its publication. If America want's something to celebrate right here, right now, it is that this administration has had some of the greatest minds in the world contribute to what is a detailed strategic plan to actually 'Make America Great Again, rather than just talk about it.


Tomorrow we'll focus on efficiency and planning both on a practical level and on a political level.

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