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Federal Funding

Report: Investing in Transit Could Create 180,000 Jobs, for Free

2:53 PM EDT on September 3, 2010

Between calls for renewed stimulus on the one hand and for deficit reduction on the other, Washington, D.C. is stuck. A new report by the Transportation Equity Network, however, shows one easy way out of that political stalemate: shifting our transportation spending to transit.
According to the report, written by University of Missouri-St. Louis researchers Todd Swanstrom, Will Winter, and Laura Wiedlocher, every dollar spent on funding transit creates more jobs than spending on roads. Specifically, each billion dollars spent on transit creates 36,108 jobs while the same figure can only buy 30,319 jobs. That means that by reassigning some federal spending from roads to transit, Congress could boost employment without adding a cent to the deficit.
What's more, the feds could create even more jobs by making sure those transit dollars went to operating budgets rather than capital projects. A billion dollars in transit capital projects creates 23,788 jobs, the authors say, less than road funding. But spending a billion dollars on operations generates 41,140 jobs.
So what kind of impact could that have on our struggling economy? The researchers pored through the transportation plans of 20 metro regions and figured out how much each was spending on roads and transit. Using those numbers, they show that by shifting 50 percent of each region's highway spending to transit, you could create 180,150 more jobs. And that doesn't even include enormous regions like Dallas, Houston, or Miami; across the country, the number of new jobs would be even higher than 180,000.
Of course, the report's conclusion depends on the accuracy of those job formulas. The multiplier for highway spending was taken from a model contracted by the Federal Highway Administration and adjusted downward by the authors to exclude the cost of land acquisition, while the transit formulas were taken from a report by the American Public Transit Association.
Spending on transportation operating expenses, like this bus driver's salary, create the most jobs, according to a new report. Photo: via Flickr.
Spending on transportation operating expenses, like this bus driver's salary, create the most jobs, according to a new report. Photo: via Flickr.

Between calls for renewed stimulus on the one hand and for deficit reduction on the other, Washington, D.C. is stuck. A new report by the Transportation Equity Network, however, shows one easy way to put people back to work without increasing federal spending: shifting our transportation investment to transit.

According to the report, written by University of Missouri-St. Louis researchers Todd Swanstrom, Will Winter, and Laura Wiedlocher, every dollar spent on funding transit creates more jobs than spending on roads. Specifically, each billion dollars spent on transit creates 36,108 jobs while the same figure can only buy 30,319 road jobs. That means that by reassigning some federal spending from roads to transit, Congress could boost employment without adding a cent to the deficit.

The multiplier for highway spending was taken from a model contracted by the Federal Highway Administration and adjusted downward by the authors to exclude the cost of land acquisition, while the transit formulas were taken from a report by the American Public Transit Association.

The report also shows how the feds could create even more jobs by making sure those transit dollars go to operating budgets rather than capital projects. A billion dollars in transit capital projects creates 23,788 jobs, the authors say, less than road funding. But spending a billion dollars on operations generates 41,140 jobs.

And operating budgets are in desperate need of stimulus. Transit systems across the country have been raising fares, cutting service, and shedding jobs since the onset of the recession, and the crisis far from over. In Pittsburgh, for instance, the Port Authority is currently moving ahead with plans cut bus service by 35 percent and raise fares.

So what kind of impact could shifting transportation investment have on our struggling economy? The researchers pored through the transportation plans of 20 metro regions and figured out how much each was spending on roads and transit. Using those numbers, they show that by shifting 50 percent of each region's highway spending to transit, you could create 180,150 more jobs. And that doesn't even include enormous regions like Dallas, Houston, or Miami; across the country, the number of new jobs would be even higher than 180,000.

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