Always ready to help a fellow New Yorker
❝ In his address to Congress…President Donald Trump once again brought up his support for a large infrastructure package. And there’s good reason for this: It’s not nearly as polarizing as most other parts of his agenda and would stimulate economic growth in a way that would benefit blue-collar workers who were key to his election. But like much of his agenda, it’s short on details, and the labor-market math doesn’t add up.
❝ Here’s the napkin version. The trillion-dollar package being discussed is understood to be $100 billion of spending per year for 10 years. Leave aside the fact that infrastructure spending is notoriously messy and slow, as environmental delays and other project-specific concerns make it hard to spend the money as fast as a policymaker or economist would like. The labor question alone shows that this vision is impossible.
❝ There are currently 6.8 million construction employees in the U.S. Annualized construction spending in the U.S. at the end of 2016 was $1.18 trillion. Dividing the two, we see that one construction worker supports around $175,000 in construction spending. (This doesn’t mean that construction workers make $175,000 per year — that figure accounts for other labor-supporting projects and building materials.)
One more simple calculation shows the daunting labor needs. If one construction worker can support $175,000 worth of construction projects, then $100 billion in spending each year would require an additional 570,000 construction workers, which doesn’t take into account truck drivers, project managers, environmental specialists, and all other support staff needed to complete projects. Perhaps infrastructure spending, which comprises 25 percent of all construction spending, is a little less labor-intensive than other types of construction spending. Maybe the shrewd administrative talent of this White House could generate some labor efficiencies. That still probably means 400,000 or 500,000 construction workers needed, not 50,000.
❝ How realistic is construction employment growth of 570,000 workers? It hasn’t happened since 1946. Even the peak of the housing bubble generated only one brief year-over-year increase of 500,000 construction workers.
The infrastructure proposal is among Trump’s most politically viable, but economics will kill it.
RTFA for the rest of the gory details. Trump is not only incompetent to develop and lead our nation into a construction project of national importance — he isn’t cunning enough to seek out advice and structural leadership from any of the talent we have in abundance in the GOUSA.