Since the start of the COVID-19 pandemic, the Tri-State region has lost more than 2.2 million jobs and has an unemployment rate that sharply increased to 15.1 percent. As with every aspect of this crisis, the job loss has fallen most heavily on people of color, widening deep, pre-existing racial and economic divides. At the national level unemployment is higher among Blacks and Latinx, with an unemployment rate of 16.6 and 17.2 percent respectively, compared to 12.1 percent for white workers. Within our region, the Black and Latinx labor force also tends to be employed in more vulnerable occupations and in sectors that have been hardest hit by the pandemic.
Some jobs will come back as workplace restrictions are lifted under phased reopening plans in New York, New Jersey and Connecticut, but many will not. The region’s economy is likely to stay depressed for years to come, with some projecting that it will take until 2024 or later for New York City and other parts of the region to return to pre-COVID employment levels.
Nearly everyone’s list of economic stimulus proposals includes stepping up investments in infrastructure, repairing and modernizing the trains, bridges, broadband, power, parks, schools, and public buildings that make the economy run and improve health and quality of life. These investments are always necessary for economic growth, and they make even more sense when the economy is in decline.
They get people back to work when there is a large supply of underutilized labor and material. Since infrastructure projects have long-term paybacks, they can be financed with long-term debt at a time when interest rates are low. And they can improve productivity and growth potential while they provide an immediate boost to a flagging economy.
If done the right way, infrastructure investments can create a more equitable and sustainable future. Workforce and business development programs can provide jobs, skills, career ladders, and entrepreneurial opportunities to the most disadvantaged. Projects can improve public goods and services like transit and parks that bring the greatest benefits to those who can’t afford cars or private amenities, and improve everyone’s health with cleaner air and water and cooler, climate-resilient communities. They can even heal communities that have suffered from past projects that intentionally divided communities with highways, burdened them with noxious facilities, or left them without adequate transit or Internet access.
At no time since the Great Depression has there been a greater need for an ambitious public works program. The foundation for any public works agenda should be the capital plans that we already have in place. The plans for the City of New York (NYC), the Metropolitan Transportation Authority (MTA), the Port Authority of New York & New Jersey (PA) and New Jersey Transit (NJT) are already the most ambitious that the region has had in decades. In addition, the New York City Housing Authority (NYCHA) requires an additional $32 billion to repair decaying apartments, with the City’s NYCHA 2.0 plan addressing all but $8 billion of this need. Together, these total $212 billion dollars, with most of it planned for the next five years. There are other state agencies and local governments with capital plans, but these represent the lion’s share of capital spending in the region.
If fully funded and implemented, these plans would generate an estimated 263,000 jobs per year from construction, purchases of materials and services, and the increased purchasing power of those directly employed.
Together and over the course of their implementation, these plans could have the capacity to generate the equivalent of 1.3 million years of full-time employment (FTE), with the vast majority of these jobs within the Tri-State region.
While each capital plan has its own study to estimate economic impacts, most use similar methodologies and use job multipliers that fall within the range of 6,100 and 6,800 jobs created for every billion dollars spent. The MTA’s five-year capital investment strategy alone, could generate more than $75 billion of statewide economic activity, and create nearly 350,000 full-time employees (FTE) throughout the State. This translates to 6,386 jobs created for every $1 billion dollars spent on the capital program. Similarly, the Port Authority estimates that its capital plan would generate 6,863 jobs for every billion dollars, and the recently released NJT capital plan puts the number at 6,533 jobs. A study based on comprehensive green retrofits to solve NYCHA’s physical needs estimates the creation of 6,732 jobs for every billion dollars spent.
The problem, of course, is that at a time when these investments are most needed, all of the revenue sources that support capital projects are plunging, from dedicated taxes to toll and fare revenues. None of these plans are fully funded, and even funding that has been already committed is at risk.
The federal government is the only level of government that can fill the gap with deficit spending, a fiscal strategy that most economists agree is justified in a recession. There is much that state and local governments can do to speed projects along and deliver them more efficiently, but even the biggest new local source on the table—New York’s congestion pricing program—is being held up for lack of federal decisions.
There are many needs, from climate adaptation to neighborhood schools and libraries, that aren’t fully addressed in these plans. A truly transformational public works program would need to be larger, more innovative and reform how communities are involved in decision-making. But the starting point is to fund the capital plans that we already have.
