Are state and local mass transit projects really job creators?

subway3.jpgSure they are - but so is the opening of a Trader Joe's. When Congress passed a transportation bill last week that created a funding mechanism for 12 local mass transit projects, Mayor Villaraigosa called it a "game changer." But drill down a bit and the story gets murkier. From this morning's Business Update on KPCC:

Lacter: The subway extension, just as an example, is expected to generate around 40,000 jobs, which is a nice round number and sounds impressive, but it also covers the life of the project, which is at least 10 years - and probably a lot more judging by the way these things typically go. And as with any construction work, these are not full-time permanent positions and they might not become available for many years down the line. Matter of fact, calculating the number of jobs created for any public works project is subject to lots of different interpretations.

Steve Julian: Is there a good example of how that plays out?

Lacter: I'm thinking of the modernization program at LAX. That was supposed to create 40,000 jobs, according to a study. But the number includes lots of assumptions about jobs being created indirectly. So, for example, I have to hire more people at my sandwich shop near the airport - that kind of thing. But stuff like that is hard to verify. All we know for sure is that on a daily basis, only 1,000 people are actually working on construction of the international terminal, which is a long way from 40,000.

Julian: That's better than nothing, right?

Lacter: Absolutely. But L.A. County has a total workforce of 4.3 million. So a thousand or even a few thousand positions is not exactly what you would call a "game changer." All of which is a big deal because the MTA projects, especially the subway, are being promoted just as much for their creation of jobs as for any kind of relief from traffic congestion. So we should be careful about those job estimates.

Meanwhile, the farm bureaus in Merced and Madera counties are challenging the high-speed rail project in court, claiming that the rail line would disrupt 1,500 acres of farmland (one of the arguments is that the wind from passing trains would disrupt bee pollination). This is the problem with major projects - they're just extremely difficult to pull off in a timely and cost-effective basis. Yet politicians love them because it's something they can point to - for better or worse.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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