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Investments and Job Creation

With the federal transportation bill up for renewal, the United States has an opportunity to invest in public transportation and renew its manufacturing base. This report reveals that the country could gain more than 79,000 jobs in rail and bus manufacturing and related industries under an investment scenario sufficient to double transit ridership in 20 years. If the United States were to invest at even higher levels—similar to those of China—this would yield more than a quarter million jobs.

The United States needs urgently to revive its rail and transit industry. The nation’s manufacturing sector accounts for over 10 percent of GDP, but manufacturing has seen job losses in the millions in recent years. And the U.S. trade deficit continues to rise. The country needs new manufacturing jobs now to address the trade deficit and to put unemployed Americans back in well-paying jobs.

This report uses three scenarios to estimate the job creation potential from increased federal investment in rail and transit. A “Business-as-Usual” scenario would invest $2.7 billion in rail vehicles and $2.8 billion in bus purchases. An “Increased Domestic Investment” scenario would invest $7.2 billion and $4.8 billion, respectively, toward these purchases. And an “International Competitiveness” scenario would invest $24.4 billion and $12.8 billion, respectively—a level that is comparable to China’s investment in rail and bus vehicles.

The “Business-as-Usual” scenario yields 34,563 jobs in U.S. rail car and bus manufacturing and their supplier industries. The “Increased Domestic Investment” scenario would support 79,343 jobs, and the “International Competitiveness” scenario would yield 252,213 jobs. The number of jobs would increase significantly if more than the required 60 percent of inputs (as specified by the Buy America provision) were produced domestically. These jobs would stimulate thousands more jobs in other sectors of the economy.

If U.S. manufacturing is to experience a serious revival that produces more than fragmented showcase projects and scattered jobs, the federal government needs to take much bolder policy action that creates demand and supports research and development in key industries.

Associated Press Posts