AP: Road Projects Haven't Helped Employment

President Obama's $787 billion stimulus plan was intended to help the economy through tax cuts and job creation. One particular area of job creation was construction jobs to repair roads and bridges. But a new report from The Associated Press shows that spending in those areas has had no effect on local unemployment. AP investigative reporter Matt Apuzzo talks to Melissa Block about the report.

MELISSA BLOCK, host:

It was almost a year ago that President Obama signed the economic stimulus plan into law. The $787 billion American Recovery and Reinvestment Act was supposed to jumpstart the economy through tax cuts and job creation. Here is the president at the bill signing ceremony last February in Denver.

(Soundbite of applause)

President BARACK OBAMA: Because of this investment, nearly 400,000 men and women will go to work rebuilding our crumbling roads and bridges, repairing our faulty dams and levees.

BLOCK: But according to an analysis conducted by the Associated Press, those new jobs have not affected local unemployment. AP reporter Matt Apuzzo conducted the analysis and he joins me here in the studio. And Matt, your findings show those jobs not as promised.

Mr. MATT APUZZO (Reporter, Associated Press): What we found was, there is no real correlation between the amount of money you spend on transportation and whether unemployment goes down, or even whether unemployment goes down in the construction industry. And that was what was most surprising because you would expect if you spent a lot of money to rebuild our nation's crumbling roads and bridges that construction workers would benefit. But what we found is that the construction industry is such a small subset of the overall economy, and the transportation construction industry is such a small niche within that subset, that you can pour all of this money in and it does put people to work. It does hire people, but not enough to make any sort of move on the needle, one way or the other, as far as overall unemployment goes.

And that's significant because the president has actually singled out construction money as a real big part of the second stimulus, the one that the House has passed and the Senate is considering.

BLOCK: So, if I understand this right the Recovery Act, the stimulus plan, is creating jobs, people are building roads and bridges, but those are offset by other job losses, so the net effect is negligible.

Mr. APUZZO: Well, it's not just that it's offset. It's that, you know, people are working, and there's a difference between employing people and creating new jobs. And what we found is that the stimulus is employing a lot of people, but it's not making any sort of dent in the unemployment rate or even in construction employment. Part of that is just because, you know, things like residential construction and commercial construction, those are the big chunks of the construction industry. The solution of putting money into roads and bridges is very politically popular in both parties, frankly. And it's easy to do and the Department of Transportation is really good at getting the money out the door. But it's not necessarily the best way to get bang for your buck in terms of moving the needle on unemployment.

BLOCK: The argument is, though, that building infrastructure also has a ripple effect, it create other jobs down through the economy.

Mr. APUZZO: Absolutely. And - I mean, that is a fantastic public policy argument. It's not necessarily the best stimulus argument. I mean, if the idea is we need a second stimulus to help improve unemployment in the short term, you know, roads and bridges might not be the best way to do that. But there's absolutely a great public policy argument that we need roads and bridges and if the government is going to be in the business of making sure we have good ones that we need to spend more money on them.

BLOCK: What has the White House said about your findings as you conducted this analysis of transportation jobs?

Mr. APUZZO: Well, in advance of this story, we did speak with the White House and the White House economists who pretty much said, people are working, people have jobs and it's good policy to put people to work repairing the roads. After the story moved, Secretary of Transportation Ray LaHood made the argument that it has really helped a very small sector of workers in the transportation construction industry. And that that's where we should be measuring our effect, not in the overall unemployment.

BLOCK: And what do you think of that argument?

Mr. APUZZO: I mean, it's not really what we tested. What we tested was the question of has the stimulus helped unemployment generally, because I think that's the way it was pitched when it was passed. You know, if they want to argue that it has helped unemployment in a very small sector, I think the data backs that up. I think the data does show that if you spend a lot of money on transportation, you will improve the situation for a small niche of construction workers who focus on transportation.

BLOCK: Matt Apuzzo is investigative reporter with the Associated Press. Matt, thanks a lot.

Mr. APUZZO: Thank you for having me.

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