R40080
Job Loss and Infrastructure Job Creation During the Recession
March 17, 2009
Download Locations
Summary
After the long economic expansion that characterized much of the current decade, the nation entered its eleventh postwar recession in December 2007. The announcement by the Business Cycle Dating Committee that a recession had begun preceded by one week the monthly Employment Situation release for November 2008, in which the U.S. Bureau of Labor Statistics reported the biggest one-month drop in employment in 34 years. This and other news of deteriorating conditions in the labor market at the end of 2008 intensified congressional interest in passage of legislation early in 2009 aimed at encouraging creation of new jobs and warding off further loss of jobs. (For information on the American Recovery and Reinvestment Act, see CRS Report R40104, Economic Stimulus: Issues and Policies.) To mitigate all but one recession since the 1960s, Congress has chosen to increase federal spending on infrastructure. But, there are a number of issues associated with using expenditures on public works to quickly create jobs in times of recession. (See CRS Report R40107, The Role of Public Works Infrastructure in Economic Stimulus). Public works expenditures traditionally have gone chiefly to construction activities (e.g., building highways and bridges, dams and flood control structures) which indirectly increase product demand in industries that supply construction (e.g., manufacturing). Today, the definition of infrastructure has been expanded to include so-called green jobs, which seemingly are those in industries that utilize renewable resources (e.g., electricity generated by wind), produce energy- efficient goods and services (e.g., mass transit), and install energy-conserving products (e.g., retrofitting buildings with thermal-pane windows). A question that typically arises during congressional consideration of economic stimulus legislation is which approach produces the most bang for the buck. In the instant case, this means how many jobs might be supported by federal expenditures on traditional and green infrastructure projects. After briefly examining the extent of job loss since the recession's onset, the report turns to an in-depth look at job creation estimates, including the limitations of the methodology often used to derive them and the difficulties associated with developing job estimates for green infrastructure in particular. The report will be updated periodically to reflect changes in employment conditions during 2009.
