After the long economic expansion that characterized much of the current decade, the nation entered its 11 th postwar recession in December 2007. The committee's announcement intensified congressional interest in passage of legislation aimed at encouraging creation of new jobs and warding off further loss of jobs. So, too, did comments equating the recession to the Great Depression. To mitigate all but one recession since the 1960s, Congress chose to increase federal expenditures on infrastructure (public works), thereby directly raising demand for goods and services to offset the reduced demand of consumers. After first briefly examining trends in employment since the latest recession began, this report focuses on job creation estimates available in late 2008 associated with increased spending on traditional and so-called green infrastructure, placing a heavy emphasis on explaining the methodology often used to derive them and the difficulties associated with developing estimates for green economic activities in particular. Once stimulus legislation is signed into law, the focus of Congress customarily turns to estimates of the number of jobs that result as federal funds are allocated to specific activities. In the case of the American Recovery and Reinvestment Act (ARRA, P.L. 111-5 ), which was enacted in early 2009, Congress included language requiring entities that receive ARRA appropriations from federal agencies to report the number of jobs created or maintained as a result and requiring the Council of Economic Advisers to report on the employment and other economic effects of ARRA provisions. The report closes with a review of what is known to date about the number of jobs associated with the stimulus act. Historically, public works has been synonymous with heavy and civil construction activities (e.g., road and bridge building, flood control structures and dam building). Green jobs seemingly are those in and related to industries that utilize renewable resources to produce their outputs (e.g., energy generated by wind, solar, and geothermal technologies) and jobs in and related to industries that produce energy-efficient goods (e.g., Energy Star appliances) and services (e.g., mass transit). 111-5 requires entities that receive ARRA appropriations from federal agencies (e.g., grant, loan, or contract recipients; states) to include in their quarterly reports to the agencies estimates of the number of direct jobs created and retained by infrastructure projects, for example. Based on this definition, recipients reported that 608,311 jobs were funded by ARRA in the fourth quarter of 2009. The CEA's estimate of 1.0-1.1 million additional jobs as of August 2009, discussed in the preceding paragraph, falls within the range estimated by CBO. It estimated that the law might have raised employment by 2.2–2.8 million jobs above what it otherwise would have been as of the first quarter of 2010. Public investment outlays might have increased total employment by over 627,000 jobs in the first quarter of 2010, and by over 800,000 jobs in the second quarter of the year.
After the long economic expansion that characterized much of the current decade, the nation entered its 11th postwar recession in December 2007. The size of job losses and the comparison to the Great Depression intensified congressional interest in passing legislation early in 2009 aimed at encouraging job creation and warding off further cuts in employment.
To mitigate all but one recession since the 1960s, Congress chose to increase federal spending on public works (i.e., infrastructure). Public works expenditures traditionally have gone to certain types of construction activities (e.g., building highways and bridges, dams and flood control structures), which indirectly increase demand in industries that supply their products to construction firms (e.g., sand and gravel mines, heavy equipment manufacturers). Today, the definition of infrastructure has been expanded to include green economic activities (commonly referred to as green jobs), which include 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. Once stimulus legislation is signed into law, the focus of Congress customarily turns to estimates of the number of jobs that result as federal funds are allocated to specific activities. Therefore, after briefly examining the trend in employment since the recession's onset, the report turns to an in-depth look at estimates of job creation, 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 closes with a review of what is known to date about the number of jobs supported by infrastructure spending and other provisions in the American Recovery and Reinvestment Act (ARRA, P.L. 111-5). Section 1512 requires entities that receive ARRA appropriations from federal agencies, totaling approximately $271 billion, to include in quarterly reports to the agencies the number of direct jobs created or maintained as a result. Section 1513 requires the Council of Economic Advisers (CEA) to report quarterly on the effect of ARRA provisions on employment and other economic indicators. The CEA's reports are the most comprehensive because they contain estimates of not only jobs supported by ARRA appropriations but also of jobs associated with other parts of the act (e.g., unemployment and health insurance benefits, state fiscal relief, and tax provisions). The CEA has estimated that ARRA might have increased aggregate employment above what it otherwise would have been by 1.0-1.1 million jobs in the third quarter of 2009, 1.7-1.9 million jobs in the fourth quarter of 2009, 2.2-2.8 million jobs in the first quarter of 2010, and 2.5-3.6 million jobs in the second quarter of 2010.