Job Loss and Infrastructure Job Creation During the Recession

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After the long economic expansion that characterized much of the current decade, the nation
entered its eleventh postwar recession in December 2007. The unemployment rate rose from
5.0% in that month to 6.7% in November 2008, the latest data released to date by the U.S. Bureau
of Labor Statistics (BLS). A majority of those unemployed in November—some 6 out of 10
million people—had been laid off by their employers. In November 2008 alone, employment at
nonfarm businesses fell by 533,000, marking the biggest one-month drop recorded by the BLS
Current Employment Statistics program since December 1974.
The announcement by the Business Cycle Dating Committee in November 2008 that a recession
had begun, which preceded by one week the monthly BLS Employment Situation release
containing employment and unemployment data for November, intensified congressional interest
in passage of legislation aimed at encouraging creation of new jobs and warding off the further ^th
loss of jobs. In the 110 Congress, the Senate did not act on legislation (H.R. 7110) the House
passed in September 2008, which contained among other things spending on infrastructure
(public works) projects to promote employment in the troubled construction industry and in
industries that supply it with goods and services (e.g., concrete and steel manufacturing). To
mitigate all but one recession since the 1960s, Congress has chosen to increase federal
expenditures on infrastructure. This means of job creation has not been without its critics,
however, chiefly because of how long it typically takes for public works projects to start up. (See
CRS Report 92-939, Countercyclical Job Creation Programs, by Linda Levine, for more
information.) This would seem to be less of an issue if the recession is a long one and if Congress
passes the legislation while the recession is still taking place.
Members of Congress have spoken of having ready for the president’s signature shortly after his
inauguration a second economic stimulus bill that would include provisions to create and
maintain jobs in the construction industry and in other infrastructure-dependent industries. A
more expansive definition of public works than was used in the past is under consideration; one
which includes so-called green jobs. Although no consensus definition currently exists, they
appear to include jobs in the renewable energy industries (e.g., wind, solar), jobs retrofitting
buildings to be more energy efficient, and jobs expanding mass transit systems.
The report first examines trends in employment and job loss since the start of the latest recession.
It next focuses on job creation estimates associated with increased spending on infrastructure,
placing a heavy emphasis on explaining the limitations and caveats associated with the input-
output methodology that often is utilized to develop the estimates. The report will be updated ^th
after the 111 Congress convenes to reflect legislation that includes “direct job creation”
provisions, i.e., economic stimulus bills having the government raise demand for goods and
services through increased federal spending for the purpose of creating and preserving jobs. It
will not discuss stimulus measures that give consumers more money in the hope they will spend
rather than save it and that provide income support such as extension of unemployment benefits.
(Information on these forms of fiscal stimulus can be found in CRS Report RL34349, Economic
Slowdown: Issues and Policies, by Jane G. Gravelle et al.)

Employment and Unemployment Through Job Loss......................................................................2
Infrastructure Spending and Job Creation Estimates.......................................................................4
Job Creation Estimates: What Are They?..................................................................................5
Some Caveats......................................................................................................................6
The Multiplier Effect..........................................................................................................6
Job Estimates and Construction Spending................................................................................7
The Federal Highway Administration.................................................................................7
BLS Employment Requirements Table...............................................................................8
Job Estimates and Green Infrastructure Spending....................................................................9
Table 1. Payroll Jobs at Nonfarm Employers..................................................................................2
Table 2. Number of Payroll Jobs by Industry..................................................................................3
Author Contact Information...........................................................................................................11

After the long economic expansion that characterized much of the current decade, the nation
entered its eleventh postwar recession in December 2007. The unemployment rate, which is a
lagging economic indicator, did not start to rise until May 2008 when it jumped 0.5 percentage
points to 5.5%. Since then it has risen another 1.2 percentage points, reaching 6.7% in November
2008, according to the latest data to date from the U.S. Bureau of Labor Statistics (BLS). In
November 2008 alone, employment at nonfarm businesses fell by 533,000 – the biggest one-
month drop recorded by the BLS Current Employment Statistics program (CES) since December

1974.

The Business Cycle Dating Committee of the National Bureau of Economic Research, the official
arbiter of peaks and troughs in the business cycle, announced at the end of November 2008 that a
substantial and widespread decline in economic activity had begun a year earlier. December 2007
marks both the end of the 73-month economic expansion that began in March 2001, and the
beginning of the latest recession. As part of its announcement, the committee noted that it “views
the payroll employment measure, which is based on a large survey of employers, as the most
reliable comprehensive estimate of employment. This series [the CES] reached a peak in
December 2007 and has declined every month since then.” Employment is one of several
measures of economic activity that the committee examines to reach its determinations.
The committee’s announcement, which preceded by one week the monthly BLS Employment ¹
Situation release containing employment and unemployment data for November, has intensified
congressional interest in passage of legislation aimed at encouraging creation of new jobs and ^th
warding off the further loss of jobs. In the 110 Congress, the Senate did not act on legislation
(H.R. 7110) the House passed in September 2008, which contained among other things spending
on infrastructure (public works) projects to promote employment in the troubled construction
industry and in industries that supply it with goods and services (e.g., concrete and steel
manufacturing). To mitigate all but one recession since the 1960s, Congress has chosen to
increase federal expenditures on public works. This means of job creation has been subject to
criticism, however, chiefly because of the length of time it typically takes public works projects to
start up. (For more information see CRS Report 92-939, Countercyclical Job Creation Programs,
by Linda Levine.) This would seem to be less of an issue if the recession is a long one and if
Congress passes the legislation while the recession is still in progress.
Members of Congress have spoken of having ready for the president’s signature shortly after his
inauguration a second economic stimulus bill that would include provisions to create and
maintain jobs in the construction industry and in other infrastructure-dependent industries. A
more expansive definition of public works than was used in the past is under consideration; one
which includes so-called green jobs. Although no consensus definition currently exists, they
appear to include jobs in renewable energy industries (e.g., wind, solar and geothermal), jobs
retrofitting buildings to be more energy efficient, and jobs expanding mass transit systems.
The report first examines trends in employment and job loss since the latest recession began. It
next focuses on job creation estimates associated with increased spending on infrastructure,
placing a heavy emphasis on explaining the limitations and caveats associated with the input-
output methodology that often is utilized to develop the estimates. Upon their anticipated ^th
introduction during the 111 Congress, the report will close with presentation of legislation that
¹
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^http:^//sta^ts.bls.g^ov^/ⁿ^e^w^s.^r^e^lea^s^e^/^em^ps^it.nr^0.htm^.

includes “direct job creation” provisions, i.e., bills having the government raise demand for goods
and services through increased federal spending for the purpose of creating and preserving jobs. It
will not discuss stimulus measures that give consumers more money in the hope they will spend
rather than save it and that provide income support such as extension of unemployment benefits.
(Information on these forms of fiscal stimulus can be found in CRS Report RL34349, Economic
Slowdown: Issues and Policies, by Jane G. Gravelle et al.)

As shown in Table 1, employment on nonfarm payrolls has steadily declined since December
2007. The number of job cutbacks intensified in the last few months of 2008. Two-thirds of the
more than 1.9 million jobs lost since the recession’s start occurred between September and
November 2008.
Table 1. Payroll Jobs at Nonfarm Employers
^seasonall^y^{adjusted e}^m^ployme^{nt in thousands}
^{Year by Month}^{Total Employment}^{Private S}^{ector Employment}
²⁰⁰⁷
^{December 138,}⁰⁷⁸^115,⁷⁴⁵
²⁰⁰⁸
^Janua^{ry 138,}⁰⁰²^115,⁶⁶⁶
^Februar^{y 137,}⁹¹⁹^115,⁵⁵⁷
^{March 137,}⁸³¹^115,⁴⁵⁴
^{April 137,}⁷⁶⁴^115,³⁶³
^{May 137,}⁷¹⁷^115,²⁶⁴
^{June 137,}⁶¹⁷^115,¹⁵⁴
^{July 137,}⁵⁵⁰^115,⁰⁴⁸
^{August 137,}⁴²³^114,⁹⁰⁹
^{September 137,}⁰²⁰^114,⁵²⁵
^{October 136,}⁷⁰^0(p)^114,¹⁶^3(p)
^{November 136,}¹⁶^7(p)^113,⁶²^3(p)
^S^ource:^{U.S. Bureau of La}^{bor Statistics, data from the Curr}^ent^E^{mployment Statistics program.}
^Notes:^{(p) = preliminary.}
As is typical during economic downturns, employees in the goods-producing sector have been the
most adversely affected. They saw their ranks shrink by almost 1.1 million between December
2007 and November 2008. (See Table 2.) Workers in the sector’s construction industry began
experiencing job losses before the economy-wide downturn began. Nonetheless, between the
recession’s onset and November 2008, construction firms cut 513,000 jobs. Across all
manufacturing industries, employment fell by 604,000 over the 11-month period. Although
manufacturing job losses have been widespread, two industries that produce durable goods–
fabricated metal products (e.g., hardware, wire, and screws) and transportation equipment (e.g.,
motor vehicles and parts) – and one that produces nondurable goods – plastics and rubber

products—have been particularly hard hit. Between December 2007 and November 2008,
employment contracted by 144,600 jobs in transportation equipment; 67,000 jobs in fabricated ²
metal products; and 44,000 jobs in plastics and rubber products.
Table 2. Number of Payroll Jobs by Industry
^seasonall^y^{adjusted e}^m^ployme^{nt in thousands}
^{Industry by Sector}^{Employment, December 200}⁷^{Employment, November 200}^8(p)
^{Goods-producing sector}^21,9⁷⁶^20,9²⁰
^{Natural reso}^{urces a}^{nd mining}⁷³⁹⁸⁰⁰
^{Construction 7,46}⁵^6,95²
^Manu^factu^{ring 13,7}⁷²^13,1⁶⁸
^{Service-providing sector}^116,¹⁰²^115,²⁴⁷
^{Trade, transportation and}^26,6^{58 25,9}⁹⁷
^utilities
^{Wholesale trade}^6,07³^5,95⁰
^{Retail trade}^15,4⁸⁸^15,0⁴⁶
^{Transportation and}^4,53^{9 4,41}⁷
^warehousing
^Utilit^{ies 557}⁵⁶⁴
^{Information 3,01}⁸^2,95³
^{Financial activities}^8,25²^8,11⁰
^{Professional and busines}^s^18,1^{31 17,5}⁹⁰
^services
^{Education and}^{health ser}^vices^18,5⁶⁸^19,0⁷³
^{Leisure a}^{nd hospitality}^13,6³⁵^13,4⁸⁶
^{Other s}^ervices^5,50⁷^5,51⁴
^Governme^{nt 22,3}³³^22,5⁴⁴
^Source:^{U.S. Bureau of La}^{bor Statistics, data from the Curr}^ent^E^{mployment Statistics program.}
^Notes:^{(p)=preliminary.}
Employment in the service-providing sector overall did not begin to contract until May 2008,
when losses started outweighing growth in government, education and health services, other
services, and utilities. As shown in Table 2, these four industries reported higher employment in
November 2008 than at the outset of the recession. In contrast, the financial activities industry
began to lose jobs before the advent of the economy-wide downturn. This mirrors the above-
mentioned trend in construction employment in part because real estate is a component of
financial activities and it, like construction, has been hurt by the collapse of the housing market.
Other components of financial activities, such as brokerage firms that packaged high-risk
mortgages and the investors (e.g., banks) that purchased them, have been negatively affected by
the housing market downturn as well.
²
^Da^ta^a^v^a^ila^ble^a^t^http://sta^ts.^b^ls.g^ov^/c^e^s^.

Prospects for job growth resuming in the near-term look dim. Based on information gathered
from such sources as newspapers, trade publications, and Securities and Exchange Commission
filings, the outplacement firm of Challenger, Gray & Christmas reported that during 2008
companies have announced their intention to lay off increasingly large numbers of workers. Firms ³
announced job cuts totaling more than one million between January and November 2008. In
November, financial companies announced the largest number of jobs to be eliminated, 91,356,
driven principally by Citigroup’s stated intention to shed about 50,000 jobs worldwide. In
addition, the Blue Chip Economic Indicators reported the consensus forecast among the nation’s ⁴
leading business economists that firms will not expand employment until 2010. The 50-plus
economists, who are employed by major manufacturers, banks, insurance companies, and
brokerage firms, also forecast that the unemployment rate will continue to rise through 2009, with
some expecting the rate will peak in the second half of the year and others, in the first half of

2010.

To date, the unemployment rate has risen to 6.7% from 5.0% in December 2007, according to ⁵
BLS data derived from the Current Population Survey. Workers who lost jobs have been an
increasing presence among the unemployed, a group that also includes new entrants, reentrants,
and job leavers. Job losers accounted for more than four of every five workers added to the ranks
of the unemployed between December and November 2008. The 6.1 million laid off workers
represented 58% of all unemployed workers, 10.3 million, in November 2008.

When in response to a recession Congress has acted to create jobs by raising demand for goods
and services through increased federal spending it often has chosen to direct the funds to
infrastructure (public works) activities. Other means of direct countercyclical job creation—
employment tax credits, state revenue-sharing, and public service employment—have been relied
on much less often. (See CRS Report 92-939, Countercyclical Job Creation Programs, by Linda
Levine.)
A more expansive definition of infrastructure than was used in the past is now under
consideration. Historically, public works has been synonymous with heavy and civil construction
activities (e.g., road and bridge building). Today, it appears to include so-called green jobs.
Although numerous studies on the emerging green economy have been released in the last several
years, no consistent definition of green jobs exists at present. Green jobs seemingly are those in
and related to industries that utilize renewable resources to produce their outputs (e.g., energy
generated by wind and solar technologies) and jobs in and related to industries that produce ⁶
energy-efficient goods and services (e.g., Energy Star appliances and equipment, mass transit).
For this reason, the following discussion focuses on what is known about the job-generating
impact of infrastructure spending broadly defined.
³
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The section below begins with an in-depth examination of how job creation estimates usually are
developed. The focus then narrows to look at two models that can be used to calculate the number
of jobs dependent upon demand in the construction industry, which includes road and bridge
building. The section ends by briefly reviewing the difficulties that researchers encounter in
estimating the number of jobs supported by expenditures on green infrastructure and the
consequent caution that should be taken when utilizing these public works job estimates in
particular.
Interest in how many jobs are created by a particular type of economic activity has surfaced when
the economy is in a downturn and policymakers seek to compare the relative advantages of
different stimulus options. It also has arisen when policymakers want to know the impact of
shifting expenditures from one federal budget category to another (e.g., away from defense and
towards social services programs). Unless there is an increase in total spending, however, the ⁷
number of jobs in the labor market would remain largely unchanged.
Although there are other bases upon which to develop estimates of the number of jobs created by
a given economic activity, an input-output (I-O) model of the economy often is utilized due to its ⁸
cost-effectiveness. An I-O model describes the interrelationships between industries in the
production process, showing how the dollar value of a sale is distributed across industries at a
particular point in time. It thus reflects how much of the purchased product comes from final and
supplier industries. An I-O table might show, for example, the dollar value of roof trusses
produced by the veneer, plywood, and engineered wood products manufacturing industry and the
dollar value of bricks produced by the clay product and refractory manufacturing industry used by
the construction industry.
The output requirements from each industry must then be converted to employment requirements.
Employment requirements are derived from productivity estimates for each industry at a
particular point in time. The total employment requirement associated with a given type of final
demand (e.g., a water reuse program) is the employment in the industry producing the final
product or service and in the supplier industries. In other words, it is an approximation of both the
direct and indirect employment dependent upon/supported by the economic activity. It commonly
is expressed as the number of jobs per billion dollars of expenditures valued in a particular year’s
dollars.
Like an I-O table, an employment requirements table is a matrix of hundreds of columns and
rows. Each column displays the number of jobs supported in each of the industry rows by an
expenditure of one billion dollars in the column industry. For example, one billion dollars spent in
the construction industry supports (direct) employment in the various components of that industry
(e.g., residential and commercial building, highway and bridge building) and (indirect)
employment in many other industries that supply their goods and services to the construction
industry (e.g., asphalt shingle manufacturing, fabricated metal bridge section manufacturing). An
⁷
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^acces^sib^ility^o^f^th^{e d}^a^{ta so}^u^r^{ces r}^e^q^uⁱ^red^to^d^e^v^e^lo^p^t^h^{e I-O m}^o^d^e^l.

employment requirements table thus permits estimation of the varying impact of an expenditure
on different industries and the varying impact of different kinds of expenditures.
I-O models freeze technology and productivity at a particular point in time. Thus, the job-
generating potential of an economic activity undertaken today could differ from that of an earlier
period if there were technological and productivity improvements in the intervening years.
Similarly, the estimates often are stated in terms of the number of jobs created for every billion
dollars of expenditures, but a billion dollars spent in one year could buy less (more) than a billion
dollars spent in another year depending on changes in price levels over time.
There also could be differences in estimated versus actual job creation because I-O models
assume that resources are unlimited. If, for example, the economy was performing at a fairly high
level with plants operating near full capacity and with fairly few workers unemployed, the actual
number of new jobs might fall short of the estimate due to capital and labor constraints. This is
less likely to matter during a broad-based economic downturn.
Further, I-O tables do not necessarily differentiate between imported and domestically produced
goods. As a consequence, the domestic employment impact of expenditures might be overstated
to the extent that inputs are imported. Similarly, I-O tables typically do not express employment
in terms of full-time equivalents (i.e., both full-time and part-time jobs are counted equally).
Thus, programs which draw upon industries that rely relatively more on part-time workers (e.g.,
retail trade) might appear to create more jobs than programs that draw to a greater extent on
industries employing relatively more full-time workers (e.g., manufacturing).
A complete estimate of the number of jobs created by a particular type of economic activity has
three components, namely,
• the number of jobs directly attributable to the activity,
• the number of jobs indirectly attributable to the activity, and
• the number of jobs induced throughout the economy as a result of the activity.
Induced jobs are those dependent upon the purchases of persons in direct and indirect jobs. For
example, workers who are directly or indirectly employed as the result of a highway construction
program might spend some portion of their wages in their communities at grocery stores, auto
repair shops, and movie theaters.
Estimates of induced jobs or the multiplier are considered tenuous. To calculate the multiplier
effect, one must estimate how much of the additional money earned by directly and indirectly
employed workers will likely be spent versus saved. The actual number of jobs created by this
added spending will further depend on economic conditions (e.g., the availability of labor, the
inflation rate). As a result, there are widely varying estimates of the multiplier effect and those job
creation studies that include induced employment utilize different multipliers.

Perhaps the most widely known estimate of the employment impact of federal spending on our
nation’s roads comes from the Federal Highway Administration (FHWA). Although the FHWA
twice updated its 1997 analysis, which estimated that $1 billion of federal-aid highway
expenditures plus a $250 million state match supported 47,575 jobs, some proponents of
stimulating job growth through increased federal spending on infrastructure continue to use this
figure. The most recent update by the FHWA to 2007 indicates that a $1.25 billion dollar
expenditure on highway construction consisting of $1 billion from the federal government and
$250 million from state government could support 34,779 jobs. If a state match is not required, ⁹
“then $1 billion in Federal funds supports 27,800 jobs.” The jobs number has decreased over
time in part because of increases in the price of inputs, such as asphalt and diesel fuel.
The FHWA breaks down the estimate of 27,822 jobs per billion dollars of federal spending on
highways as follows:
• 9,536 construction-oriented jobs (i.e., jobs at construction companies working on
the projects and at businesses that provide direct inputs to the projects such as
asphalt, concrete, and guard rails);
• 4,324 jobs in supporting industries (i.e., employment at firms that provide inputs
to the industries directly providing the materials and equipment utilized in
highway construction such as producers of sheet metal who supply the
manufacturers of guard rails); and
• 13,962 induced jobs (i.e., jobs throughout the economy dependent upon
consumer expenditures from the wages of workers in “construction-oriented” and
“industry-supporting” jobs).
Thus, the multiplier effect accounts for one-half of the total estimate.
The FHWA notes one caveat about I-O analysis in addition to those mentioned above, that is, the
job estimate “utilizes the national average mix of construction materials and labor inputs. Specific ¹⁰
projects and local utilization ratios will alter the estimated number of jobs supported.” For
example, a different combination of materials and number of workers might be required for road
resurfacing projects compared to bridge building or commuter rail projects.
The FHWA also states that
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⁹
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⁽^c^onti^nue^d.^..)

In recognition of the fact that “people want to assess the impact on employment of different
policies or actions,” the U.S. Bureau of Labor Statistics (BLS) makes available electronically
free-of-charge to the public the employment requirements tables it develops as part of its ¹²
employment projections program. I-O and employment requirements tables developed and
utilized by others often are proprietary and not made widely available.
The employment requirements tables are based on the official I-O tables for the nation that the
U.S. Bureau of Economic Analysis (BEA) develops every five years. BLS takes the latest
national I-O table available from BEA – in this case, 1997 – and updates it to reflect more recent
production and distribution technologies. It then utilizes the updated I-O table and recent labor
productivity data to develop an employment requirements table. Because the base year for the
most recently published employment projections is 2006, the latest employment requirements
table reflects 2006 technologies of production and distribution as well as labor productivity.
The BLS employment requirements table provides information for the construction industry as a
whole. The construction industry, according to the North American Industry Classification
System, is composed of three major subdivisions:
• construction of buildings (residential and nonresidential),
• heavy and civil engineering construction (highway, street, and bridge
construction), and
• specialty trade contractors (foundation, structure, and building exterior
contractors; building equipment and finishing contractors).
The BLS employment requirements table shows 11,768 jobs directly and indirectly dependent
upon one billion dollars of spending on construction. A majority of the jobs are in the
construction industry itself (i.e., 6,925 direct jobs).
The figure from the BLS employment requirements table for construction expenditures (11,768)
is somewhat lower than the direct and indirect jobs figure for highway expenditures from the
FHWA (13,860). Potential explanations for the disparity include differences in industry definition,
data sources, method of updating the model, and time period.
Neither the employment requirements available from BLS for the nation nor the employment ¹³
requirements available from the BEA by state, breaks out other types of construction that have
been discussed as part of a federal job creation package (e.g., public school construction). BLS
formerly conducted surveys to estimate full-time year-long employment associated with a variety
of different construction activities, including new schools, hospitals, water and sewer facilities,

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roads, mass transit, and maintenance and repair construction. The survey information was last
updated a few decades ago, however.
Estimating the number of jobs dependent upon green infrastructure activities presents a greater
challenge than estimates related to infrastructure projects as traditionally defined. The basis for
most data collection by U.S. statistical agencies is the North American Industry Classification
System (NAICS). It currently does not identify separately so-called green industries (e.g., those
that utilize renewable resources to produce their outputs, those that manufacture goods which
minimize energy use). Within NAICS, the electric utility industry is disaggregated into
hydroelectric, fossil fuel, nuclear, and other power generation, transmission, and distribution.
Such renewable sources of energy production as wind, solar, and biomass are not uniquely
recognized; they are included in the “other” category. If harnessing the wind to produce
electricity and plant material to produce biofuel requires a substantially different mix of inputs
than relying on coal and gasoline, for example, the conventional I-O model does not seem well-
suited as a basis for estimating the number of jobs supported by these green activities. Similarly,
within NAICS, building construction industry does not have a unique category for retrofitting
(e.g., installing additional insulation, fluorescent lighting, or energy-efficient heating and air-
conditioning systems). Retrofitting likely requires a combination of inputs from supplier
industries that differs from the mix for the top-to-bottom construction of buildings, once again
making use of conventional I-O models problematic.
This recognized difficulty generally is either not mentioned, or how it is dealt with is not
described, in the analyses of green job creation. One study, commissioned by the Center for
American Progress that is discussed in more detail below, does address the problem. The
researchers explain that because “the U.S. government surveys and accounts that are used to
construct the input-output tables do not specifically recognize wind, solar, biomass, building
retrofitting, or new mass transit as industries in their own right,” they created synthetic industries
by combining parts of industries for which data are available. The researchers provided an
example in the case of the biomass “industry:” they constructed it by combining the farming,
forestry, wood products, and refining industries; then they “assigned relative weights to each of ¹⁴
these industries in terms of their contributions to producing biomass products.”
Further complicating the matter is the context and manner in which estimates of green jobs
generally are presented. Studies often develop employment projections based on differing sets of
assumptions and time horizons. For example, the number of direct and indirect jobs some 10 or
more years in the future supported by an assumed increase in the demand for energy that is met
by an assumed shift during the projection period from coal to wind and geothermal power
generation. Some reports also include induced employment, but this is not always made clear. In
addition, some analyses relate to a particular state. Their results may not be generalizeable to
other areas because state economy’s have different mixes of industries and may not be able to
provide any or all of the inputs for a particular green output. The analyses also may express job
estimates per unit of power generated by renewable resources and saved by increased demand for
energy-efficient products and equipment, rather than per dollar of investment in green activities.
¹⁴
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And, the assumptions and methodologies underlying the job creation estimates often are not
clearly articulated, which makes thoughtful review of the results very difficult. For these reasons,
policymakers considering which if any green infrastructure programs to fund to create and
preserve jobs in the near term to mitigate the recession’s impact on U.S. workers may not find
helpful many green economy studies.
It should be noted that many of the studies by green economy proponents were not conceived for
the purpose of quickly stabilizing or increasing the number of jobs in the nation or in industries
particularly hard hit by the current recession. Job creation estimates from two organizations that
have proposed broad-based green economy strategies intended in part to stimulate the
deteriorating labor market are briefly described below.
• The September 2008 report, Green Recovery: A Program to Create Jobs and
Start Building a Low-Carbon Economy, was commissioned by the Center for
American Progress (a research and educational institute). It represents an
acceleration of a 10-year program included in a 2007 report (Capturing the
Energy Opportunity: Creating a Low-Carbon Economy). The 2008 report’s
authors at the Department of Economics and Political Economy Research
Institute (University of Massachusetts – Amherst), who relied on I-O analysis,
estimate that almost 2 million jobs (935,200 direct jobs, 586,000 indirect jobs,
and 496,000 induced jobs) could be created or preserved by a 2-year $100 billion
“green economic recovery program.” The program involves retrofitting buildings
with energy-efficient products and equipment, extending the reach of mass transit
and freight rail networks, constructing “smart” electric-grid transmission
systems, increasing the use of wind and solar resources in power generation, and
developing next-generation biofuels. Of the $100 billion total, $46 billion would
be in the form of federal spending for such activities as public building retrofits,
mass transit and freight rail expansion, and smart electrical grid development.
Much of the remainder would be in the form of tax credits to encourage
businesses and homeowners to retrofit commercial and residential buildings. The
authors acknowledge that not all of the green activities
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^to^b^e^im^p^l^e^m^en^ted^.
• In December 2008, the Apollo Alliance (a coalition of labor, environmental,
business and community leaders) proposed The Apollo Economic Recovery Act.
It is an initial step toward achievement of a 10-year $500 billion program to
create 5 million green-collar jobs, which had been released in September 2008.
The new initiative calls for federal spending of about $50 billion to create or
maintain more than 650,000 direct jobs and 1.3 million indirect jobs. The
derivation of these job creation figures is not always clear, appearing to rely
much of the time on spending-to-jobs relationships estimated by other
organizations (e.g., Surface Transportation Policy Project, FHWA , and
¹⁵
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^http:^//w^w^w^.am^e^rⁱ^ca^npr^og^r^e^s^s^.^or^g^.

Cambridge Systematics). A selection of the proposed allocation of federal funds
and associated job estimates follows.
1. $6 billion retrofitting buildings: 267,600 direct and indirect jobs in the
construction, manufacturing, and other industries
2. $10 billion to improve the efficiency and reliability of the electric transmission
grid: 131,000 direct and indirect jobs
3. $6 billion on ready-to-go public transit projects: “would create or retain more
than 246,000 jobs, including 59,000 direct jobs and more than 162,000 indirect ¹⁶
jobs
4. $8 billion to repair roads and bridges: 278,000 direct and indirect jobs

5. $8 billion to encourage localities to replace aging buses and trains with U.S.-

made clean-energy vehicles: 37,600 direct jobs in vehicle manufacturing and
167,000 indirect jobs
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¹⁶
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