Economic effects of public transportation

Economic effects of public transportation

The public transportation sector services are important to an economy in numerous ways. Investment in the public transportation sector creates and supports employment in the industry and also in other related industries (Economic development Research, 2009, p. 2). This helps to generates wages for workers in the public transportation sector as well in the related industries. Spending money on public transportation helps to generate income for businesses involved in activities and operations such as public transportations, car manufacturing and road construction (Weisbrod & Reno (2009, p. 1). This paper discusses the effects of public transportation services on the economy in terms of employment, wages and business income in the US.

Discussion

Public transportation generates numerous jobs in US. First, jobs are created through the capital investments that take place in the sector or to support the sector (Economic development Research, 2009, p. 2). This includes the purchase of vehicles and equipments, and the development of infrastructure and other supporting facilities. An analysis conducted by Weisbrod & Reno (2009, p. 1) found that per every billion dollars spent in investment activities in the US public transportation, approximately 24,000 jobs are supported annually.

Public transportation operations are also significant sources of employment. These include management operations and maintenance of vehicles and facilities. The analysis conducted by Weisbrod & Reno, (2009, p.1) found that for every billion dollars spent on public transportation operations in the US, around 41,000 jobs are supported in a year. As well, the US public transportation sector helps to create jobs for individuals or in industries involved in providing services such as repairs and car washing. On overage Weisbrod & Reno (2009, p. 1) found out that per every $ billion invested in public transportation sector in US, approximately 36,000 jobs are supported annually.

Investment in public transportation therefore generates wages for employees working in the sector and also to individuals working in related sectors. An increase in investment in the sector results in an increase in public transportation spending leading to employment of persons to fill the new jobs (United States Department of Transportation, 2009, p. 2). This creates an opportunity for unemployed persons to earn income. The analysis conducted by Weisbrod & Reno, (2009, p.1) indicated that $1 billion investment in the public transportation sector in US results into $1.6 billion increase in employees’ wages annually.

As mentioned earlier, spending money in the public transportation sector helps to generate income for firms in the sector and in other sectors. Weisbrod & Reno (2009, p.1) found that 36,000 jobs are created annually in US per each billion dollars invested in the public transportation. According to Weisbrod & Reno (2009, p.1), this corresponds to around $3.6 billion of added business output in terms of sales volume. This leads to approximately $0.2 billion business income.

Conclusion

In conclusion, the economic impacts of public transportation in US include creation of job opportunities, which opens opportunities for individuals to earn and creation of opportunities for businesses to make income. Therefore, investment in the public transportation sector has significant impact on US economy and thus, it is an important public policy consideration.

References

Economic development Research, Job Impacts of Spending on Public Transportation: An

Update, 2009, accessed 27 February 2012 from, http://www.apta.com/gap/policyresearch/Documents/jobs_impact.pdf

United States Department of Transportation, Public and private sector interdependence in freight

transportation markets, (2009), Washington D.C: Transportation Research Board

Weisbrod, G. & Reno, A, economic impact of public transportation investment, 2009, accessed

27 February 2012 from, http://www.scribd.com/doc/72315700/Economic-Impact-of-Public-Transportation-Investment