One final location-based factor influencing productivity is transportation infrastructure. It is, to borrow a phrase, the last mile that must be considered when measuring a company’s impact on the communities they do business in.
My childhood home was located just two blocks from two major Chicagoland highways, the Eisenhower Expressway (or, as it’s known locally, The Ike) that would take you into the city and the Tri-State Tollway that could take you up to Wisconsin or over to Indiana as well as to Missouri or elsewhere via an exit ramp or three. A bit to the north of the house was Metra’s Chicago Northwestern train line that also took commuters and tourists downtown while to the south was a freight/Amtrak line. 16 miles north via the Tri-State is O’Hare International Airport. The street I grew up on ran parallel to a nature path that used to be an electric rail system.
It was, in many ways, a microcosm of Chicagoland’s public transportation present and past. Not every regional area is so lucky to have so many options.
Most, if not all of those systems were built and continue to be maintained by state and local government entities, with the money coming in through various taxes and fees, many of which are paid by private citizens.
You can make the argument that those private citizens benefit from the roads and rail lines because they offer access to shopping as well as to the jobs they need to do that shopping. But considering how little of the operational profits companies report makes its way to the average worker a strong case could be made that it’s those corporations that derive the most value from that transportation infrastructure.
The same corporate impetus to avoid paying taxes to local government that results in decreased funding for public schools means there’s less money available to pay for new and improved transportation infrastructure, yet the benefits to those corporations are just as clear. As stated by the Brookings Institute,
Concrete, steel and fiber-optic cable are the essential building blocks of the economy. Infrastructure enables trade, powers businesses, connects workers to their jobs, creates opportunities for struggling communities and protects the nation from an increasingly unpredictable natural environment. From private investment in telecommunication systems, broadband networks, freight railroads, energy projects and pipelines, to publicly spending on transportation, water, buildings and parks, infrastructure is the backbone of a healthy economy.
Much as private charter schools are frequently held up as the sensible alternative to failing public education systems, so too infrastructure projects that result from public/private partnerships are often seen to be a solution for crumbling public infrastructure. Indeed a proposal put forward by the Trump Administration during one of its many “Infrastructure Weeks” in 2017 and 2018 offered just that, dangling $200 billion in various federal grants in the hope private companies would pick up the slack. As of 2017 that gap amounted to $5 trillion.
In commentary on those Trump Administration proposals, WBUR’s Frederick Hewitt pointed out the problem with this public/private mindset, stating “The projects most deserving of federal funds are those that favor the least well-off communities, beyond the initial economic stimulus that construction jobs spur. At the front of the queue should be the regions where the economy is stubbornly sluggish and the public infrastructure most decrepit.”
As Hewitt states, though, the projects most likely to result are those that offer their funders the greatest return on investment, meaning they’re going to be focused on already well-off areas that will slightly improve existing systems as opposed to lifting anyone out of poverty or drastically changing someone’s access to work and other opportunities.
The costs of failing to address the very real problems faced by deteriorating infrastructure are not those that can be realized in the next fiscal quarter, but they are no less real. As with efforts to reduce climate change, they are visualized as projected losses to businesses in the long term.
According to the 2016 Infrastructure Report Card, those losses amount to $4 trillion in GDP and come at the expense of 2.5 million jobs, both by 2025. New jobs created will be lower paying and be more difficult to both access and execute explicitly because infrastructure will be so poor.
As a consequence, U.S. businesses will be more inefficient. As costs rise, business productivity falls, causing GDP to drop, cutting employment, and ultimately reducing personal income.
All of that because commutes will be longer and/or slower, goods and services will be more expensive because it will cost more to transport or access them and more.
Public policy regarding infrastructure spending, as is the case with many issues, mired in large part because of the demographics of those using it. Roads get the priority because vehicle ownership is most common among whites. Mass transit options, which are only used by roughly 10 percent of the population as a whole, are more commonly utilized by blacks, Hispanics and immigrants.
Also hindering substantive discussions about publicly-managed infrastructure is that those systems are often subject to the authority of any number of agencies, local government bodies and other overseers. A state governor may have big plans, but they may not survive the sometimes competing interests of the mayors of the towns a train line passes through or the county boards that are impacted by a highway that snakes through a region.
So while commuting times are increasing nationwide, it’s unlikely anyone will be able to do much about that other than suggest widening existing highways, something that never works to alleviate congestion.
If companies want to continue attracting the best and brightest they will have to consider how transportation impacts access to those jobs. According to placement firm Robert Half, 28 percent of employees have left a job because of a bad commute, with 60 percent of survey respondents saying their employer hasn’t done enough to address those problems and concerns.
On the other side of the equation, commuting times are becoming a factor in determining who is considered for a job opening, with those from nearby affluent communities much more likely to receive callbacks in response to their application than those from poorer areas farther away from the business.
The drive for employees to be more productive is partly behind that trend. If it’s important for Carol to be home by 6:30 PM on a weeknight, she would have to cut out at 5:00 if her commute is a 90 minute mix of train rides, bus routes and a bit of driving. But if she has a simple 20 minute drive she’s more likely to be pressured to stay until 6:00 and get more done. And Carol’s life may be such that she can’t push back on that because she needs this job and is afraid, if fired, she wouldn’t be able to easily find another one.
Commuting is a massive unreimbursed subsidy workers provide their employers, though. Not only is there the additional time eaten up in someone’s day by a work requirement, but workers are increasingly expected to be working while they’re on the road or on the train, whether it’s taking calls, answering emails, writing presentations or what have you.
The costs of doing so are substantial as well. For those using mass transportation there are ticket prices and other expenses while the drivers clogging the highways pay for gas, car maintenance and more. These workers are paying, both in time and money, while also working for no additional compensation. Some companies offer transportation benefits, but many of those don’t cover the full costs of a train ticket and certainly aren’t going to include car maintenance or repair expenses.
It’s important to remember that infrastructure means more than just roads and bridges. There’s also water, electric and other systems to consider. As public/private programs are proposed and mulled it can be useful to look at areas of infrastructure that are completely privately managed to get a sense of how such ownership is not always in the public good.
As shown earlier, the lack of high speed internet access in rural or impoverished areas is holding some students back as schoolwork is increasingly done online. It also means residents in those areas are unable to access necessary resources on the web, including looking for work or holding jobs that are partly or completely online.
CNET’s Marguerite Reardon put it simply:
The internet that rural Americans can access is slower and more expensive than it is for their urban counterparts. And to add insult to injury, the rural population generally earns less than those in urban areas. Broadband providers simply won’t offer service if they can’t get enough customers to pay for it.
The Interstate Highway System envisioned by Pres. Dwight D. Eisenhower was, for all its problems in execution, meant to democratize access to the world, allowing people to spread out without losing access to resources. It is available to all.
Problems with infrastructure only develop when we lose sight of how, ideally, they should be equalizing factors. It’s why low income neighborhoods aren’t offered high speed internet or why the lead pipes poisoning their water system aren’t fixed before they endanger the entire community’s health. It’s why billionaires can propose new high-speed rail systems meant to cater to wealthy travelers while existing trains that offer transportation to everyone regardless of economic status continue to experience problems.
Some of these issues can be alleviated, at least to some extent, by more companies embracing a model that includes opportunities to work remotely. To date, though, many still embrace the idea of the office as the place where work is primarily, if not exclusively, done. There are productivity advantages and disadvantages in both situations.
