Overselling High-Speed Rail
Tuesday, August 18th, 2009 By Marc KilmerSam Staley, a senior fellow at the Buckeye Institute, has an article in Reason magazine about why the job creation potential of high-speed rail is not as great as some politicians claim:
Ultimately, high-speed rail’s impacts on American travel patterns and employment productivity are going to be negligible, and the actual job creation potential for high speed rail is much more modest than proponents admit.
Take, for example, the Ohio Hub corridor linking Cincinnati, Cleveland, Columbus, and Toledo to regional destinations such as Chicago and Toronto. Ohio is one of the nation’s largest state economies, employing 5.3 million people. As an old-line manufacturing state, Ohio has lost 300,000 jobs just in the past year. Needless to say, Ohioans will be attracted to the optimistic rhetoric of rail’s job creation potential. Moreover, preliminary estimates by independent consultants suggest the Ohio Hub may actually cover its annual operating costs (although supporters are counting on the federal government covering 80 percent of capital costs of the $3.7 billion project).
Yet, even with these federal subsidies the consultant reports suggest that a $2.3 billion investment in building the rail corridor would generate only 54,540 jobs over the projected nine-year construction phase. That works out to 2,635 jobs per year at a cost of $42,170 per job. Further analysis found 16,700 permanent jobs would be created by the system once the system was up and running, assuming optimistically that ridership reaches forecasted levels and fares are set to cover its operating costs. While that might seem like a lot of jobs, the effort will do little to stem the economic tide turning against Ohio and other states facing the headwinds of global competition and a rising services-based economy.
For transportation investments to have a meaningful economic impact, they will need to cost-effectively improve America’s ability to move goods, services, and people from one place to another. High-speed rail doesn’t do that. It is an extremely costly way to achieve limited portions of these goals, and it inevitably fails as a broad-based solution to the country’s transportation challenges.
Tags: passenger rail, transportation
