Infrastructure spending and intellectual infrastructure

by Michael Sean Winters

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This essay at Politico raises some disturbing questions, unintentionally. Danny Vinik, who graduated in 2013 from Duke with majors in economics and public policy, examines what he considers a problem with the infrastructure proposals from both Hillary Clinton and Donald Trump. What Vinik actually demonstrates is the limiting blinders of macroeconomic analysis and a certain intellectual tic among some of America’s journalists and editors that leaves me scratching my head.

Vinik argues that the main problem common to the infrastructure proposals from both Hillary Clinton and Donald Trump is that the labor market in the construction industry is already tight. Unemployment in the construction industry, he notes, is lower than it was when a White House report that Clinton cites demonstrated the benefits of such infrastructure investments. He writes:

Unemployment is low and wages have even started rising. Instead of creating thousands of jobs, experts now warn that a new infrastructure investment could face the exact opposite challenge: a labor shortage.

Imagine that? Wages have even started rising? Which, he explains, means that the projects will cost more than they would have five years ago, when Republicans in Congress blocked an infrastructure investment plan similar to the one Clinton has proposed.

Vinik turns to an expert to bolster his concern:

“Clearly, there aren’t as many players on the bench as there were,” said Ken Simonson, the chief economist for the Associated General Contractors of America. “To the extent that more were needed, the industry would be turning to people with less experience or perhaps having to raise compensation.”

First of all, there are still too many people "on the bench" as he calls it, people who do not have the work for which they are trained. But, even if this were not the case, Simonson raises as a problem that should actually be an objective. "That is precisely the idea. We want to see rising wages in a large sector of the labor market and we want to turn to people with less experience," says Damon Silvers, Director of Policy and Special Counsel at the AFL-CIO.

Vinik amplifies the point made by Simonson, writing, "Most important, with the labor market for construction workers tight, a large infrastructure program is unlikely to create many new jobs." I couldn’t follow the logic here so I asked Silvers. He couldn’t find the logic either. "This is completely backwards," Silvers says. "If the labor market is tight at current levels of skill, a big investment in both projects and training will lead to unemployed and underemployed people in other sectors moving toward construction and getting both skills and jobs."

Vinik goes on to fret about the potential difficulties of a possible labor shortage:

If such a shortage does occur, Congress could fill the gap by increasing immigration for those willing to work in construction or put more money into workforce development and job training programs.

“Construction workers have dropped out. You don’t have necessarily have the same number,” said Michael Likosky, the head of infrastructure practice at 32Advisors. “If there is going to be substantial infrastructure investment, there has to be job training and moving more people into the construction sector.”

Job training? The horrors!

The core problem with the article is that it sees infrastructure spending only as an exercise in macroeconomic balancing. The reason to spend money on infrastructure is because our infrastructure is crumbling and unless we get it into shape, it serves as a hidden cost across the entire economy as business after business is forced to compensate for the decay. Vinik's approach here is akin to those who say raising the minimum wage will force restaurants to hire fewer workers when, in fact, a restaurant hires an extra waiter when the customer sitting at Table 32 has been waiting too long to place their order, no matter what that waiter is going to be paid.

I do not have it in for this young journalist. I was delighted to see that he was one of the journalists who originally predicted the "Fight for $15" campaign would not be successful and, when it was, admitted he was wrong and publicly looked at the reasons for his mistake. So, I am forced to ask when I read a piece like this one on infrastructure at Politico: Where is the editor?

Regrettably, instead of being absent, the editor might have been present, only asking the wrong question. I do not often write for publications other than NCR, but a few years back I was asked to do an article about the Catholic church for the New Republic, where Vinik also worked. I explained to the editor what the key issues were and how I thought we could address them. He said, "No, we need something counterintuitive." I explained that in the Catholic church, we value this thing called tradition and trying to squeeze the importance parts of the story into a counterintuitive framing would likely distort more than it would reveal. We never came to an agreement and I did not write the piece.

My fear is that too many editors today look at news articles the way Vinik looked at the issue of infrastructure spending: through the wrong lens. They are more interested in the counterintuitive argument, in this case, that Trump's and Clinton's plans share something important, whether or not that is the most important thing to know about a topic, in this case, that Clinton has a plan to pay for her infrastructure spending and Trump doesn't. I fear that editors will come to look at the end product of journalism as clicks, not journalism. I understand the economic pressures. I grasp that there are technological changes affecting journalism, even while I do not understand the technology. But, at the end of the day, journalism rises or falls on its ability to report, analyze and comment upon the news, no more nor less. There is an intellectual infrastructure for journalism, and it is distorted by this tic about being counterintuitive as well as by an expertise that sees only one side, and sometimes the wrong side, of a particular issue.

[Michael Sean Winters is NCR Washington columnist and a visiting fellow at Catholic University's Institute for Policy Research and Catholic Studies.]

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