Is Obama’s new federally-funded infrastructure package the key to strengthening our nation’s families? That’s the argument of W. Bradford Wilcox of the American Enterprise Institute and Robert Lehrman of the Urban Institute in their essay “How to Revive the American Dream in Blue-Collar America.” It’s a misguided policy prescription, the fruit of a commitment to pick two ideas from the Left and two from the Right in a spirit of “bipartisan commitments.” But we can craft good public policy that promotes the common good—including the flourishing of families—without succumbing to bad economic thinking.
Sorry, @RyanT_Anderson, supply-side economics w/ a dollop of moralizing on top hasn’t helped working-class families over last 40 yrs
— W Bradford Wilcox (@WilcoxNMP) February 5, 2015
We thought it odd that Wilcox, at the conservative AEI think-tank, would embrace misguided federal transportation policy—and then place the blame for the economic challenges facing blue-collar workers on supply-side economics! As if the past 40 years have been a free marketer’s dream, without large helpings of cronyism and government regulations.
Here’s what you need to know. Wilcox and Lehrman promote the $478 billion public works package in President Obama’s recent budget request as one such federal commitment that could create jobs and improve infrastructure ranging from roads to railroads. But Keynesian “job creation” programs don’t really work. The government doesn’t create jobs and boost the economy—as the 2009 stimulus bill illustrated so plainly.
First, these calls misunderstand the nature of infrastructure construction work. Infrastructure projects are capital intensive, not labor intensive. Road and bridge construction requires a relatively small number of highly skilled workers using advanced equipment and machinery. Across the U.S., just over 300,000 Americans work in highway, street or bridge construction—less than the population of Wichita, Kan.
In total, such construction employs just 0.2 percent of all workers. This includes less skilled employees on the worksites. Even doubling the number of jobs in the sector would have only small effects on overall employment
Second, Wilcox and Lehrman don’t see how—apart from the impact on labor—these policies are bad transportation policies. Obama’s infrastructure proposal would spend money the country doesn’t have on activities that are local, not federal, in scope, impose harmful taxes on American businesses’ foreign income and damage the federal budget process by putting transportation spending on autopilot. Each of these elements would result in bigger government, more money flowing through Washington, and less accountability for how transportation money is being spent.
It is the states, not Washington, which best know their transportation priorities and can best align transportation spending with consumer preferences. Congress should move in the direction of increased state, not federal, control.
Third, the authors overstate the nature of the challenges facing middle-class families today. Many on the left—and some on the right—argue that most Americans no longer benefit from economic growth. They come to this conclusion by making apples-to-oranges comparisons over time. Household sizes have shrunk, the population has aged, and benefits make up a larger share of income than they used to. The Reagan revolution also led to lower taxes on American families. Analyses that account for these changes find that the median family today enjoys as much as 50 percent higher real after-tax incomes than their counterparts did in the 1970s.
Examining middle-class consumption shows this clearly. Most Americans eat out more often, live in larger homes, have more cars, have more varied wardrobes, have more education and travel abroad more often than their counterparts did in the 1970s. Modern technology gives Americans entertainment options unavailable to even the richest of the rich in the recent past.
Despite these gains, many workers face real struggles in the aftermath of a deep recession and the subsequent anemic Obama recovery. Appropriate government policy would help them by promoting faster economic growth. The recent drop in energy prices has boosted the economy up and down the income ladder—as today’s robust jobs report demonstrates. Expanding American fossil fuel production by removing unnecessary government regulations would mean lower energy prices as well as tens of thousands of new blue-collar jobs. Educational reforms like expanding school choice and access to charter schools would also help give the next generation of workers the skills to succeed.
Finally, we’d be remiss if we didn’t point out that Wilcox and Lerhman also embrace Obama’s call to expand the Earned Income Tax Credit (EITC) to single men, claiming this would make them more likely to work and more able to marry. This, too, is a misguided policy prescription. As our colleague and welfare-reform expert Robert Rector has pointed out, “increasing the EITC for unmarried fathers who do not support their children is a bad policy that intensifies the anti-marriage incentives within the welfare system. Such a policy would increase overall welfare benefits for parents who do not marry and increase the benefits lost when the couple does marry.” Rather than expand EITC to single men, Rector explains, “Policymakers should build on the strengths of the EITC by toughening its work standards, preventing fraud and further reducing its marriage penalties.”
The past 40 years have not been marked by supply-side economic policies or moralizing about the family, as Wilcox falsely asserts. Instead, they’ve been marked by crony capitalism and misguided government regulations that have hampered the economy for everyone, and by social messages that celebrate the breakdown of the family. Indeed, as Wilcox’s AEI colleague Charles Murray has noted, if marriage is to thrive in blue-collar communities, then elites—who for the most part do form strong families—need to start preaching what they practice rather than promoting sexual chaos.
Several years ago The Heritage Foundation proposed “A Marshall Plan for Marriage.” We can craft public policy that will both be family-friendly and economically-wise. Claiming that big-government, wasteful public works packages are pro-family dishonors the term—and the conservative principles of limited government and a strong civil society that guide true pro-family policies.