President Joe Biden is in ongoing talks to discuss his multi-trillion-dollar infrastructure plan. Ever since its release, critics have claimed that many aspects of the plan have nothing to do with infrastructure.
However, that isn’t really fair.
Today’s economy requires the definition of infrastructure to go beyond traditional transit systems like roads and bridges. In fact, the Cambridge Dictionary defines “infrastructure” as the “basic systems and services that a country or organization uses in order to work effectively.”
This definition opens up the concept of infrastructure to include the things that make society function, allowing workers to do their jobs, businesses to grow, and people to transfer knowledge and information.
The traditional examples of infrastructure such as roads, bridges, and railways are hugely important. The delays caused by traffic jams alone cost the economy more than $120 billion every year in lost productivity.
But we need to invest in more than traditional infrastructure. We need to invest in the systems that move business, people, innovation, and communication forward.
COVID-19 merely accelerated a shift in digitizing our world, yet nearly 15 percent of U.S. households still lack high-speed internet. That hampers productivity.
If every U.S. household had access to broadband speeds of at least four megabits per second – the minimum to stream a standard definition video – the average household income would jump $2,100 per year, according to a study by telecom company Ericsson.
Building out broadband networks would grow the economy by enabling workers and consumers to connect with businesses of all sizes, whether they’re in Manhattan, New York, or Manhattan, Kansas.
Modern infrastructure also goes beyond digitization and broadband. It’s about how people are powered. Constructing solar, wind farms, and building a network of electric vehicle charging stations would make our economy more resilient to the changing climate.
Sea levels are rising and weather patterns are changing. As the intensity and frequency of droughts, hurricanes, and floods increases, so does the cost of recovering from these crises.
In 2020 alone, there were more than 20 separate climate disasters that cost at least $1 billion.
Those disasters displace workers. After Hurricane Sandy in 2012, more than 150,000 workers filed for unemployment. And last year, wildfires in California displaced more than 50,000 people from their homes.
Mitigating climate change would help minimize this disruption.
President Biden’s plan does address these modern-day challenges. In addition to updating bridges, highways and roads, the proposal promises $100 billion to expand broadband infrastructure.
It puts $174 billion toward electric vehicle infrastructure, which will mitigate climate change by enabling Americans to switch to lower-emission vehicles.
These investments will generate enormous returns. The infrastructure package would create 2.7 million jobs over the next decade, according to an analysis by Moody’s Analytics.
For every $1 spent on infrastructure in the plan, GDP would rise by $1.50. In total, S&P Global estimates the package would add $5.7 trillion to the U.S. economy by 2024.
As a new report from the Brookings Institution notes, “Every few decades, Americans have called for a new infrastructure vision to meet new generational needs.”
Provisions in President Biden’s proposal aim to help our nation move forward by laying the foundation for sustainable economic growth and ensuring America remains an economic superpower for decades to come.
Jason Andringa is chair of the Association of Equipment Manufacturers’ “Infrastructure Vision 2050” task force. He is president and CEO at Vermeer Corporation.