Today’s Solutions: December 08, 2023

Cities are working hard to kickstart a post-pandemic economic recovery, and a big part of this effort is retaining existing businesses and recruiting new ones. Economic development expert David Zipper writes for Bloomberg that while many cities focus on tax breaks to attract new companies, improving transportation infrastructure is far more impactful.

Companies consider many different factors when it comes to locating offices and storefronts, but at the end of the day, attracting high quality employees and boosting productivity are top priorities. Transportation plays a big role in this.

Lower commutes time and accessible, affordable transportation options attract workers to cities and actually improve productivity by avoiding long, exhausting journeys to the office. Despite this evidence, most cities are ignoring the role of transportation in boosting economic prosperity.

Alain Bertaud, a senior fellow at New York University’s Marron Institute of Urban Management, reminds us that even if an employee gets a great job, if it’s in a city with poor transportation and limited accessibility to other opportunities, they’re more likely to take a different job in a city with more room for growth. “Bad transportation is a tax on business productivity,” says Bertaud.

Enrico Moretti, the author of The New Geography of Jobs, agrees and notes that when cities have poor transportation infrastructure, different areas of the city are forced to operate as individual labor markets. When transportation is available, it opens up a whole new labor market by offering easy access to workers across the city.

On top of job availability and attractiveness to businesses, good public transportation offers other benefits that make cities more appealing. Reduced air pollution, higher climate resiliency, less traffic, and less money spent on personal vehicle maintenance are all added bonuses.

Many European cities have heavily emphasized transportation as an economic strategy for years, but unfortunately, it’s an often-overlooked method in US cities. Part of this challenge is the amount of time it takes to build a functional transportation system. Zipper summarizes, “Many mayors running for reelection would prefer to step up to a podium to declare ‘I recruited this company here,’ than announce ‘I reduced average commute times from 36 minutes to 33 minutes, making companies in this city more competitive and workers better off.’”

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