This article appears in the January 27, 2014, issue of National Review.
As President Obama and the Democrats prepare for the midterm elections, they have once again turned their focus to economic policies, such as increasing the minimum wage, that they think give them political advantage. An underappreciated contributor to excessive partisanship is the tendency for politicians to focus all of their attention on the few things we disagree about most.
Our policies are such a mess that there are potential areas for progress lurking around every corner. Perhaps the biggest juicy piece of low-hanging fruit is something many NR readers experience every day: traffic congestion. Congestion in the U.S. today is a larger drag on growth than almost anything else, and better traffic and planning policies in many urban areas could go a long way to improving the economy.
As the nearby chart shows, traffic congestion in the U.S. has grown worse and worse over the past three decades, as the population has grown, people have moved to cities, and the number of miles driven by Americans each year has increased. The chart displays the total hours and total gallons of gasoline wasted due to congestion each year. These totals were calculated by measuring the difference between a free-flowing trip and the actual speeds that commuters experience and tallying these differences up over each year. Although the general upward trend dipped marginally in the years following the recent recession (the jobless don’t commute), it is clear that the amount of time and gasoline wasted due to congestion has grown to an astonishingly high level. All of this congestion also means added emissions from cars that sit in traffic.
As congestion has grown worse, so has its estimated cost each year, represented in the chart in millions of dollars. In 2011, the total estimated cost of congestion in the U.S. topped $120 billion. Think of that as an annual tax on Americans that could be eliminated with better road management and the scale of the policy opportunity becomes readily apparent.
Congestion slows business activity as well, which raises costs and reduces sales and output. A 2009 study by Kent Hymel showed that these costs add up: Using data on congestion, existing road infrastructure, and employment, he estimated that a 50 percent decrease in congestion in the United States’ ten most congested cities could boost long-run employment growth in those cities by 10 to 30 percent, and economic growth along with it.
Along with slowing economic growth, congestion takes a toll on health. Janet Currie and Reed Walker describe in a 2011 paper how introducing the E-ZPass at toll booths was tied to a decrease of 10.8 percent in prematurity in infants who lived near toll plazas, owing to fewer cars idling at plazas. Living near highways has been tied to increased rates of asthma and heart disease as well.
There is plenty of policy Sudafed for this problem. We could build more roads, increase tolls during rush hour, add more fast-passes to avoid tollbooth traffic, and improve public transportation. While members of the different political parties might favor different combinations, the key point is that pricing road use could help solve the problem, and provide a double dividend as revenues are used in other ways.
-Kevin Hassett is the John G. Searle Senior Fellow and Director of Economic Policy Studies at AEI