How Much Does Congestion Matter?
In this blog post, I'd like to focus on element (c) of that chain of logic- the link between road congestion and economic growth. Both auto and transit lobbies occasionally suggest (as did Graves) that without more transportation funding, economic life as we know it will end.
If this were true, the most congested regions would be the most economically stagnant ones, and the least congested regions would be booming. But this is hardly the case. According to the Texas Transportation Institute, the two large regions with the lowest per-capita travel delay are Buffalo and Cleveland (2)- hardly economic powerhouses.
To be a little more scientific, I took a look at the nation's fourteen largest regions, and tried to compare their congestion and job growth levels.
In order of congestion levels, they are: 1) Los Angeles (70 hours lost to congestion per traveler), (2) Washington (62), (3) Atlanta (57), (4) Houston (56), (5) San Francisco (55), (6) Dallas (53), (7) Detroit (52), (8) Miami (47), (9) New York (44), (10) Phoenix (44), (11) Seattle (43), (12) Boston (43), (13) Chicago (41), and (14) Philadelphia (38).
If congestion was an extremely important factor in job growth, we would find that Boston, Chicago and Philadelphia are booming, and that high-congestion regions like Los Angeles, Washington and Houston were declining.
But in fact, there appears to be almost no correlation between congestion and recent job growth. The 2000-09 job growth levels (3), in order, for these regions were: (1) Houston + 11.3%, (2) Washington + 10.6%, (3) Phoenix + 8.4%, (4) Dallas + 5.3%, (5) Miami + 4.9%, (6) Seattle + 2.5%, (7) New York + 0.6%, (8) Atlanta -0.8%, (9) Philadelphia -1%, (10) Los Angeles -3%, (11) Boston -4.3%, (12) Chicago -5.5%, (13) San Francisco -10%, (14) Detroit -20.7%.
As you might notice, the three least congested regions all suffered negative job growth between 2000 and 2009. By contrast, the two fastest-growing large metro areas, Houston and Washington, are also among the most congested. On the other hand, Los Angeles and Atlanta experienced high congestion and negative job growth, while Phoenix and Seattle had relatively low congestion and moderately positive job growth.
It could be argued that there is a lag between congestion and growth, as businesses move out of a city in response to congestion. If this was true, prior congestion data would show a much stronger relationship to job loss than the most recent data. But in 1997, the congestion rankings were pretty similar to those of 2007. (4) Then as now, Los Angeles was the most congested of the major urban areas, followed by Atlanta and Washington (as well as Seattle, which tied with Washington for third place). Then as now, Philadelphia was the least congested of the major cities; the least congested regions after Philadelphia were Boston and New York. \
In sum, the correlation between congestion and job growth is pretty weak. It logically follows that even if the federal government reduces transportation spending, and even if such reductions do increase congestion, the overall economic effect of this result may be pretty small.
Let me emphasize what I am not arguing: I am not arguing that congestion has no economic costs. It makes sense to me that other factors being equal, businesses would rather locate in a place with less traffic rather than a place with more. But I am arguing that congestion is one of many, many factors affecting our economy, and that its alleviation should be balanced against other factors.
To put the matter another way: the Texas Transportation Institute estimates that congestion cost the national economy $87 billion per year.(5) Sounds pretty bad, doesn't it? But US GNP is about $14 trillion per year, so the cost of traffic congestion is less than 1 percent of GNP.
Ironically, traffic congestion is a bit like the accommodation of bicycles. It seems to me that Americans' quality of life would be higher if they sat in traffic less. It also seems to me that Americans' quality of life would be higher if they could bicycle more safely and conveniently. But I doubt that the long-term success of the U.S. economy depends on getting either issue right.
(5) Id., Table 2.