Infrastructure bill expected to bring lower prices, more jobs
MICHEL MARTIN, HOST:
Two massive spending bills that Congress has spent months debating could have a big impact on day-to-day life for many Americans. One is now passed. That's the $1.2 trillion infrastructure bill. It includes money for improvements to, among other things, roads, bridges and broadband networks. The fate of the other bill, President Biden's Build Back Better plan, is still in limbo.
Now, much has been made of the political back and forth behind these bills, but we thought this would be a good time to better understand what they would actually mean for the American people. So we called Christelle Khalaf. She is the associate director of the Center for Business and Economic Analysis at the University of Wyoming, and she is with us now.
Christelle Khalaf, thank you so much for being here.
CHRISTELLE KHALAF: Thank you for having me.
MARTIN: So let's talk about the infrastructure bill first since that one is now set to become law. Where will the impact of this be felt most, in your view?
KHALAF: The immediate impacts are going to be probably felt in the construction industry. There's going to be a bunch of jobs there. Some reports estimate that it's going to be 1 million job over a five-year time period. But beyond the direct sectors that are going to be impacted by the spending, there are also going to be indirect effects in other sectors that are mostly supply chain sectors and also service sectors.
MARTIN: How do you think this will affect people's day-to-day life?
KHALAF: So investment in bridges and roads are going to make the U.S. more productive, which means it's going to lower costs for producers. So as consumers, we might feel it in lower prices.
MARTIN: I think most people realize, at some level, that the infrastructure in this country is in a state of disrepair. Does this bill do enough to address that?
KHALAF: I think so. I think so. There's going to be a lot of investments that are long overdue. But there's also a focus on resiliency and making sure that the infrastructure that exists is going to be able to sort of face some of these unexpected extreme weather events that we're seeing.
MARTIN: So let's talk about the Build Back Better Act. That's the social spending package. And that would target, you know, child care, paid family leave, efforts to address climate change. You know, this bill is still being debated, so some parts of it may not be in the final legislation. But knowing what we know right now, what parts of the bill would have the most impact on Americans?
KHALAF: So I think universal pre-K is going to be huge. There's an estimate that not having universal pre-K is costing the U.S. about 57 billion in lost earnings. And there's also a lot of evidence that shows that pre-K programs can produce a lot of benefits. They have a high return on investment. And honestly, it has an impact on their labor force outcomes.
MARTIN: And critics of both of these measures continue to point to their price tags. And some worry about them fueling inflation. How do you look at this?
KHALAF: So I think in terms of the inflation that we're currently seeing, it's important to remember that it's not really caused by additional spending. It's caused by these bottlenecks in the supply chain and the labor shortages. So just thinking about that, I don't think necessarily that this spending, if you're thinking specifically of the infrastructure bill, is going to have any impact on inflation.
Another concern with this, specifically with the infrastructure bill, is sort of this deficit spending, because there's a concern that if we have this deficit spending, then the effect on economic growth is going to be nulled. And I think my argument for thinking about this is, OK, so what is the alternative? If we do not spend, what happens to economic growth? And I think the impact is going to be negative. So we're sort of comparing possibly spending and staying on this path that we're on in terms of economic growth or not spending and then experiencing a negative impact on economic growth.
MARTIN: You're in a conservative part of the country. I'm just interested if your colleagues, your students, people in your community - does your analysis resonate?
KHALAF: I think it is. I think people are excited about investments in infrastructure. But they're also really excited about investment in broadband, specifically. So I think sometimes we get sort of bogged down in who is saying what, right? But at the end of the day, my experience is that people sort of want the same thing without necessarily knowing that they want the same thing. So they might be, you know, initiatives from one side of the aisle, but I think a lot of the time, they'd resonate with other people as well.
MARTIN: That was Christelle Khalaf. She is associate director of the Center for Business and Economic Analysis at the University of Wyoming. Christelle Khalaf, thank you so much for speaking with us today.
KHALAF: Thank you. Transcript provided by NPR, Copyright NPR.