As Infrastructure Money Lands, the Job Dividends Begin
It has never exactly been boom times for the archaeology profession, but this past year comes close — thanks to Congress.
Kim Redman runs Alpine Archaeological Consultants, a firm that searches for historically or culturally valuable artifacts in the path of construction — an essential step for federally assisted projects. For decades, she has hired temporary workers (affectionately known as “shovel bums”) to comb the ground.
These days, she’s bringing on as many full-timers as she can, as billions of dollars in infrastructure appropriations make their way down through the states.
“If you’re going to build a road, we’re at the beginning of the process,” Ms. Redman said. “The opportunities in archaeology are immense right now — everybody’s trying to hire so we can meet the demand.”
Archaeologists are on the leading edge of a wave of jobs that will result from $1.2 trillion in direct government spending from the 2021 Infrastructure Investment and Jobs Act. Two subsequent initiatives — $370 billion in incentives and grants for lower-emissions energy projects provided by the Inflation Reduction Act, and $53 billion in subsidies for semiconductor manufacturing funded by the CHIPS Act — are expected to leverage tens of billions more in private capital.
An archaeological crew excavating an Ancestral Pueblo pit house in southwestern Colorado in advance of a highway project.Credit…Rand Greubel/Alpine Archaeological Consultants
The primary purpose of the three laws isn’t to stimulate the economy; they are mainly intended to combat climate change, rebuild infrastructure and reduce dependence on foreign semiconductors. But they will affect the labor market, including a reallocation of workers across sectors.
The funding comes as the economy is decelerating, and it may avert a sharper dip in employment brought on by the Federal Reserve’s attempts to contain inflation by raising interest rates. The construction industry, in particular, has been buffeted by a slowdown in new-home sales and stagnant demand for new offices.
“By spring or summer, the job market will basically go flat,” said Mark Zandi, chief economist for Moody’s Analytics. “The infrastructure spending won’t kick in until late 2023, going into 2024. It feels like the handoff here could be reasonably graceful.”
Nevertheless, the exact number of jobs produced by the three pieces of legislation is uncertain and may be difficult to notice in the aggregate.
The State of Jobs in the United States
Economists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.
- Noncompete Agreements: A sweeping proposal by the Federal Trade Commission would block companies from limiting their employees’ ability to work for a rival.
- Retirees: About 3.5 million people are missing from the U.S. labor force. A large number of them, roughly two million, have simply retired.
- Switching Jobs: A hallmark of the pandemic era has been the surge in employee turnover. The wave of job-switching may be taking a toll on productivity.
- Delivery Workers: Food app services are warning that a proposed wage increase for New York City workers could mean higher delivery costs.
The only jobs that are possible to count precisely are those created directly by the federal government. The Office of Personnel Management, which set up a handy filter for jobs associated with the infrastructure law, aims to hire 7,000 people by the end of September.
The actual number, of course, is larger. Dr. Zandi’s analysis of the infrastructure law found that it would add nearly 360,000 jobs by the end of this year, and 660,000 jobs at its peak employment impact at the end of 2025. He does not expect the Inflation Reduction Act to affect employment significantly, given its lower public expenditure.
A group at the University of Massachusetts Amherst disagreed, forecasting the Inflation Reduction Act’s impact at 900,000 additional people employed on average each year for a decade. Betony Jones, director of energy jobs at the Department of Energy, thinks the number could be even higher because the bill includes incentives for domestic sourcing of materials that may create more jobs along the supply chain than traditional economic models account for.
“It will change those assumptions in significant ways,” Ms. Jones said.
But a number of mitigating forces make that number less powerful than it appears.
Some of the jobs already exist, for example, since much of the money will go to extend tax credits that would have expired. The estimate includes jobs that are supported by infrastructure workers’ wages, from hairdressers to plumbers.
It’s also a gross number, not accounting for the employment that the Inflation Reduction Act could subtract through the taxes it imposes on corporations, or the fossil fuel jobs that might disappear as renewable energy capacity increases. And plenty of the new infrastructure jobs will be filled by people who might otherwise be working in other sectors, especially if they’re better paid.
At the same time, inflation has made construction materials more expensive, decreasing the purchasing power of public agencies. For the first portion of money from the infrastructure law, which was allocated to states by a formula in the first half of 2022, that largely meant salvaging large projects already underway that might otherwise have been stymied by rising costs.
For all of those reasons, said Alec Phillips, chief political economist for Goldman Sachs, the infusions of cash haven’t increased his payroll employment projections for the coming year.
“This is not happening in a vacuum,” Mr. Phillips said. “Once you go through all those factors, it’s one of those things that wouldn’t influence our employment forecast all that much.”
Nonetheless, the industry-level impact will be significant. The nation will need more people working in construction and manufacturing in the next few years — even if they come from other professions or, ideally, the ranks of people who aren’t working.
That has given organized labor a rare opportunity to expand. In a policy reversal, the infrastructure law allows federally funded transportation projects to require hiring from the local community, which can aid union organizing. The Biden administration also issued an executive order in early 2022 favoring collective bargaining agreements with unions.
The infrastructure law includes $42.5 billion for expanding broadband access — part of about $100 billion provided across several measures — and the agency running the program expects work on the cables and cellphone towers to start in 2024. The Government Accountability Office estimated that 23,000 more people would be needed when deployment peaked. The Communications Workers of America, a union that represents about 130,000 telecommunications workers, said that members had often left for other occupations as industry conditions deteriorated and that many would come back for the right salary and benefits.
“There’s a lot of people sitting on the sidelines,” said Nell Geiser, the union’s research director. “They are not willing to take what’s on offer.”
It’s clear, however, that new workers will be needed to meet the demand.
That’s why unions are gearing up training programs and recruiting apprentices, or even “preapprentices,” some directly out of high school or prison — times when people sometimes struggle to find work.
Mike Hellstrom, Eastern regional manager of the Laborers’ International Union of North America, said the union’s apprenticeship applications had been snapped up within minutes of release. His region — New York, New Jersey, Delaware and Puerto Rico — stands to get $45 billion just from the infrastructure law.
“It’s going to be a really unique time of our lives of being construction workers and watching this building boom we’re about to come into,” Mr. Hellstrom said.
Recognizing the need for new workers, the infrastructure law in particular allows state agencies enormous flexibility in using funds for work force development. So far, they’ve been slow to take advantage of it. One reason: You can train people, but if you’re not able to compensate them competitively because of limits set by the state legislature, they’ll go somewhere else.
“I think the biggest challenge for state departments of transportation on the work force side are what wages they’re able to pay,” said Jim Tymon, executive director for the American Association of State Highway and Transportation Officials. “That really isn’t tied to the federal dollars as much as it is to the restrictions that each individual state has because of their government employee pay scales.”
Partly for that reason, as has long been the case, much of the work will be awarded to construction firms, which have more flexibility to offer higher wages. Their capacity isn’t infinite, however. Already, the wave of impending business has prompted concerns that some projects may not attract enough bids to ensure competition.
That may not be a problem for huge undertakings, like a $935 million award to rebuild two locks on the upper Ohio River, a project that the Army Corps of Engineers expects to directly support 8,900 jobs. But it can prove more difficult for smaller jurisdictions that may lack the staff to solicit bids.
Emily Feenstra, chief policy and external affairs officer for the American Society of Civil Engineers, said more coordination would be needed to ensure that all the money that Congress allocated was spent.
“On that smaller scale, it’s almost like matchmaking — finding the firm, finding the agency and seeing where the needs are,” she said.
All of that is good news for people doing the work, like Roger Oberdier, 33, who was hired at Alpine Archaeological Consultants in October. He was happy to find a staff position after picking up jobs all over the country and is applying to Ph.D. programs to advance his career, in which he plans to specialize in zooarchaeology (which means a lot of digging up butchered animals).
And the increasing demand for talent affects the whole field. Even friends who don’t want permanent jobs are doing pretty well, hopscotching the country looking for evidence of ancient human activity, Mr. Oberdier said. Job websites like archaeologyfieldwork.com are stacked with listings at pay rates significantly higher than they were in previous years.
“Right now, the job market is in favor of the job seeker,” Mr. Oberdier said. “My friends who are committed shovel bums — who never want to sit in an office and write a report, they just want to travel the world and hike to new places and be the first person to see something in 10,000 years — they are taking the jobs they want right now.”