Now if I’m being honest here, I will admit that public transport advocates do get hammered a bit on the whole “economics of transport” debate. The roads lobby constantly states how through petrol taxes trucks and cars pay their way, yet at the same time rail and buses simply can’t fund themselves and require massive subsidies. Now I’ve always thought this strange – that something which just seems so much more efficient (putting a whole lot of people inside a metal box and moving them) could actually be not as economically justifiable as something which just was so obviously less efficient (putting one person in a metal box and then shifting heaps of those metal boxes).
Thanks to a most excellent book that I own, called “Asphalt Nation: how the automobile took over America and how we can take it back“, by Jane Holtz Kay, we can see the argument for cars over public transport start to unravel. Not only in terms of the environmental and social impact of cars – but in their economic inefficiency, striking at the very heart of those who promote roads-centric policies. It’s a book that Steven Joyce, Minister of Transport, should definitely read. It is written from an American perspective, but pretty much everything can be applied to New Zealand as we’re definitely one of the most auto-oriented countries in the world, particularly in the case of Auckland. An interesting quote on page 128 looks at the overall cost to individuals of transportation:
While the Japanese walk, bike and pay three times our gas tax, we pull mere pennies from our pockets at the pump and then subsidise the car. The Japanese pay 9 percent of their gross national product for transport; the United States pays 15 to 19 percent. Europe does better too. By paying a truthful $5 a gallon, plus three to five times what the United States pays in visible car-based fees, the Japanese and Europeans have an awareness of costs. The consciousness makes them decrease their driving and curbs cars in cities. It encourages a more compact land use policy and hence promotes four to eight times as much public transport. The reverse obviously holds: Americans pay less for gas and little for tolls and user fees – and this freewheeling policy encourages them to use almost five times as much gas per capita as residents of European cities and ten times as much as those in typical Asian ones; to drive infinitely more, undercut mass transit, build more roads, buy more costly cars, pay more in personal and social fees, and spend more for maintenance.
Substitute America for Auckland and just about the exact same thing could be said. It is true that we pay higher petrol taxes in New Zealand than Americans do, so our cars do pay their own way much more. However, it’s still fascinating to see that Americans spend twice as much of their GDP on transport as Europeans and Asians. Not particularly efficient if you ask me.
David Aschauer, an economist from Bates College, has some interesting facts when one looks as the economic productivity of public transport versus roads building. This is particularly significant at the moment, where investment in transport (read: roads) is being highlighted by the government as one of the ways in which they hope to minimise the recession through economic stimulus.
Spending on public transportation has twice the capacity to improve productivity as does highway spending. A nickel spent on mass transit carries at least twice the impact of a nickel spent on roads. A billion dollars invested in mass transit produces seven thousand more US jobs than does the same amount spent on road construction. A ten years $100 billion increase in such transit investment would enhance worker output five times as much as if made in roads.
Aschauer concludes that “public transportation spending carries more potential to stimulate long-run economic growth than does highway spending.” The reasons for this are obvious, that public transport creates many long-term jobs for bus and train drivers, for those maintaining stations and so forth. Roads construction is very capital intensive, but not actually that labour intensive, so therefore not a particularly efficient way to provide jobs and real economic stimulus.
If one looks at the economic costs of private transportation at a more personal level, its inefficiency becomes even more super obvious. Page 130 of “Asphalt Nation” looks into that further:
In terms of personal use, as well as GDP, the American family spends around 20 percent of its annual income on transportation, plus hidden costs. The Japanese spend only 9 percent, despite having more expensive cars, while Europeans spend a scant 7 percent. While Americans take only 5 percent of their trips on foot, Europeans and Japanese take 20 to 50 percent of their trips on foot and garage their pricey cars. In land costs our highways often steal almost half the space in our cities, Japanese roads one-quarter. In the fifteen most congested US cities alone, our car-bound transportation system adds about $7.6 billion to the price of goods.
I think the main point to take here is that the true costs of an auto-dependent society remain somewhat hidden, or are accepted because we all pay for them individually (rather than paying taxes to subsidise public transport). Contrary to what Libertarians would love you to believe, just because something it paid for through taxation rather than user-pays does not make it more efficient or cheaper. Ironically, if you look at all the hidden subisides the car receives, it actually appears as though auto-dependent societies pay more individually for transport and also pay more through their taxes for transport, when compared with countries that have a more balanced transport infrastructure like Japan.
The provision of parking in a particularly interesting one, especially if we look at who really pays for “free” parking. I will devote a whole post in the future to parking, but Asphalt Nation has some interesting stats which are worth mentioning.
Parking, 95 percent seemingly free to the driver, is, in fact, a drain, adding more than $600 to a home and $1200 to an apartment. For the 85 million employees given apparently free parking spaces, worth $1000 apiece, it amounts to an $85 billion lure.
This is the kind of stuff the roads lobby just doesn’t tell you.
7 thoughts on “The REAL cost of automobile dependency”
Brilliant points, all of them.
It might be a good idea to draw these points into a PDF and post them on the CFBT web site because this post will get lost in time and these are really good facts to point to.
Good point – I’ve categorised this post as an article so it turns up under that menu. I’ve also tagged it so it should be easy to find again using the “tag cloud” on the bottom left hand side.
Don’t worry apl I certainly won’t be forgetting this information. It would have made for a good submission on the Government Policy Statement for transport. Oh well…. some might be useful for ARTA’s Auckland Transport Plan hearings that are coming up I suppose.
“The reasons for this are obvious, that public transport creates many long-term jobs for bus and train drivers, for those maintaining stations and so forth. Roads construction is very capital intensive, but not actually that labour intensive, so therefore not a particularly efficient way to provide jobs and real economic stimulus.”
There is a flaw to this part of the argument. New roads induce more traffic thereby creating many long-term jobs for those maintaining and panelbeating cars and so forth.
Road and rail works that are primarily concrete pours are very capital intensive, but not actually that labour intensive. That is one good reason for not throwing huge amounts of money at major new urban infrastructure such as the CBD tunnel or Waterview connection, even if either project was ‘shovel ready’. Fortunately ordinary highways in this country are built with flexible pavements so construction accounts for a much smaller proportion of life-cycle costs than is the case for the concrete pavements typicaly used in the USA and maintenance accounts for a much higher proportion of life-cycle costs.
If the objective is to funnel funding into shovel ready transport projects to stimulate unskilled and semi-skilled employment then catching up on maintenance backlogs is the obvious area where the money needs to be spent. Unfortunately no politician has ever made a name for themselves by ensuring that public assets are properly maintained, they all want a monument that they think will make their name immortal.
Highway maintenance is quite labour intensive, but then so is rail maintenance. Highway construction is unlikely to be any more (or less) labour intensive than rail construction.
So I guess the difference in “jobs creation” comes down to the bus and train drivers, and all the other jobs that are created in a public transport system. Not the MAIN advantage of public transport, but in times like we have at the moment certainly not something to completely ignore.
Jarbury, I seems we agree that spending on highway and railway works will be equally effective at directly creating jobs.
During a depression maintaining local roads does have the advantage of creating jobs where the unemployed live, unlike the Great Depression road schemes in this country that built ‘scenic drives’ in remote locations. Highway and railway works are less likely to be spread around in the same useful way as local road works.
The point you seem to have missed from my previous comment is that the operational employment that flows from building new PT routes will also occur when building new highway routes as a consequence of the induced traffic effect. Where new railways need new drivers, new station staff and new signals and train maintenance staff, the induced new traffic from new highways will need new mechanics, new panel beaters, new brakepad and tyre fitters, etc. Assuming, of course, that the majority of vehicles are serviced at the recommended km intervals rather than at the recommended time interval.