The census always provides interesting information about American lifestyles. The tabulations of 2000 data released earlier this week are no exception.
Particularly striking is the fact that Minnesota commuters now spend nearly 22 minutes driving from their homes to work. A few simple calculations tell us that the typical Minnesota worker averages 25 hours more windshield time per year — more time than they would if commutes hadn’t changed since 1990.
Can we put a monetary value on this time? Yes, but it’s best to use a number of assumptions and look at the range. No matter the figure, the exercise illustrates the importance of wise public spending on transportation.
We could value it at the minimum wage of $5.35 per hour. This gives us a cost of extra commuting time of some $267 million per year or $187 per commuting Minnesotan.
We could also take the median household income of $47,111, assume that there are 1.5 wage earners per household and that they work 40 hours each week for 50 weeks. That yields median hourly earnings of $15.70 per hour. With these assumptions, excess commuting time costs the state more than $780 million and the average worker about $393 per year.
We need to exercise some caution however. First, increased average commuting times aren’t necessarily the result of deteriorating transportation infrastructure or of road congestion.
Perhaps, on average, people voluntarily are choosing to live farther from where they work than they did in 1990. In this case, average driving times would be longer even if roads were in tip-top shape and there were no more traffic jams, slowdowns or congestion than a decade ago. This certainly explains part of the increase.
The suburbs of most metropolitan areas extend farther from the core city than a decade ago. Minnesotans continue to value low-density housing and some element of “country living.”
If they choose to work in Fargo, but live in a small town 25 miles across the Minnesota border, that’s not a sign that transportation spending is inadequate.
Second, assigning dollar values to people’s time based on minimum wage levels or on average earnings is tenuous. Some people enjoy moderate commutes as a psychological change of pace between home and work environments, as a chance to collect their thoughts, catch up on the news or socialize with car pooling comrades. Many wouldn’t be willing to spend their average earnings or even $5 per hour to lessen time spent driving.
Third, spending on transportation infrastructure isn’t the only way to lessen windshield time.
Many people balance driving costs — in both cash and time — with housing costs. The more expensive housing is close to jobs, the farther people are willing to drive for less expensive housing. Any public policies such as zoning or building codes that unduly limit construction of new housing in inner cities and first-ring suburbs inevitably motivate people to drive farther.
But there are some caveats on the other side of the equation, also.
Increased congestion and commuting times aren’t the only social cost of inadequate roads and public transit. Cars get more wear and burn more fuel. There’s more pollution and more accidents. Transportation of goods is more expensive.
Congestion may deter firms from expanding their operations in a specific city. This doesn’t necessarily hurt the nation or the state as a whole, but it may hurt job and tax base growth in specific municipalities.
In rural areas, inadequate roads for truck transportation may similarly drive new enterprises away from specific small towns.
Finally, the cost ranges are annual figures. Investments in infrastructure last a long time. Ignoring maintenance or operating costs, a $500 million saving to society in reduced commuting time would amortize an expenditure of $5 billion to $6 billion over a 20-year period at the interest rates paid on state bonds.
Since average incomes and the opportunity cost of time spent in traffic will probably rise over two decades, this calculation underestimates the justifiable investment. Moreover, while some road components such as the surface course of pavement may not last 20 years, land acquisition and basic earthmoving last a lot longer.
What is the upshot of all this? The census is telling us that the Legislature may have hurt Minnesota by failing to adequately invest in transportation infrastructure.
But there are many ifs involved, and perhaps the best initial step would be to spend more money on solid economic and engineering studies to better specify the costs and benefits of different transportation alternatives.
© 2002 Edward Lotterman
Chanarambie Consulting, Inc.