By: Wojciech Kic
In England, the once-celebrated rail system is a disgrace. Many trains are running late and services connecting cities may be suspended with little notice.
Britain is attempting to fix the system. A 10-year, $100 billion rail fix-up is under way. Why? It’s Partially due to public exasperation and partially due to the economic losses caused to the English public.
It is estimated that every 12 months, passengers waste the equivalent of 4,533 years waiting for trains.
That’s 1,654,545 days or 39,709,080 hours. At an average productivity impact of a working hour (for employer and employee) of $100 per hour, the public loss to England caused by slow trains is no less than $3,970,908,000 a year. And these figures do not even account for losses due to slow or delayed deliveries of cargo (as opposed to just-in-time delivery).
A similar situation exists in Houston. An analysis of the cost of the economic impact on Harris County and surrounding counties of the proposed reduction in local highway speed limits invites economic impact scenarios that surpass the entire English rail system.
An immediate re-examination of this well-intended environmental speed reduction decision would prevent a local economic catastrophe.The proposed reduction in speed limits from 60 or 70 miles per hour to 55 miles per hour will stop economic growth
Once the city’s economic growth slows to zero, it will be dismissed as a process of merging the local with the national economy.The impact of the reduced speed limits will be dismissed.The correction of the problem will no longer be available.
But Houston is just too competitive of a city to merely merge with the national economy. No zoning, relatively few business start-up restrictions, no rent controls and strong property rights are all local characteristics that we take for granted. But reduced speed limits? That may be too much for the competition.
Let’s make basic assumptions about Harris County and the surrounding areas. Daily car traffic is about 10 million vehicles. Average time spent in a car daily is about 90 minutes. Average additional time required to drive daily due to reduced speed limits will be about 15 minutes.
Not much? Let’s see: 10 million cars times 15 minutes equals 150 million minutes or 2.5 million hours lost. Daily. Cut all the above assumptions in half and you get $31.25 million lost. Daily.
Apply this on a national scale in 1994, and you get the answer to the 1990s economic miracle brought about by increasing the speed limit to 70 mph. Apply this on a national scale in 1974, and you get an explanation of what stagflation really means. (The labor lost to save one gallon of gas due to slower driving.)
But there must be an error somewhere. Because I don’t really care how much time I spend in my car. I work the same nonetheless. I go to school nonetheless. Well, you may not care, but someone else does. More time on the road means fewer TV watching hours, less Internet, less shopping, less time for eating out, less time for everything else that makes other people work for us. Really? Yes. The answer to economic productivity is that simple.
We all need more time to do more. Cars and highways make it all happen faster than anything.The lack of attention to the economic impact of the speed of a car or truck on us all has no rational explanation.
But in the Internet age we now know that we are all customers and business providers all the time. Every minute of everybody’s time is what we are really competing about. Would you consider an 8K modem today? Or an 8-bit computer chip?
The analysis also yields a solution to the clean air problem.The immediate answer is a public investment in zero emission filtering equipment for the existing local refineries and chemical plants. An immediate bond issue and grants of air cleaning equipment to the local pollutants make the most economic sense.
A bond issue, albeit a subsidy, will accomplish the goal of cleaner air cheaper and faster than the car speed limit reduction alternative. Public bonds and grants are only a fair solution. The air pollution was permitted before. Now it is not.
Why then a costly economic slowdown? Let’s identify everything to accelerate the economy instead, with faster Internet connections (yes, Southwestern Bell), faster planes (good job, Boeing) and, yes, higher highway speed limits. Let’s release time. Let’s not waste it.
The unintended consequence of reduced speed limits is a looming disaster for the local economy.This mandates an immediate reexamination of the reduced speed limit issue. Delaying installation of the old double-nickel speed signs would be a necessary start.
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