Human Capital – Our Most Valuable Infrastructure

Ask anyone about infrastructure and they will probably mention roads and bridges.  There is a broader definition, however, that describes an asset as infrastructure according to its contribution to the economy.  I believe this includes human capital – the knowledge, skills and experience of American workers. 

Congress finally approved some concrete and steel projects and President Biden eagerly signed his Bipartisan Infrastructure Law in November 2021.  Although much more investment like this is needed, this legislation is critically important.  It provides $1.2 trillion in funding to improve America’s roads, bridges, rail systems, airports and ports.  No question, but for the federal government, U.S. infrastructure improvements would be woefully underfunded.  Most states simply can’t afford to pay for them.

Still, I believe most Americans agree that these improvements were an appropriate use of their tax dollars and so should the leaders of all companies that do business in the U.S.  They will make life better for all U.S. residents and help businesses be more efficient and profitable.  Even some of the 200 House Republicans that voted against this law attempted to take credit for the projects it funded in their districts. 

I keep wondering though, why was it so difficult to get this quite modest but greatly needed bill passed and why has it been such a monumental task for decades to enact legislation to improve America’s human infrastructure?  And why isn’t our military a great example of the value for these investments.

Funding the Department of Defense is always a high priority for Congress, so it probably has the best maintained infrastructure the nation can provide.  This includes the Pentagon’s schools for 66,000 children of military families, which may be the nation’s best, according to a 2023 New York Times article.  It explains why: They are “well-funded, socioeconomically and racially integrated, and have a centralized structure that is not subject to the whims of school boards or mayors.”  As evidence it cites the fact that these schools outscored every other jurisdiction in the nation in math and reading in 2022.

In addition, these students are probably better fed than millions of public-school children. Plus, at least one parent is working and the military provides the family with housing and medical care.  Basic human needs like these are crucial for children to learn and develop.   

The National School Lunch Program (NSLP), which was enacted in 1946, recognized this fact.  It provides free lunches for students from households with incomes at or below 130% of the federal poverty level and reduced priced lunches for students from households earning between 130% and 185% of the poverty level.  Over 60% (30+ million) of all public-school children received these benefits in fiscal year 2022, according to USAFacts, a nonpartisan organization. 

If you think these statistics indicate that many students are poorly fed when not in school, you are correct.  

Still, earlier this year, 15 GOP governors refused to take advantage of a new, federal bipartisan summer program that would provide states with $2.5 billion in funding for healthier food options that will help 21 million low-income children when school isn’t in session.  Among these are Texas and Florida, the second and third most populous states.  Iowa governor Kim Reynolds cited an epidemic of childhood obesity as the reason her state would not participate, which I think is beyond ludicrous.

I believe red state resistance to federal programs like this is a significant reason why children are more likely to live in poverty in America than in most of our peer countries.  In fact, data analyzed by the Organization for Economic Co-operation and Development (OECD) for 2022 shows that American children under 18 are almost twice as likely to grow up in poverty as those in Germany, more than twice as likely as children in Canada and over three times more likely than children in Norway.  Its analysis also reveals that the U.S has child poverty levels like Chile and Mexico, which should embarrass our Congress.

To me, it makes perfect sense to lift people out of poverty, and strong evidence that doing so could reduce or improve the effectiveness of federal and state spending in the long term is provided by the following analyses.

An April 2020 study by the National Bureau of Economic Research, a nonpartisan organization, found that children who received food stamps under the Supplemental Nutrition Assistance Program (SNAP) were more likely in later life to be healthier, better educated, employed, earn higher incomes, be more self-sufficient and less likely to be incarcerated.   These benefits not only enhance the quality of life for these individuals, they reduce the burden of society (government) to care for them.  

A July 2023 report by the Congressional Budget Office states that Medicaid enrollment during childhood has been shown to increase earnings in adulthood.  Its research estimates that the long-term fiscal effects of Medicaid spending on children could offset half or more of the program’s initial outlays. 

All my research on federal budgets and programs leads me to conclude that shrinking the federal government and underfunding investments in the social safety net and America’s human infrastructure to offset the cost of tax cuts for corporations and the wealthy are shortsighted, disastrous policies.  They will be detrimental to the future of all Americans and to the U.S. economy, which will cause even more voters to believe empty populist promises and question capitalism and democracy.


Discover more from From the Center

Subscribe to get the latest posts sent to your email.

Unknown's avatar

About eeldav

I am a retired corporate attorney who has lived in both Europe and Asia. While working my responsibilities took me to over 40 countries in Europe, the Middle East, Africa and Asia.
This entry was posted in Uncategorized. Bookmark the permalink.

3 Responses to Human Capital – Our Most Valuable Infrastructure

  1. Fred's avatar Fred says:

    Great appraisal of how we are squandering our greatest asset and grossly undervalue it….our people. We heard a John Stewart interview with Rev. William Barber on the Daily Show this week regarding poverty in the country along similar lines. That fact that 60% of the nation’s children benefited from the school lunch should really bring how deep the economic divide is in this country. What a shame we are wasting our most valuable resource.

    Like

  2. Rhonda's avatar Rhonda says:

    Excellent summary. Why wouldn’t we invest in the improved health and well being of all citizens of the U.S.? Why wouldn’t we want to raise more people, particularly the young, out of poverty?

    Like

  3. marrowood25's avatar marrowood25 says:

    Very good read, and well stated. All infrastructure is good – but the human component often gets overlooked when we just look at bridges and pipelines. I’ve shared this on Facebook to my friends. It’s the kind of sound analysis that is this the antidote to the angry sound bites too many folks are binging on.

    Like

Leave a comment