Download NEW REPORT FINDS FREIGHT RAILROADS GREATLY IMPACT

NEW REPORT FINDS FREIGHT RAILROADS GREATLY IMPACT NATIONAL, LOCAL
ECONOMIES
Towson University Research Finds Railroad Investments Produced 1.5 Million Jobs, $274 Billion in
Economic Activity and $33 Billion in Tax Revenues in 2014
WASHINGTON D.C., June 13, 2016 – The Association of American Railroads (AAR) released
today its second “State of the Industry Report” of 2016, featuring new research from Towson
University’s Regional Economic Studies Institute (RESI) that finds spending by the seven largest
U.S. railroads created $274 billion in economic activity, generated nearly $33 billion in state and
federal tax revenues and supported nearly 1.5 million jobs nationally in 2014 alone.
The report is the first of its kind to quantify the sweeping impact of investments by Class I
railroads with U.S. operations on the overall economy.
“Railroads maintain high paying jobs within its sector and create numerous jobs in related
industries that collectively spur significant economic activity,” said Dr. Daraius Irani, lead
researcher and Chief Economist at RESI. “Significant capital investments by railroads and the
steady presence of a coast-to-coast network that can reliably deliver goods at a cost effective
rate generates a ripple effect seen in this study. Railroad spending means job growth, dollars to
communities and global competitiveness.”
The AAR adds context to the data in the report with several key points, including:
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Spending: $28 billion in investments by freight railroads in 2014 is more than half of all
federal spending on transit formula grants, federal highway construction programs and
airport improvement programs combined.
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Output: $274 billion in output – or goods and services produced – is nearly the GDP of
Finland, according to International Monetary Fund Data. This amount of money could
build 24,909 miles of six-lane urban interstate highway, fund Medicare for nearly 25
million Americans or pay for the four-year college education of 2.2 million students.
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Jobs: One job in the freight rail industry supports nine others touched by the industry,
including retail, manufacturing and transportation and warehousing.
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Taxes: The rail industry’s state and local tax generation is greater than the taxes
collected by 30 individual states in 2014; The nearly $21 billion in federal taxes is nearly
three times the amount allocated for the National Science Foundation in 2014.
“Railroads provide the foundation that enables the world’s top economy to thrive,” writes AAR
President and CEO Edward R. Hamberger in the report. “For manufacturers and consumers, small
and large businesses, energy companies and farmers, freight rail is the basic building block that
allows a great sweep of economic activity to take place across the country. Without railroads our
economy would be vastly different.”
Hamberger and economists make clear, however, the strong economic impact requires smart
public policy that does not impede day-to-day operations or diminish continued private capital
investment.
“Any lawmaker considering additional regulations should take a long-term view,” said Clifford
Winston, an applied microeconomist at the Brookings Institution.
“Realize that this industry is still evolving from an inefficient past,” he stated, “and while there
may be some bumps along the way, overall, the path the industry is on today has been much
better for railroads and American society compared with the industry’s evolution when it was
stifled by excessive regulations before regulatory reform began in the 1970s.”
Similar to AAR’s first State of the Industry Report, this edition features a mix of content across
multiple chapters. Articles support the foundational research from RESI, analyzing impact across
four areas: national economy, customers, consumers and public policy. This includes how:
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Railroad industrial development teams catalyze economic growth in communities.
Freight railroads help make Americans’ lifestyle possible, including in moving
automobiles for customers and providing track for commuter and passenger rail.
Smart public policy continues to improve safety performance.
The second State of the Industry Report also features insight from experts and organizations like
the aforementioned Brookings Institution, as well as Competitive Enterprise Institute, the
University of Oregon and R Street, who provide context and unique perspectives.
AAR invites interested parties to learn more about the State of the Industry Report and see how
the industry’s continued investments help drive the economy by visiting AAR.org.
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For more information contact: AAR Media Relations at [email protected] or 202-639-2345.
About AAR: The Association of American Railroads (AAR) is the world's leading railroad policy,
research and technology organization focusing on the safety and productivity of rail carriers.
AAR members include the major freight railroads of the U.S., Canada and Mexico, as well as
Amtrak. Learn more at www.aar.org.
Follow us on Twitter: @AAR_FreightRail or Facebook: www.facebook.com/freightrail.