How Traffic Congestion Hurts the Economy

Nobody likes sitting in traffic. It’s boring, frustrating, and unfortunately — commonplace. Heavy traffic keeps you from hitting deadlines, getting to meetings, and spending more time with your family. However, many people don’t see these issues at the macro scale. When millions of people have to spend extra time on the road, it can have a major impact on the economy.

There are actually dozens of different reasons for traffic congestion. Some of them are avoidable, while others are not. In any case, let’s look at some of the most common causes of traffic:

• Population Density - If you live in a densely populated area, it’s nearly impossible to avoid traffic on a daily basis. A good public transportation system can help, but ultimately millions of people will still hit the road for the sake of convenience.

• Engineering - Poorly planned highways and city centers only add to the problem. Many cities develop from townships created long before the automobile even existed.

• Timing - The time you get on the road will affect your experience of traffic. If you need to get to work at 9 AM and leave at 5 PM (like many other people), you will probably have to spend a lot more time on the road.

• Construction - You’ve probably seen Jersey Barriers and construction workers diverting traffic in your area. Construction can force more cars into fewer lanes, greatly increasing congestion and the time it takes to get from point A to point B.

• Weather conditions - Areas that experience frequent rain, snow, or sleet are more likely to experience severe traffic jams.

• Accidents - Some cities simply have more accidents than others. The frequency of accidents also has an effect on overall traffic congestion.

Now that we’ve looked at the causes of too much traffic, it’s time to evaluate the economic impact of traffic congestion. In essence, traffic gives people less time to do their jobs. This can lead to inefficiency at the individual level. When you zoom out to look at the impact this has on the local or national economy, the results are staggering.

In 2018 alone, traffic congestion cost the US economy $87 billion. Technically, this was a drop in the bucket when considering the United States’ GDP for that year, which was in excess of $20 trillion. However, it had a much greater impact at the local level.

In Washington D.C., a city stricken with severe wealth inequality, traffic congestion cost the local economy about $4.1 billion. This hurts the economy at just about every level. Local businesses make less money, which means they have to reduce costs and fire employees. The local government also takes a hit with tax revenue, making it harder to provide social programs for their residents.

In addition to the economic issues that are readily apparent, traffic congestion also leads to a much greater problem — air pollution. Air pollution accounts for millions of deaths per year. In cities with heavy traffic congestion, air pollution is much higher. This can cause problems for residents, putting additional strain on the local healthcare system.

In short, traffic congestion hurts the economy in a variety of ways. The need for greater public transportation has never been greater. Though it may cost the public trillions of dollars in the short-term, it could save even more over the long-term.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes