High Speed Rail in Taiwan (Image: jiadoldol)

Last week in Vancouver BC, Washington Governor Jay Inslee talked up how “the convenience of a one-hour trip between Vancouver and Seattle would create countless opportunities for people in both B.C. and Washington”. He cited an economic analysis that a high-speed rail link between the two cities could create up to 200,000 jobs and $300 billion in increased economic output annually. Inslee has characterized this as a 20:1 return. How seriously should we take these claims?

The economic analysis, funded by Microsoft and the Washington Building Trades, was prepared as an addendum to a study by WSDOT of HSR costs and ridership. It was released in January, a month after the main report. The analysis estimates 38,000 jobs will be created, directly and indirectly, during construction. More speculatively, the authors claim up to another 160,000 jobs will be created through agglomeration effects, effectively growing the Seattle and Vancouver urban area economies by reducing travel times from outlying cities. While agglomeration effects are a real phenomenon, the size of the claimed effects is preposterous. The reader is asked to believe that about sixty jobs can be created for every daily rider on the train.

Construction and Operations Impacts.

Some jobs are created through construction and operations. The model estimates 38,000 jobs from construction for 10 years. Operations and maintenance adds 3,000 permanent jobs. These numbers include indirect employment as the workers spend their income creating more employment. The model used in the study is unable to separate the direct and indirect effects.

This is a simplistic view of how infrastructure spending works. Economists will point out that multipliers exist only in economies with unemployed resources. If construction workers are already employed, then workers for high speed rail lines can only be hired by taking workers away from other infrastructure and housing construction. Net added employment is much lower.

This strategy of buying infrastructure to create construction jobs can be used to justify paying for anything and doesn’t favor building high speed rail over any other make-work task. It makes more sense to think of construction wages as a cost of building the system. The benefits of rail are the transportation services provided, not the outlays to build the line.

Agglomeration Impacts.

The more remarkable claim of the study is a large agglomeration effect yielding up to 160,000 jobs in Metro Vancouver and Seattle. Agglomeration effects happen as cities grow larger. The expanded labor market creates economies of scale and greater specialization. Better transportation can create agglomeration effects by integrating otherwise distant communities. In this instance, the size of the claimed effect is far out of scale with the forecast ridership on HSR.

The WSDOT study found fully half of HSR ridership between Portland and Vancouver would be Portland-Seattle only. One fourth is Seattle-Vancouver, and the remainder is between intermediate destinations. That profile is consistent with Cascades ridership today. That comes out to roughly 1,000,000 annual riders between Seattle and Vancouver, or about 3,000 riders per day in 2035. The authors of the economic study accept these ridership numbers, and then extrapolate to a claimed economic benefit of 160,000 extra jobs in Seattle and Vancouver.

The model estimates “travel buffers”, the distances commuters may travel of 40 minutes (also 51 minutes for a range of estimates). For example, the station at Bellingham is 14 minutes from Vancouver by HSR maglev service. The calculation adds every town within a 26‐minute drive of Bellingham to the Vancouver base population to calculate the population within a 40-minute buffer.

Even if one wishes away the delays of an international border crossing, it’s a stretch to see cities almost a half hour south of Bellingham as economically part of Vancouver. Bellingham doesn’t become the West End because there’s a fast train. Yet, that’s the calculus of the study. As the authors write: “In 2016, the population of metropolitan Seattle stood at about 3.8 million residents and metropolitan Vancouver stood at about 2.5 million. Greater integration would effectively more than double the Vancouver labor market or increase the Seattle market by 66 percent.

Real urban growth and economic integration requires more than a handful of long-distance commuters. So far leaders on both sides of the border are recognizing this and remain skeptical of Cascadia high-speed rail. Washington and British Columbia together are paying much less than half the suggested cost of a deeper study, and legislators show no interest in funding the $24-$42 billion commitment to build the system.

56 Replies to “High Speed Rail Economic Study Makes Exaggerated Claims”

  1. Weren’t the predicted ridership numbers shown to be false? I remember an article on the STB a few months ago detailing the flaws in the ridership numbers and that the study authors admitted they made a mistake.

    1. @QARider The falsity in the study was in the cost due to a conversion error from $/Kilometer of track to
      $/mile of track. Construction cost.

      I believe the study was also only about people traveling in between the metros. A 10 minute trip between Tacoma-Seattle and Everett-Seattle is probably worth $30 and it would suck up most of the rides on on sounder. Sounder trains could run both ways morning and evenings taking people from lynnwood to Everett or Sumner to Tacoma to catch the HSR to Seattle if the proper Rail to rail transfers were created as well as a travel pass.

      1. To be fair to the authors of the study, the only falsity was a math error around converting miles to km in one chart. There was no credible reason to assume the costs reported in the study were incorrect.

  2. Dan, go to Bellingham on a weekend and see if it’s not ALREADY apart if Vancouver. Bellis Fair Mall and Costco are full of Canadians, and the airport owes much of its success to Canadians flying out of there instead of YVR.

    It leads me to wonder where you get your economic impact expertise…? This opinion feels more like an ideological screed from the Washington Policy Center than a thoughtful analysis.

    As for me, I’m much more willing to wait for further study from REAL experts on the impacts. Because if the economic benefits justify it, I’m all for people having 10-minute trips between Seattle/Tacoma/Everett and hour trips to Vancouver and Portland? Why? Because we don’t think it’s good to spend hours in traffic FOR ANYTHING. If this solves that, then it’s an immense win for our people, our region, our economy, and our quality of life.

    Or we can stand on the sidelines with you, hands in our pockets, watching as everything about mobility gets worse.

    1. Yes, the study that Dan refers to seems to have exaggerated claims about jobs. It is always difficult to find a realistic answer to the economic development effects of a project. A whole ecosystem of “experts” has been formed to justify spending lots of money on projects, particularly stadiums, convention centers and highways. The predictions are usually wrong, but politicians keep hiring them to promote favored projects.

      So, this privately-funded HSR economic study probably falls into that category (of propaganda). But something close to the truth is out there, since HSR has been built in enough countries over enough decades to empirically study the economic impacts that have occurred.

      A more neutral research group would be needed to study actual HSR economic impacts, perhaps a state-funded study prepared by a university research group not known for beign pro- or anti-rail.

    2. I grew up in Bellingham and went to Vancouver more often than I went to Seattle. Especially before 9/11, getting to BC was quick and easy. Plus we could drink in White Rock without being carded. Would’ve been a lot safer to come back by train.

  3. Your hatred for all things rail truly begs the question of why STB continues to allow you to publish on their site. Maybe just write for the Washington Policy Center or MyNorthwest instead?

  4. This is reading far too much into the details studies. I could be wrong, but I’m not sure there’s really any evidence that we can make reliable 30 year predictions, especially 50 year predictions about these things.

    So, I really don’t believe your claim that anything is exaggerated in these studies, any more than I believe the studies themselves.

    Maybe you can flip the bigger question around: imagine an economically well connected Vancouver-Seattle corridor in 50 years. What infrastructure would be in place to make that happen? If it isn’t HSR, then what is it?

    Apologies is this comment sounds grumpy :-)

    1. Maybe you can flip the bigger question around: imagine an economically well connected Vancouver-Seattle corridor in 50 years. What infrastructure would be in place to make that happen? If it isn’t HSR, then what is it?

      That’s a good question, and bigger than the narrow issue of the economic study, but here goes.

      I could flip your question some more and ask why we want to integrate these two cities that have rather little interest in each other. I like to visit Vancouver as much as anybody, but there’s very little economic connection. The WSDOT study pointed out there are more linkedin connections between Seattle and Atlanta than Seattle-Vancouver. (Seattle-Portland is stronger, but still not that strong if you look at the total intercity travel market size).

      So why not view these as three loosely-separated metros rather than as one corridor? Then focus our transit resources on intra-metro travel, with incremental improvements to the inter-metro rail corridors?

      1. Of course the reverse is true as well.

        And LinkedIn connections would be more likely in both countries E/W as businesses are more likely to have an East Coast presence and a West Coast one particularly when only located in one of the two countries (I happen to be with a continent-wide firm and we recently switched from a US/Canada division where Seattle and Atlanta were in the same organization to one where it is now E/W and we work more with our Vancouver office…which to me always made more sense).

  5. A right of way allowing 80mph speeds (maybe upward of 100 in some places), with no or minimal grade crossings would likely be enough. Maximum stops and minimum times for those stops. Vancouver to Portland is just over 300 miles, but 7-9 hours by freeway. Even 62mph average speed including stops would drop that to a 5 hour trip. Good cell phone service, Wi-Fi, business class seats, and phone talking booths would appeal to working professional. Speeds would be fast enough for communters.

    That right of way might even include room for freight on the Seattle to Everett section. A six foot sea level change could really play hobbs with much of that trackage.

    1. But if you’re going to have a right of way allowing continuous 80 mph speeds with no grade crossings in a lot of places you’re going to have to build a new right of way. The existing right of way cannot provide viable intercity speeds.

      And if you’re building a new right of way, why are you limiting it to 80-100 mph?

      These things don’t scale linearly, and a 80 mph new right of way isn’t half as cheap as a 160 mph one.

      1. What Brendan said. Specifically from Seattle to Vancouver, you can’t get viable speed out of the existing right of way.

        (From Seattle to Portland you can, so that’s different)

    2. The state is incrementally upgrading Cascades to support 90 mph and eventually 110 mph (it’s currently 79 mph with many slower zones), so we’ll get that even without this bullet train, if the legislature consistently funds it (which it has been spotty about). And the state could even buy the BNSF track and prioritize passenger rail on it, and consolidate freight to the UP track. It hasn’t been interested in this, but it’s something it could do if it wants to spend a few billion dollars. I think 90-110 mph is enough: the biggest need is more frequent trains and full-time metrpolitan service (i.e., commuter rail). (Whether BC upgrades its track is out of our control.) But if you want to build 160 mph high-speed rail you’d need a new right of way, and that means buying all the land along it.

      1. Discussing train speed, we need some idea how much track length is required for both smooth stops and acceleration.

        Might be final authority on how many stations we have. Also, whether we’ll need two separate sets of tracks, one mainly for speed, the other mainly for intermediate stations.

        Some interesting little-known Philadelphia history. Forty years ago, I rode on the original cars, which look like PCC streetcars- don’t they? Designed in a home-made wind tunnel at University of Michigan in the 1930’s. Made for both speed and a lot of stops.

        If memory serves, a lot of getting used to. But great ride! Worth threatening to build between IDS and Sea-Tac. Feed it to Seattle Times. Massive public approval won’t sit easy in many quarters including the legal department, but life isn’t fair.

        http://www.philadelphiatransitvehicles.info/interurban.php

        https://en.wikipedia.org/wiki/Norristown_High_Speed_Line

        But also, forever at the back of my mind now: Over grade crossing #1, maximum speed 30 mph. Which let red and white Tacoma Railway freights make it to Olympia at exactly same pace as legislation.

        Anybody crying about it, suck up the extra-what five minutes?-it’ll take to get Talgo across the Nisqually. Long as BN rents out track but not a railroad, time lost to fossil fuel trains will make ten miles at forty look like warp speed.

        Fact that it was budgeted out of existence after being identified as dangerous probably has ST and BN legal departments getting that curve straightened out by kerosene lanterns under the light of tonight’s moon.

        This afternoon’s Executive Briefing:

        https://www.youtube.com/watch?v=_t-kwIKluRg

        And instructional video showing correct speed for both track-work and trains between Lakewood and the Nisqually River. See if you can identify the Sound Transit Executive Committee members:

        https://www.youtube.com/watch?v=kZH9JtPBq7k

        So lay off, Seattle Times and State Legislature. Let’s see you really straighten out the Agency, this time with correct tools. Like your not very distant forebears could, which is why so may of them were in the Industrial Workers of the World (IWW), answering pre-election polls by painting black cats on the smoking ruins of mills and factories that mistreated their workers.

        Bet they even supported streetcars and Public Option health care.

        Mark

  6. Hopefully rail travel will gain from the process, regardless of the final study results. Either a new super-fast system looks appealing and we chase that, or it makes Cascades improvements look more efficient and all this enthusiasm is directed there. I do wonder how much of the study will consider a scenario of Cascades improvements versus do-nothing and various other new systems. It’s a decent-sized research budget, so I hope to see all of that considered, rather than another iteration of studies.

    1. That would be great. They have made some gestures for fallback options, but not enough to make me reassured yet. Ideally the state would consider Cascades as essential as I-5 and invest in it thusly, as other countries do. And address the east-west corridor. Earlier legislatures did go partway and set up Cascades’ long-term plan, and studied east-west and commuter corridors (e.g., Auburn-Maple Valley, Everett-Bellingham). But then came the Eyman tax-cutting, anti-transit era in 2000 and all that has slowed, although it hasn’t stopped. This renaissance of high-speed rail is being pushed by the business leaders, and the legislature has become slightly more open to transit infrastructure again. But the core of this push is for high-end business travelers, and it has yet to broaden into a comprehensive volkstransit for the widest cross-section of the state’s transit needs. But hopefully it will evolve into that as you say. I’m not categorically against HSR; I just want to see people’s everyday transit needs and urban transit needs addressed too.

  7. “Self-described recovering economist looking at study makes exaggerated claims.” Fixed the title for you.

  8. So, if I follow the author’s argument correctly, Dan doubts that 160k jobs could be created because most every body able to work is already employed. That doubt would have to be based on further assumptions, (1) no in-migration, (2) no natural population growth, birth v. death over the 20 year cycle to get this planned/built, (3) no loss of present jobs from further robot/AI automation freeing workers to take these 160k new jobs, (4) no value in upgrading workers to these more economically valuable 160k jobs from present day low value work.

    1. I’m afraid you didn’t follow the argument’s author correctly. It is much simpler than that — he even put it in bold. It is absurd to think that about sixty jobs can be created for every daily rider on the train.

    2. That’s for temporary construction jobs. We are at full employment for construction: buildings are being delayed because they can’t find enough construction workers. That’s what happens when you have twenty-three cranes downtown in addition to Bellevue’s growth and the other neighborhoods and suburbs. Sound Transit also has the rail workers busy for the next twenty-five years. Dan made a leap in assuming that zero workers would be available, but the number is low even if it’s not totally zero. (And we don’t even have a construction date yet, do we? That would affect how it relates to other projects.)

      The 3,000 permanent operations/maintenance jobs is a small number compared to a 4 million metro population and 6 million state population, so it won’t affect the economy much.

      The other indirect jobs, well, the population will increase anyway as long as the tech/trade/aviation boom holds, plus increasing climate refugees, and political refugees from red states, and immigration and babies. All that will happen with our without this rail line. The impact of robots is unknown: some say it will cause mass unemployment, others that it will create new jobs. What we should do is increase the social safety net and explore a universal basic income, not just for a future robot revolution but for the current inequality and desperation we’re neglecting now. If this rail line succeeds, it will shorten travel times for intercity travelers and exurban commuters. That may create jobs, or it may just enable people to live further out. I suspect mostly the latter. 160,000 jobs is three times the size of UW, four times the size of Amazon-Seattle, and probably close to Boeing. Do you really think this rail line will create that many more jobs compared to the no-build option? I have a hard time believing that.

  9. The same argument about infrastructure being good because of the construction jobs has been used time and time again to justify highways. I’ve always found it B.S. Although any speed rail construction would be such a long term project that whether or not we’re in full employment today is largely irrelevant. Between start and finish, the economy will undergo multiple booms and busts.

    1. Bend, Oregon and Los Vegas experienced this. A home-construction boom started and it improved the economy, but it evolved into a circular home-construction economy: people were coming to build homes but not enough people were coming just to buy homes and live in them, so they were hit hard in the 2008 crash when construction stopped. (And my relatives in Nevada say construction had already stopped earlier in 2006.)

      The purpose of infrastructure is for whatever the infrastructure is supposed to do, not for construction jobs. If we just want to pay the builders, why not give them a grant and tell them they have to spend it within a year? Then we can skip useless/harmful infrastructure and focus on what good infrastructure we need.

  10. The study seems to be starting from the wrong direction.

    In 1980 there was a traffic jam in France that reached 109 miles long, indicating how bad auto traffic had gotten. The TGV was a solution that was part of an overall effort to do something other than build roads. The original TGV route went from Paris to Lyon because that would have the most impact. TGV trains from there spread out in several directions serving a number of other cities.

    If the goal of this proposal is to reduce road traffic, then the question that needs to be asked is “What would reduce road traffic?”

    Rather than a Portland to Vancouver high speed line, you very well might wind up with something quite a bit different, such as a Castle Rock – Puyallup route that cuts out the slow spot climbing the Willapa Hills ridge south of Chehalis, and allows conventional passenger trains to run from Aberdeen to Seattle in a much faster fashion than would be possible if they were operating today. The TGV spends a bunch of time on conventional lines even now, so it doesn’t seem to me that a study aimed at reducing car traffic would put new lines in cities since that is the most expensive with least benefit location. Also, with the considerable sprawl the region has, a single line isn’t going to reach as many people as, say, a network aimed at reaching a larger geographic area with something that could use high speed lines and conventional lines.

    1. Glenn, right way to take care of road congestion is to give people a choice about getting stuck in it.

      Mark

  11. Why does it have to “create” jobs? I don’t get that, its an oxymoron and a tired old line. Demand for labor is tied to population growth is it not? If High Speed Rail links in PNW encourage population growth… you finish the sentence.

  12. Ian, you are spot on! It could build a much more dynamic transportation system that saves people enormous amounts of time.

    1. In that same vane it might be an easier sell to build a high speed rail line in two phase one from Olympia to
      Everett and dynamically integrate it with light rail, Sounder train, BRT and bus transfers. Then build the second phase to Vancouver to Portland that way people traveling long distance might be more inticed to use the HSR knowing they would be able to get anywhere they wanted on public transit.

      1. Spot on – focus on building HSR within “greater Seattle” first, as that will drive the most daily ridership. Extending it to Portland and Vancouver should be a secondary goal.

        But it’s really 4 phase. It’s much easier to upgrade existing ROW between Olympia and Seattle. Between Seattle and Everett, any line that wants to be remotely like HSR will need completely new ROW, there simply isn’t a freight corridor that will work. And then Portland-Olympia and Everett(ish)-Vancouver are also very different projects.

      2. What AJ said. Seattle-Olympia is a viable and coherent project (Troy Serad has laid out a VERY good plan). Seattle-Everett is a very expensive project requiring brand new right-of-way. Portland-Olympia is a viable but big project. Everett-Vancouver is big but mostly requires the support of Canada which has not been forthcoming.

      1. No, I meant low spot, as in it’s the lowest place to cross over the hills. I agree it is the highest spot between Seattle and Portland, obviously.

        Glenn was implying there could be a better way from Castle Rock to Puyallup by avoiding the Napavine hill. But, it’s the lowest place that the tracks can go. Anywhere east/west and the incline would be higher.

      2. Height doesn’t matter as much if you are after speed, but the long, winding ascent needed by freight trains over the same hill does. TGV is 3% or more in a few places where they had no choice. Freight main lines are kept to the minimum possible, and that means contouring them to a more complex shape.

        If money does become available though, there is always the option of a Willapa Hills Base Tunnel or something like that, but I doubt that expense would ever prove economical. A steeper but straighter and faster surface line would probably be enough.

      3. Certainly to diagonal to Puyallup would require going through some pretty big hills. And of course it would omit Tacoma.

        I’ve always wondered why the NP didn’t go a bit farther up the Cowlitz and through the sag about four miles east of the Highway 12 interchange. It would obviously have been a few miles longer but that’s sometimes good for freight. Basically follow the Jackson Highway through Mary’s Corner.

      4. A variant of your idea that starts farther north might work. Puyallup south to Orting, diagonal up the hill where the Kapowsin Highway exits the valley, diagonal south of Graham to Yelm and then follow the old NP
        to just north of Centralia. That would cut off a bit of distance, though not much, and avoid the Fort, I-5 and the Nisqually River gorge. Of course it would put the “Pierce County Station” far from downtown Tacoma and miss Olympia completely. But it would be fast, reasonably flat and not disrupt too much.

      5. “Height doesn’t matter as much if you are after speed, but the long, winding ascent needed by freight trains over the same hill does.”

        Seriously, look at a map. The rail line from Castle Rock through Winlock, Napavine, Chehalis, Centralia is about as a straight as they come.

        Are thinking of a different spot, maybe?

      6. Sorry, I should acknowledge that there are a few corners, but that’s because the line was designed to go through all the small towns. It’s certainly not “winding” like going over a mountain pass or anything. If you ignore those towns you can definitely get a straighter line, but that would only require moving a mile or two to the east (see Richard’s comment about Mary’s Corner), or even just buying some empty pasture near the current line around Winlock and Napavine to straighten out the corners.

      7. A line that goes between Seattle and Portland that doesn’t serve Tacoma or Olympia is a line that’s not worth building.

  13. It’s just projections math!

    It’s common for economists to say that any new job induces 1.5 to two more jobs in a local economy.

    I’ve never put much credence in any regional economic impact study. There are too many tradeoffs that usually get ignored. They are usually approached narrowly, and don’t adequately consider that it’s mostly a mere mode or a local destination shift — and not an entirely new, value-added benefit for the region.

    It’s true that construction jobs are beneficial in a recession. It’s true that faster travel induces more intra-regional activity. Still, I can’t see a HSR project being attribuable to a regional economic increase of this magnitude, especially since our busiest regional international airport is summarily ignored in most alternatives.

  14. The interesting part about the HSR is when Seattle, Portland and Vancouver start viewing the Cascadia as a region and start actively working together. The way Seattle and Bellevue submitted a bid to keep amazon in washington or the way port of tacoma and the port of seattle became the NW seaport alliance and stopped undercutting each other. The Seattle Transit Blog might have to change it name to the Cascadia Transit Blog.

    1. I think this is one of the most important points here. The sooner we can stop with the imaginary lines at the Columbia River and at the 49th Parallel, then the sooner all of Cascadia will start thriving more than it already is. Too many issues, and transportation being ine of the most obvious ones, would be much more effective if dealt with at the regional level rather than at state/provincial levels.

      1. As pointed out above, Vancouver and Seattle have fewer LinkedIn connections between each other them do Seattle and Atlanta. Portland and Seattle have fewer connections then we expect by distance. These are just three cities that are kind of near each other, so supraregional transport policy wouldn’t really be of use.

      2. In the 1990s there was a lot of momentum for “Cascadia”; it was the era of the end of history and the apparent decreasing relevance of national borders and governments. But the US federal reaction to 9/11 reversed a lot of this, making crossing the border more cumbersome, slower, and anxiety-prone (because you never know whether you’ll be allowed through or whether you’ll end up stuck on the other side). Plus the US media was so full of domestic news and barely mentioned Canada that people would forget it. Seattle still has some ties — CBC is available in some households, KVOS has Canadian ads, there’s some interest in hockey here, and Canadian visitors come down — but south of the border states this falls to almost zero. So those who were inclined toward Cascadia and integration just gave up and considered it not essential enough or worthwhile enough. Bellingham down to Bellis Fair still has a lot of Canadian interaction and influence, but it diminishes a lot when you get to Everett and Seattle. It’s something like San Diego. San Diego is ten miles from the border and part of it is right on the border, but while there’s NAFTA business trade and shopping and tourist travelers, for a large part of San Diego life Mexico doesn’t really exist or has little relevance. We could wish more of a “one city, two countries” atmosphere but we’re a long, long way away from it, and maybe it doesn’t matter. Why do we need to be more integrated with Vancouver than the minor integration we have with Portland?

  15. Dan, there are places inside the city lines of both New York and Los Angeles more than half an hour apart, aren’t there? But the main thing this whole discussion is leaving out is that like with any street or highway system, the benefits don’t really start to show until there starts to be a network.

    Interstate highway system, very good example. Suggestion: if we can’t build, at least cost/benefit three shorter lines- and then calculate. My guess is that when some connecting lines are built-Swedish term for these connector translates exactly to “Link”-growth might go exponential. Think about it.

    Mark Dublin

  16. I tend to agree with Dan. As much as I love being on a train, when my wife and I go up to Central Puget Sound we almost always drive. It’s a bit less expensive with gas now and we need to go to the boonies in Kitsap County to maintain her family’s vacation home. Kitsap Transit goes no nearer than seven miles from Hansville.

    For one person it makes sense to train (or Bolt!). It’s about break-even for two. For a family it’s a splurge.

  17. Thanks Dan for calling this out. Rhetoric that starts with assumptions like “A six foot sea level change” are all too common when attempting to justify public spending. When making comparisons to foreign countries it would be more appropriate to compare the USA to Australia than Western Europe. Most of the US resembles Ukraine more than Germany.

    1. Um… a six foot sea level change is *guaranteed*. That’s an entirely reasonable assumption.

      Most of the US does resemble Australia… but Australia’s got way better trains than most of the US!

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