Replacing all of the state’s lead service lines could create up to 224,500 jobs and $23 billion in additional economic activity
By Justin Williams and Tara Jagadeesh, MPC Research Assistant - January 6, 2021
Although weekly unemployment claims have declined since Illinois hit a staggering high of 1.7 million claims in May, economists warn that permanent layoffs may be more imminent as businesses struggle to stay afloat amidst the ongoing pandemic. Economic recovery will certainly be a years-long process--and one place to look for stable, good-paying jobs is infrastructure investment.
At the beginning of the pandemic, MPC outlined how investing in water infrastructure could benefit both people and the economy, plus address Illinois’ dire water infrastructure needs. A major opportunity is lead service line replacement. Service lines bring water into our homes and other properties from a utility’s water main, and for decades a primary material used for these lines was lead. Since the 1980s, the installation of lead service lines has been prohibited because lead from the service lines has potential to leach into our drinking water, and we know it isn’t safe to consume any amount of lead. However, in Illinois and nationwide, most lead service lines remain--and Illinois has the dubious distinction of having more lead service lines than any other state.
Although replacing all of these lines would be a costly endeavor, this investment could go a long way toward boosting the economy. Replacement can not only provide much-needed jobs but also help to prevent another public health problem, particularly in Black and Brown communities that have borne the brunt of both lead service lines and 2020’s economic hardships.
Just how far could replacing all of Illinois’ lead service lines take us? Based on our analysis, replacing all of the state’s lead service lines could create from 87,841 to 224,500 jobs, and result in an additional $9 billion to $23 billion in economic activity. Annually, that’s 4,392 to 11,225 jobs, and an additional $450 million to $1.15 billion (on a 20-year timeline).
Annually, that's 4,392 to 11,225 jobs, and an additional $450 million to $1.15 billion (on a 20-year timeline).
Costs and economic benefits of lead service line replacement
Let’s face it, replacing all of Illinois’ 636,000-plus lead service lines is going to cost a lot of money: By our estimate, somewhere between $5.5 billion and $14 billion dollars (keep reading for details on how we got that number.) Why the big range? That has everything to do with what we don’t know about lead service lines in Illinois. As of 2018, the state had 686,259 known lead service lines and 1,067,649 lines composed of an unknown material. The lower end of these economic estimates thus represents the benefits of replacing all of Illinois’ known lead service lines, while the higher end covers the possibility that all of those unknown lines are also made of lead.
Would such a huge investment be worth it? Some quick math derived from existing research suggests that the answer is “yes.”
As you can see, this investment could generate a substantial number of jobs and economic output every year--specifically, some 4,392 to 11,225 jobs and an additional $450 million to $1.15 billion annually.
Let’s put that in context: 11,000 jobs is approximately 2.4 percent of Illinois' unemployed population as of August 2020. So lead service line replacement could create enough jobs to take a meaningful bite out of Illinois’ unemployment. Of course, lead service line replacement can't solve unemployment completely or forever, but it could provide employment for up to 1 in 42 unemployed people in the state.
Of course, because unemployment numbers and lead service line numbers vary from place to place in Illinois, so too does the possible effect on unemployment. To get a better sense of how replacing lead service lines could affect unemployment across Illinois, we broke down our analysis to the county level. We used U.S. Bureau of Labor Statistics reports on monthly unemployment rates by county, pulling the most recent data--August 2020. Then we looked at how these rates might change if all potential lead service lines were replaced and local residents were employed by replacement efforts.
As you can see from the map above, lead service line replacement could benefit counties statewide. For example, Hamilton County in the far southern part of the state could see job creation sufficient to employ up to 6.5 percent of its unemployed population. Central Illinois’ Champaign County, meanwhile, could see enough jobs created to employ up to 4.5 percent of its unemployed population--a significant benefit for a county with 97,385 unemployed as of August.
Our methods for analyzing the economic benefits of lead service line replacement
To come up with these estimates, we first considered the cost of replacing a single lead service line. This number varies depending on water utility, age of system, length of line, and other factors. Lansing, Michigan, for example, was able to reduce their costs to $3,500 per line by strategically coordinating lead service line replacement with other water infrastructure projects. Meanwhile, the City of Chicago’s new Lead Service Line Replacement Program estimates a very high replacement cost of $15,000 to $26,000 per line. Based on an informal survey of lead service replacement line programs across the country, however, costs average out to $7,500 per line [1]. For our calculations, we decided to go with an assumed cost of $8,000 per line replaced.
By multiplying the number of known or potential lead service lines by this upfront cost, we found that replacing all lead lines would lead to an investment of $5.5 billion to $14 billion.
Replacing all lead lines would lead to an investment of $5.5 billion to $14 billion.
We then turned to some existing analyses of the economic benefits of water infrastructure investment. The Water Research Foundation and Water Environment Research Foundation calculates that $1 billion in water infrastructure investment generates $1.64 billion in economic activity and creates 16,000 jobs--an excellent return on investment. Using these numbers, we were able to calculate just how well lead service line replacement could pay off and help get people back on their feet.
There are, of course, limits to this analysis. For one, we’re using numbers from existing models, not original input-output modelling. This means that we’re relying on models that will not map exactly onto the specific workforce needs and limits of Illinois’ lead service line replacement.
Still, whatever the precise economic output owing to lead service line replacement, it’s important to recognize that lead service line replacement is an investment. And like any investment worth making, it will yield multiple benefits to the state -- economic, health, and racial equity among them.
How to ensure lead service line replacement pays off
While replacing the state’s lead service lines could help relieve unemployment, more spending doesn’t automatically mean more stable, long-term employment opportunities. Any infrastructure investment, be it via a state lead service line replacement bill or a federal COVID-19 infrastructure stimulus plan, needs to be designed carefully in order to have the greatest impact. New jobs must consider a range of skills, connect workers to training and apprenticeships, and allow for workforce development.
We must also consider who might benefit, and ensure that any investment program reaches those who need it most. Unsurprisingly, some groups of people are at greater risk for losing their jobs due to COVID-19 layoffs than others. The Pew Research Center found that Hispanic women, immigrants, young adults, and those without a college education are most likely to have lost their jobs. Inequities in COVID-related job losses might stack on top of existing unemployment inequities, too. While unemployment rates have historically declined over time in Illinois, a large gap remains between Black and white residents. According to a report by the Economic Policy Institute, Illinois was among the top three states with the highest unemployment rate for Black residents--with the Black unemployment rate being nearly twice that of the white unemployment rate. Investing in lead service line replacement could help to reduce these unemployment gaps, but only if carefully designed to connect new opportunities with those who need them the most.
MPC and our partners are advocating for a bill that addresses these workforce issues while ensuring the replacement of all the state’s lead service lines. Importantly, we’re advocating for provisions to connect people of color and other marginalized Illinois residents to jobs created by this infrastructure project. How? By ensuring that funding created by the bill would be placed into the Clean Water Workforce Pipeline Fund, a state fund and program created by Illinois Public Act 101-0576, created in 2019.
As state, local, and federal governments discuss how best to provide relief for people and the economy, they should consider the opportunity that investment in water infrastructure presents. Lead service lines present a clear and present public health threat for communities across both Illinois and other states. Addressing these infrastructure needs would not only prevent future health crises but also contribute to recovery from a year that’s posed serious economic hardships for many Americans.