Shovel Ready: What It Means, How It Works, and Its History
The term “shovel ready” has gained prominence in the world of construction and public policy, often used to describe a project that’s fully prepared to begin once funding is secured. But what exactly does it mean, and how did this term come to be a cornerstone of discussions around infrastructure, economic recovery, and employment?
What Does “Shovel Ready” Mean?
A shovel ready project is one that is at an advanced enough stage of planning and preparation that construction can start in the near future. The phrase suggests that critical elements like design, permits, and environmental reviews have been completed, and that laborers and equipment can be mobilized quickly once the necessary funding is in place.
Shovel ready projects are often brought up in discussions of public infrastructure investment, where the goal is to have a quick and tangible impact on employment and the economy. By getting construction workers back to work on projects like roads, bridges, and other public assets, shovel ready initiatives can stimulate the local economy and generate consumer spending.
Key Characteristics of Shovel Ready Projects:
- Advanced Planning: The project has undergone significant planning and is ready for immediate implementation.
- Permits in Place: All necessary approvals and permits have been obtained.
- Immediate Employment Impact: These projects are positioned to create jobs quickly once funding is available.
- Short Lead Time: Building can begin shortly after funding is secured, usually within a few months.
The Economic Importance of Shovel Ready Projects
Shovel ready projects are typically discussed in the context of government stimulus programs. Public infrastructure investment is a tried-and-true method for combating recessions and boosting economic activity. By channeling funds into shovel ready projects, the government aims to create immediate employment opportunities for the unemployed, particularly in sectors hit hard by economic downturns.
The belief is that government spending on large infrastructure projects has a ripple effect: construction jobs are created, leading to more disposable income for workers, which in turn boosts consumer spending and spurs further economic growth. This model became a key component of anti-recessionary fiscal policies, particularly during the 2008 financial crisis.
The History of Shovel Ready: A Controversial Past
While the concept of shovel ready projects sounds promising, its implementation hasn’t always lived up to expectations. The term gained prominence during the Great Recession of the late 2000s, particularly under the American Recovery and Reinvestment Act of 2009 (ARRA), which allocated billions of dollars to infrastructure projects to stimulate the economy.
However, many of the projects labeled as shovel ready turned out to be anything but. Critics pointed out that while the term suggested immediate action, many of the projects took far longer to get off the ground than initially advertised. What was called “shovel ready” often involved an additional six months to several years of planning before actual construction could begin.
For instance, Harvard economist Martin Feldstein famously calculated that each job created under President Obama’s American Jobs Act would cost taxpayers around $200,000. This figure, though not disputed by the government, sparked criticism that the program lacked the efficiency and ROI that proponents had promised.
Special Considerations: The Flexible Definition of “Shovel Ready”
Despite its widespread use, shovel ready is not a standardized term. While the inclusion of the word “shovel” suggests construction is imminent, different states and agencies have their own interpretations of when a project reaches this stage.
For instance, under ARRA, a project was considered shovel ready if it was poised to begin within 90 days. However, certification programs vary by state, so what is considered shovel ready in one region might not meet the same criteria elsewhere.
This flexibility has led to some confusion and, at times, misuse of the term. In the rush to get projects approved for stimulus funding, many projects were labeled as shovel ready prematurely, leading to delays and inefficiencies in achieving the desired economic impact.
Shovel Ready in Modern Infrastructure
While shovel ready remains a powerful concept in discussions about infrastructure and economic recovery, it’s clear that its implementation requires careful oversight. The phrase has become somewhat controversial, as its promise of immediate impact on employment and the economy is often complicated by the realities of construction planning and permitting.
For policymakers and stakeholders, ensuring that shovel ready projects are truly ready for construction is essential to maximizing the economic benefits of public infrastructure investment. When done correctly, these projects can deliver jobs, economic growth, and essential public assets that serve communities for generations.
Understanding the complexities behind shovel ready projects is critical for ensuring that future infrastructure investments are both timely and impactful. While the term has its pitfalls, it continues to play a significant role in shaping public policy and economic strategy.