When will we pay for replacing our infrastructure?

One of the tricky aspects to thinking about improving the Kanawha Valley’s water system is the question of who will pay for it. WV American Water’s standard excuse for not investing in an alternative intake or upgrading its old pipes (with their 38% leakage rate) is that people won’t be willing to pay for it.

Underinvestment in infrastructure is a problem nationally. The Environmental Protection Agency estimates that water infrastructure is replaced at a rate of 0.5% per year. At that rate, a given pipe is replaced every 200 years. Most pipes are only designed to last 50 to 100 years.

By putting off infrastructure replacement, we are racking up a higher bill for the future. This video presentation (starting at about 12:30) from the head of the DC Water and Sewer Authority talks about what it takes to increase the rate of water infrastructure replacement in DC. In three years, DC has tripled the infrastructure replacement rate, and water bills have approximately doubled. The DC Water and Sewer Authority is projecting water rates increasing faster than inflation for the next 20 years.

Why does it feel like we are unable to pay for what is needed to maintain our infrastructure?

Part of the problem here, as I’ve mentioned before, is that a lot of public federal funding for infrastructure has dried up over the past several decades, meaning that more of this investment is directly borne by water customers.

Another problem is more systemic to our economy. As this graph shows, real wages in the US have been basically flat since the 1970s, even while productivity has risen. In order to enjoy a rising standard of living without real wage growth, several things have happened – people generally work longer hours, more women work, and households have gone increasingly into debt.
productivity_wages
Letting infrastructure investment slide, putting it off to the future, is another strategy that we have collectively pursued to mask the fact that real wages haven’t gone up in forty years.

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