[O]ne of the concerns to keep in mind as we prepare for four years of construction is that any massive government effort, particularly at a time when demand isn’t so depressed, could crowd out private activity. If all the capable skilled labor is being put on government projects (and, thanks to current federal law, paid at prevailing union wages in big cities), there won’t be many people left to build houses and private-sector buildings. Those who are left will command high salaries, which sounds like a good thing but could also discourage private firms from even building at all.As I have often rehearsed here, once upon a time I worked on a documentary film about the Civilian Conservation Corps. The men we interviewed had all served on a CCC project rebuilding Fort Pulaski, a brickwork fortress on the Savannah river very briefly used by Confederate troops (it turned out that the brickwork fortifications, the latest thing going just a few years earlier, were completely outclassed by the new rifled naval guns). They had then served in separate units in WWII. Some of them fought all across North Africa and Europe. Others fought in Italy. One was a prisoner of war for most of the conflict.
As Congress and the president-elect prepare for a big infrastructure push, they would do well to keep these issues in mind. Construction is a highly cyclical industry, and the federal government is preparing to get involved at a time when labor supply is low and private sector demand is rising. To avoid a major shortage, more skilled laborers will have to enter the market.
All of them said the same thing, though: the CCC had been the second best experience of their lives, after being in the war.
Of all of FDR's programs, the CCC was the one that seems to have done the most good. There are many lasting monuments up and down Appalachia. It took a whole generation of young men for whom there was no work and taught them, under Army discipline, the skills they would need to flourish later. It gave them a sense of purpose in the moment, and lasting accomplishment for the rest of their lives.
Such a program would address the concern about the government market crowding out skilled labor from private construction in two ways. First, it would in fact introduce new skilled labor to the market. Second, since it would begin with unskilled laborers, it would not need to pay such high rates as to crowd out private actors. Indeed, the commitment to camp life under military discipline would help ensure that older workers with existing skills remained in the private sector.
As a supporter of the Tenth Amendment, I would prefer this to be done by the states instead of the Federal government, of course. There is no explicit Constitutional authority for such a program in the Constitution, making it properly a state-level responsibility. But that is true for these infrastructure programs in general, however they are done.