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There’s nothing like a rosy job creation estimate to light up the Truth-O-Meter.
Agencies regularly talk up these figures to show projects with big price tags have major benefits. Readers regularly wonder whether they’re true.
Recently, a reader asked us to look into this projection for the Northwest Corridor project, which will add and change lanes on I-75 and I-575 in Cobb and Cherokee counties:
"The Northwest Corridor -- a $96 million project with a projected $1.5 billion in positive economic impact -- is expected to create over 9,700 jobs statewide and provide immense benefits to metro Atlanta, the state of Georgia, and the southeastern United States," a July 19 press release from the Georgia Department of Transportation read.
GDOT issued the press release to trumpet that the state was invited to apply for a special U.S. Department of Transportation-sponsored loan that could lower the cost of the project.
More than 9,700 jobs statewide? Is that true?
A GDOT spokeswoman referred us to an April 2010 report issued by the Fiscal Research Center of Georgia State University’s Andrew Young School of Policy Studies.
According to estimates from a GDOT consultant, the state will spend $922 million statewide on the project. Construction will create more than 5,225 "person-years of full-time equivalent employment" across Georgia.
What’s a "person-year of full-time equivalent employment," you ask?
We interviewed John Matthews, who was a senior research associate with GSU when he served as the study’s lead author. He told us this measure is one we’ve encountered before -- "job years."
"Job years" do not represent the number of people the project will employ. PolitiFact Georgia researched this measure on a story about the Atlanta streetcar project, which will build a line downtown.
Economists use the "job years" measure to help them account for the employee churn that takes place during complex projects. Different phases require workers with different expertise. Early on, it might need concrete experts. Later, it will need ones that can install road signs or toll booths.
Some jobs may last days. Others could last years. Some might require part-timers, while others need full-timers.
The "full-time equivalent" measure counts a single position as a bundle of workers who, when you add up their hours, work what amounts to full-time. It could be a single person who works 40 hours a week or, say, four workers who put in 10 hours each.
One "person-year of full-time equivalent employment," or one "job year," is one year’s worth of work by a full-time equivalent.
We ruled the Atlanta streetcar jobs figures False. Although the construction figures were close to the mark, the claim that it will take an estimated 460 jobs to run the streetcar was inflated. In fact, it would take 23 positions to run the streetcar over 20 years. Their jobs figure was 20 times too high.
Now, back to the Northwest Corridor. Construction takes place over four years, so a single job that lasts four years counts as four job years. This means that if all workers stay on for all four years, the actual number of people employed would be one quarter of GDOT’s 5,200 estimate.
But if workers come and go as they do in a more typical construction project, the number could be higher. Let’s say it takes one worker nine months to finish the job of pouring concrete. He leaves, and another joins for three months to paint stripes on the road. Bundled together, these two workers equal a single job year.
Now, GDOT says that the project was estimated to create some 9,700 jobs, not 5,200 jobs. The rest come from "indirect" and "induced" economic impacts.
Indirect jobs are the result of spending on materials for the project, such as steel or rebar. Induced jobs are created when workers use their wages to buy a cheeseburger or a Lady Gaga album.
Add these job years to the construction ones and you get about 9,700 -- the figure GDOT used.
How do we rule?
The typical person thinks of "jobs" as actual positions or hires, not job years, indirect jobs or induced jobs. So when GDOT announces that their project creates about 9,700 jobs, they’re giving voters an inflated sense of the actual projections.
GDOT could have said the Northwest Corridor project is expected to create what amounts to 5,225 full-time jobs across Georgia over four years, plus an additional 4,480 with the increased spending the project creates.
Or they could say construction is expected to created the equivalent of 1,190 full-time jobs in the first year, for a total of 5,225 over four years.
None of these descriptions are as succinct as GDOT’s claim that that the Northwest Corridor highway project "is expected to create over 9,700 jobs statewide." But they do give a more complete sense of Georgia State’s actual projection.
GDOT’s jobs figure is based on legitimate, commonly-used economic measures, but the agency presents the data in a misleading way. Their press release makes non-experts think thousands more people will find full-time construction work than actual estimates suggest.
We therefore rule GDOT’s jobs claim False.
Georgia Department of Transportation, "Ga. Among 8 States Selected to Apply for TIFIA Loan," July 19, 2011
PolitiFact Georgia, "Atlanta Streetcar Projected to be Jobs Boon," March 16, 2011
Georgia State University, Andrew Young School of Policy Studies, Fiscal Research Center, "The Economic Impact of the Northwest Corridor P3 Project," April 2010
Interview, John Matthews, former Senior Research Associate, Fiscal Research Center, Andrew Young School of Policy Studies, Georgia State University, Aug. 2, 2011
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