Ramps, Mikey, Ramps!

Jacob Sullum | August 28, 2009

"Based on the $3.25 billion [in federal stimulus money] already allocated," The New York Times reports, "the city estimates that 30,776 jobs will be created by early 2011." That's a little more than $100,000 per job, a bargain compared to Obama administration estimates indicating that the cost per job "saved or created" will be more than twice that high nationwide. It's rather surprising that jobs would be so much cheaper in New York City, where everything else is more expensive.

It gets better. Last month New York Gov. David Paterson said $33.1 million for highway and bridge repair in the city would yield 794 jobs, or one for every $42,000 spent. The city says replacing ramps leading to a Staten Island ferry terminal will cost $175 million yet produce 5,000 jobs, or one for every $32,000 spent. Then again, the Times notes, "a planned railroad tunnel under the Hudson River, which will cost about 50 times as much, is supposed to produce only about 6,000 construction jobs." That's nearly $1.5 million per job. Apparently ramp repair is more than 45 times as efficient at producing jobs as tunnel building, and six times as efficient as whatever else the federal government is doing with $787 billion in stimulus money. 

Since only 100 to 200 people will be working on the ferry ramp project, how did the city come up with an estimate of 5,000 jobs? State Rep. Michael McMahon (D-Staten Island), a major booster of the project, figures "you get into the hundreds" of jobs once you consider "the ripple effect" from the money the workers spend on lunches and their bosses spend on supplies, but "I don't see how you get thousands." The city says it used a U.S. Transportation Department rule of thumb that says every $1 million spent on a transportation project yields 28 jobs, directly and indirectly. The president's Council of Economic Advisers, by contrast, says 11 is more like it. You can start to see why New York City Comptroller William C. Thompson warned Mayor Michael Bloomberg that "the effort to measure the impact of federal stimulus dollars on local labor markets is, at this point, extremely speculative."

Bear in mind that projecting jobs from discrete transportation projects should be relatively easy. The impact of various direct and indirect subsidies is even more uncertain, especially when you start talking about jobs "saved" as opposed to "created." The Times concludes that "tallying stimulus jobs is not easy in New York," but there's no reason to think it's easier anywhere else. Can we stop pretending these numbers mean anything?

Comments

|8.28.09 @ 11:53AM|#

I'd actually be surprised if they didn't spend more due to cost overruns as politicians pocket funds and ramp supplies "fall off the back of a truck."

|8.28.09 @ 11:54AM|#

Apparently, not everyone in government is happy about the stimulus.

http://www.dailypaul.com/node/104832#comments

|8.28.09 @ 11:54AM|#

Sutdy after study has shown that the mulitplier effect of spending is maybe .9 or lower. Yet, public officials and the dimwitted enabling media continue to claim that every public works project will have a two and three times mulitplier effect on the economy.

jtuf|8.28.09 @ 11:59AM|#

The Hudson River Tunnel project uses one of those Tunnel Boring Machines to speed up the process, reduce labor costs, and keep diggers out of the most dangerous part of the project. That's why it produces so few direct jobs. This highlights the absurdity making jobs creation a goal. If we wanted to just maximize the number of jobs created, we would get rid of the Tunnel Boring Machine along with the jack hammers, construction cranes, and every other motorized construction tool. For that matter building pyramids by hand would be a major job creator.

|8.28.09 @ 12:02PM|#

multiplier multiplies

The more you spend, the more you save.

Since only 100 to 200 people will be working on the ferry ramp project, how did the city come up with an estimate of 5,000 jobs?

Haven't you ever seen a Public Works job site (especially in NYC?)Somebody has to lean on all those shovels.

The Powers That Be|8.28.09 @ 12:02PM|#

Can we stop pretending these numbers mean anything?

No.

|8.28.09 @ 12:20PM|#

Somebody doesn't know jack about the third law of Keynesian Economics.

(Money spent x number of projects)^2 + number of green union jobs ) - non-union merit-based paying jobs = desired result

I had to simplify that so you neogoons at Reason could wrap your small minds around it, but that is pretty much it in a nutshell.

|8.28.09 @ 12:26PM|#

It sounds like they are trying to use the labor theory of value to justify some of these jobs created. Wasn't that debunked a long time ago?

|8.28.09 @ 12:27PM|#

HA! That's some first rate snark Bigbig.

Tonto|8.28.09 @ 12:38PM|#

Can we stop pretending these numbers mean anything?

Who are "we", Kemosabe?

Spartacus|8.28.09 @ 12:40PM|#

big--

I thought that was the third eye of Keynesian economics.

mark|8.28.09 @ 1:03PM|#

Deficits saved the world, Paul Krugman said this morning. Why do you guys love committing planetary treason so much?

|8.28.09 @ 2:01PM|#

Deficits only save the world if they are large enough and they are run up by Democrats.

Note Krugman's comments on Bush deficits:

http://www.pkarchive.org/economy/FA022503.html

I can't believe how smart he is. (Sorry I was channeling my inner New York times reader)

Paul|8.28.09 @ 2:12PM|#

Since only 100 to 200 people will be working on the ferry ramp project, how did the city come up with an estimate of 5,000 jobs?

They use the Mayor Greg Nickels method. You say you want to develop South Lake Union. Then you add up all the possible square footage of new businesses that will rush into the area. Divide that square footage by the number of cubicles you can stuff into it and voila! The number of jobs created.

|8.28.09 @ 5:22PM|#

Thanks for the Krugman links. I made a diary on DKos and am curious to see how they react to his dissonance.

|8.28.09 @ 10:37PM|#

My stepfather owns a company that does a lot of state and town work.
Many of the contracts that were coming down the line have been cancelled. Why?
Because the state and towns are waiting for the stimulus money instead of spending their own...
He may have to lay people off......

Blah|8.29.09 @ 3:08AM|#

That's nothing, I didn't spend a dime today, but I saved four jobs! Really! Don't believe me? You're just a hate-mongering, racist, right-wing astroturfer.