The Governor’s optimistic job math
Massachusetts Governor Deval Patrick and House Speaker Salvatore F. DiMasi have stitched together a 10-year $1bn initiative to boost the so-called life-sciences industry in the state. The governor thinks the plan will help create 250,000 jobs while the Speaker hasn’t committed to a number. That seems a tad optimistic. The Bristol Myers Squibb plant in Devens cost the state $64 million in tax credits and infrastructure improvements in exchange for a projected 350 - 1,000 jobs, meaning each job will cost as little as $64,00 or as much as $182,000, while Governor Patrick assumes his plan will create a job for each $4,000 of subsidies. Even if one argues, quite reasonably, that the BMS cost per job count doesn’t take into account economic multiplier effects while the Governor’s headcount does, it seems hard to believe that the plan will deliver - at minimum - more than 15 times the number of jobs per dollar than the BMS subsidy.
If the Patrick-DiMasi plan’s cost per job matches the best case scenario for the BMS deal, we’re looking at less than 16,000 new jobs, excluding multiplier effect (so let’s say 30,000 net, allowing for a pretty generous multiplier). Perhaps the Governor meant 25,000 man-year jobs for ten years, including economic multipliers. That seems doable, although probably not what most people think of when they hear 250,000 new jobs.
October 2006: The Commonwealth’s smoke-and-mirrors on generating economic activity through the state school system.
