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Wednesday, October 13, 2010

Why the convention centre sucks, part 2

The jobs lie: "person years" become "jobs," and stupid, lazy or complicit editorialists repeat the untruth

Posted By on Wed, Oct 13, 2010 at 7:04 PM

Convention centre supporters are consistently touting about the job-creation potential of the proposed convention centre.

"A new convention centre could result in as many as 12,000 new jobs," says Infrastructure minister Bill Estabrooks.

"A shadow bid prepared by Deloitte...estimates the project will add $893 million to economic output, $171 million in taxes and 28,000 jobs over 10 years," editorializes the Chronicle-Herald.

"The province says it estimates the centre would create about 12,000 jobs," editorializes the Pictou News.

"Building a $159-million, 115,000-square-foot convention centre, for example, will... create 28,000 jobs over 10 years," writes Chronicle-Herald business columnist Roger Taylor.

If there's confusion over the number of jobs that supposedly will be created by this convention centre---which is it, 12,000 or 28,000?---Trade Centre Limited is to blame.

TCL, the crown corporation that will run the proposed convention centre, throws out these numbers in its recap of "projected economic benefits" on the website it maintains devoted to the proposal:

• When compared to the current WTCC, it is estimated that Nova Scotia will gain over $79 million in provincial and federal tax dollars ($40 million provincial; $39 million Federal) and over 12,000 jobs in just 10 years of operating a new convention centre.

• Overall construction impacts are estimated to be approximately 1,700 jobs, and over $19 million in provincial and federal taxes ($9.5 million provincial; $9.5 million federal).

• Ten year total impacts from operations and maintenance, and from delegate and event planner spending are estimated to be over 27,000 jobs and over $170 million in provincial and federal taxes ($85 million provincial; $85 million federal).
[emphasis added]

So, lazy editorial writers and business columnists have evidently latched onto these numbers and simply repeated them---12,000 jobs if they only made it to the first paragraph, 28,000 jobs if they went so far as to add paragraph #2 to paragraph #3. But none of these writers showed the slightest bit of curiosity, nor inquisitiveness nor, god forbid, cynicism, and so none asked, "Where did Trade Centre Limited get these numbers?"

Had they taken the arduous step of actually clicking through the website link to the economic impact study that Trade Centre Limited itself claims is the basis of the 12,000 and "over 27,000" jobs figures, they would've discovered that the numbers are complete and utter bullshit.

Since the firm Gardner-Pinfold was hired by TCL to look at the potential economic impact from the new convention centre, their numbers are already suspect---there's a huge potential conflict of interest, because Gardner-Pinfold was paid by the group that stands to benefit most directly from building the new convention centre. Nonetheless, Gardner-Pinfold's numbers don't say what TCL says they say, and therefore the numbers don't say what the lazy editorial writers say they say.

This isn't rocket science. Read Gardner-Pinfold's report yourself. On the very first page, in the Executive Summary, second paragraph, it says quite plainly:

The impact simulations provide results in terms of employment (person years)
Got that? Person-years, not jobs. A person-year is a job that could be filled by one person working full-time one year. Could be two people working half-time for one year, or four people each working just five hours a week for two years.

Through the report, Gardner-Pinfold makes this point abundantly clear:

A total of 27,507 person years of employment (direct plus spin-off employment) for the province as a whole and 23,276 person years for HRM over the 10-year period. On an annual basis, this represents an average of 2,751 person years of employment (direct plus spin-off employment) for the province as a whole and 2,327 person years of employment for HRM over this same period.
So again: 27,507 person years of employment does not equal 28,000 jobs, even through the miracle of rounding. As Gardner-Pinfold itself says, "On an annual basis, this represents an average of 2,751 person years of employment."

So, at best, using the probably overblown numbers of the consultant hired by TCL itself, the new convention centre and all the supposed "spinoff activity" caused by it (that is, that each and every conventioneer who they say will show up spends a whopping $1,600 while here and that money will flow through the economy, giving work to hotel maids and tour guides everywhere in the province) will create---assuming they're full-time jobs (more on this below)--- 2,751 jobs total. Not 28,000 jobs.

In the comments to the last post, reader John Wesley Chisholm points out the obvious absurdity of the 12,000 jobs claim:

'll do a little math in case you don't have a calculator handy: 12,000 jobs at say a low rate of $30,000 per year times 10 years is $3.6 billion. That just plain doesn't make sense and requires a little more (a lot more) explanation, if you ask me. I sincerely doubt anyone can stand by this number as the incremental number of jobs created by this centre no matter how optimistic they are about spin-offs. This would be twice the number employed by the entire HRM public service with an annual operating budget of over $700m per year.
Increase the number to 28,000 jobs at $30,000 each, and you're talking about $8.4 billion in supposed economic impact---the number is so over-the-top ridiculously wrong that I'm amazed anyone who repeats it can keep his job as a business columnist. Are there no editors? No standards?

Regardless, there's a big difference between 2,751 and 28,000. By purposely recasting "person years" as "jobs," TCL has inflated the jobs figure by over 900 percent. There's no more accurate word for this than "lying"---TCL is lying about potential job creation, to oversell the convention centre proposal. And lazy, stupid or complicit (you pick), editorial writers are going along with the charade.

What kind of jobs?

No doubt many convention centre supporters will say that it doesn't matter if it's 2,751 jobs or 28,000 jobs---any increase at all in jobs is good, so we should jump on the bandwagon. I'd suggest that the very fact that TCL is lying about the jobs numbers is reason enough to suspect that even the Gardner-Pinfold numbers aren't supportable.

But even Gardner-Pinfold's 2,751 figure doesn't mean 2,751 jobs. What I alluded to above is this: you can add up part time jobs to reach that figure. So, you could have 11,004 people each working a shitty 10-hour/week minimum wage job, and that would count as "2,751 person years of employment." You wouldn't want to hold it up as "11,004 jobs," though, because that would suggest that 11,004 people could actually live off these jobs, when in reality not one person could. To its credit, Gardner-Pinfold cuts through that confusion by using "person years"---it's TCL that lies about it by calling them "jobs."

Still, it's an open question: will these 2,751 person years reflect good paying full-time jobs, or shitty part-time minimum wage jobs?

Here's what we know: according to union reps, the present-day TCL operation has just 35 workers represented by the Canadian Auto Workers. I think it's probably fair to assume that outside of management, these are probably among the best-paid of the TCL workers, just by virtue of being represented by a union. But even for these workers, four out of the five pay categories are minimum wage. Another 178 TCL employees, says the union, are ineligible to join the union because they don't work the required 30 hours per week--- in other words, they have shitty part-time minimum wage jobs.

There's no reason whatsoever to believe that TCL will suddenly start hiring full time workers at good wages, and there's no reason that the supposed spinoff jobs of hotel maids and hospitality workers will suddenly see a a big wage increase either.

So let's just put this jobs argument to bed: it's being spread by lying people with an agenda.

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