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High-Speed Rail Jobs Estimate Too Good to Be True!

"First, they counted every year of work as a separate job. So if one person were to work 10 years, that would count as 10 jobs."

Dec 23, 2011

 

Families Protecting The Valley Newsletter
VOLUME 3 ISSUE 88

DECEMBER 23 2011

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High-Speed Rail Jobs Estimate Too Good To Be True!

The latest bad news for California's high-speed rail enthusiasts is the exposure of the dishonesty about how project officials calculate their jobs projections.  It turns out 1-million jobs is really something between 20-thousand and 60-thousand.  How could they be so far off?  Let us try to explain. 

From the article below by Mike Rosenberg at the Mercury News we have this explanation:  "First, they counted every year of work as a separate job. So if one person were to work 10 years, that would count as 10 jobs. Next, they figured outside companies, such as restaurants and retailers, would hire two new people for every single construction worker.  Grand total: 20,000 construction workers and 40,000 "spinoff" employees each working the entire 22-year project would count as more than 1 million jobs."


You have to admit:  they are creative.  By this calculation if you've had a job for 20-years, you've really had twenty jobs.  And by having a job you've created 2 more jobs, so in twenty years just by going to work you've created 40 other jobs.  Or, did they create you?  Chicken and egg thing, I guess.  Now if we could only create bullet train riders with the same magic wand.

And now that the actual jobs are shown to have been exaggerated exponentially, how many jobs will be destroyed by this project?  With some of the proposed routes destroying active businesses that will not be relocated especially in the agricultural areas of the valley, will there even be a net gain of jobs?
 
Governor Brown continues to give this project his unqualified and enthusiastic support despite the facts.  He views this project as currently proposed as 'visionary'. For the vast majority of Californians, it is a nightmare.  It is time for the Governor to show true leadership, and table this project until it is redone and our fiscal house is in order.

Before we could send out this newsletter, the Mercury News has a follow-up article which we have for you below (2nd article).  In it project board member and the governor's jobs czar Michael Rossi says "it is important to emphasize that the case for high-speed rail does not revolve around jobs,  It is clear to Californians that something must be done to keep our state moving over the next generation."  So now that the jobs projections have been shown to be a sham, it's no longer about jobs. 

Someone better tell Fresno Mayor Ashley Swearengin and Congressman Jim Costa who both support the job-creating train.  The Mayor says “high-speed rail is vital for California. It will create hundreds of thousands of jobs,"  Representative Jim Costa agrees. He says the project could create as many as 100,000 jobs.
 


California high-speed rail jobs estimate too good to be true

 


Though California's high-speed train faces an intensifying backlash over its $99 billion price tag, political leaders from Washington to Sacramento justify the cost by touting another huge number: 1 million jobs the rail line is supposed to create.


But like so many of the promises made to voters who approved the bullet train, those job estimates appear too good to be true.
A review by this newspaper found the railroad would create only 20,000 to 60,000 jobs during an average year and employ only a few thousand people permanently if it's built.


"They have a really hard sales pitch with the real numbers, so they've fudged the numbers," said state Sen. Doug LaMalfa, a Chico-area Republican who is introducing legislation to send the rail line back to voters. "C'mon, a million people working on a 520-mile railroad? I practically laughed out loud when (I heard that)."


One million people more than the combined workforce of San Jose and San Francisco would have to cram shoulder-to-shoulder just to fit along the rail line between San Francisco and Anaheim.


In trying to win over a skeptical public to support the most expensive public works project for any state in U.S. history, Gov. Jerry Brown, the Obama administration, Democratic lawmakers and big city mayors such as San Jose's Chuck Reed have repeated the 1-million-jobs mantra.


"The facts are clear: Over 1 million good-paying jobs will be created," House Minority Leader Nancy Pelosi said in a statement last week.
 

But state leaders, it turns out, quietly beefed up employment estimates. First, they counted every year of work as a separate job. So if one person were to work 10 years, that would count as 10 jobs. Next, they figured outside companies, such as restaurants and retailers, would hire two new people for every single construction worker.


Grand total: 20,000 construction workers and 40,000 "spinoff" employees each working the entire 22-year project would count as more than 1 million jobs.


In reality, high-speed rail's construction jobs would lower the state's current unemployment rate from 11.3 percent to just 11.2 percent.


"Job-years and jobs are like apples and Twinkies, they're not even in the same food group," said Elizabeth Alexis, a Palo Alto analyst who testified before Congress about the project last week. "It's not accurate, and it's misleading; (most of the) people who thought they're getting jobs are not getting jobs."


'Shorthand' conceded


Project officials conceded they need to explain the job figures more clearly, particularly with their credibility on the line.


"To the extent that we use jobs, it's been as a shorthand (for years of employment). It's an easier way," said Dan Richard, who Brown appointed to the California High-Speed Rail Authority Board controlling the project. "It's absolutely fair that we should be more disciplined about that going forward. At the end of the day, I don't know if it really changes anything. The bottom line is if you're unemployed, you don't care if it's jobs or job-years."


Government agencies routinely calculate temporary construction jobs by the year, but it's unusual for public officials to lump all those estimates together. For instance, the White House tells recipients of stimulus funds not to count workers multiple times like officials have done on the rail project, which received $2.25 billion from those grants.


It's also common for planners to calculate spinoff jobs for huge public works projects. But unlike high-speed rail, they usually separate construction and spinoff jobs in touting the numbers, like the Valley Transportation Authority does when promoting the BART extension to San Jose. And not everyone agrees high-speed rail will be the economic boon for outside industries that officials are assuming, particularly since construction would begin in a remote Central Valley location.


Critics say the job questions are just the latest example of supporters misleading the public.


When voters approved the project in 2008, they were told it would cost $33 billion, a price tag that has since roughly tripled. Since the vote, the start date of full service also has been pushed back from 2020 to 2034, expected rider counts have dwindled and sources of funding have dried up. A Field Poll earlier this month found less than one-third of Californians would approve the project today.


Key differences


Michael Rossi, Brown's jobs czar and another project board member, said "there was no plan to mislead anyone by manipulating the numbers."


But supporters always publicly refer to the huge employment totals as "jobs" sometimes even saying that the first leg of the project will put 100,000 "people" to work without explaining that the figures represent years of work, and that two-thirds of the jobs are expected spinoff positions.


"They want you to believe that when this thing gets under construction that there are 100,000 individual bodies working around on this project, which is totally bogus," said Aaron Fukuda, co-chair of a Central Valley group aimed at holding the rail authority accountable. "They're trying to legitimize a false number."


What's more, officials have not taken into account the potential job losses from the railroad, which will displace many businesses along the train route, including several along the Caltrain corridor between San Francisco and San Jose. And within the last month, the California Legislative Analyst's Office said other state programs could cut jobs so the state can afford the $20 billion debt to pay its portion of the rail line.


Rail authority spokeswoman Rachel Wall said the first leg of construction "will create a ripple effect throughout the state" and provide desperately needed paychecks, particularly within the hard-hit construction industry. In addition to temporary construction jobs, the rail authority expects to hire a staff of 4,150 permanent workers to run the railroad.


Despite the evidence, supporters are not expected to abandon their jobs campaign anytime soon.


"However you tabulate the exact jobs and spinoff economic activity numbers," said U.S. Rep. Dennis Cardoza, a Central Valley Democrat and supporter, "there is no doubt that this project will provide an economic boost in the San Joaquin Valley, where unemployment figures are among the highest in the nation."


Contact Mike Rosenberg at 408-920-5705.

The official tally
1 million: Estimated in job-years, meaning that if a person works a job for 10 years, it's counted as 10 jobs.

What we counted
60,000 total: There will be 20,000 construction workers and as many as 40,000
"spinoff" workers at a time.


AFTER CONSTRUCTION
4,150: The number of permanent employees who are projected to work on the railroad if it is fully built.



California high-speed rail vows to show real job figures

Backing off claims that the bullet train would create more than 1 million jobs, California's high-speed rail leaders acknowledged Thursday that their "short-handed" definition used to describe jobs has been "imprecise and potentially confusing."


In a statement responding to an investigation by this newspaper, the California High-Speed Rail Authority clarified that the 1 million jobs figure does not refer to the number of workers. Instead, as the newspaper reported, it refers to an economic term known as "job-years" in which, for example, one person working 10 years equals 10 job-years.


While the lower-than-advertised job figures would result in about 20,000 construction workers during a typical year, the project's die-hard supporters such as Gov. Jerry Brown said the differences didn't change their fervor to start building.


Project officials vowed Thursday to make it clear that far fewer people will get jobs than they previously implied, saying now that the project will create "thousands and thousands" of jobs.


"But it is important to emphasize that the case for high-speed rail does not revolve around jobs," project board member Michael Rossi, the governor's jobs czar, said in the statement. "It is clear to Californians that something must be done to keep our state moving over the next generation."


From Sacramento to Washington, political leaders have argued the railroad's employment benefits are so overwhelming that this is the perfect time to embark on the most expensive project for any state in U.S. history. They are urging the Legislature to approve the $6 billion first leg of construction in the Central Valley next year, hoping to find the rest of the funding along the way.
 

Rail officials also had used "job-years" to add up the number of "spinoff" jobs they expect outside companies, such as restaurants and retailers, to create to support the project. In reality, they estimate about 40,000 actual workers or two-thirds of the project's total jobs will be employed in spinoff jobs in a typical year, even in secluded areas like Central Valley farmlands.


A spokesman for Brown did not address the jobs claims but in a two-sentence statement called the newspaper report "hyperbolic" and said it "attempted to create an inaccurate impression."


"High-speed rail will be a major, much-needed boost for California's economy," the statement said.


head Jim Earp of the California Alliance for Jobs also blasted the newspaper's investigation, adding that the project would give paychecks to "thousands" of out-of-work laborers.


Rossi and the rail authority emphasized that while job creation was important, more importantly, the project will "address the long-term mobility needs of a quickly growing population."


The rail authority recently ended a multimillion-dollar public relations campaign funded by state taxpayer funds in which they commonly referred to the total employment figures as "jobs," or "people" who would get work. Lance Simmens, the rail authority's communications chief, said Thursday that if the rail authority uses the 1 million figure again, it would make clear that it is only estimating years of employment.


"I'm sure we'll do what we think is in the best interest of being clear and transparent," Simmens said, adding the authority would also separate construction and spinoff jobs "when it's called for."


"That's the right way to do it; it's less misleading," said Jeffrey Michael, director of the business forecasting center at University of the Pacific. "It's important to look at this skeptically (so this doesn't) become the standard way people evaluate projects, because it's deceptive."


Rail opponents say the rail authority's integrity already was on the line, as it has changed several key figures about the project since voters approved the bullet train in 2008. For instance, officials tripled the project's cost, pushed back the start of full service 14 years, downsized rider expectations and increased the anticipated cost to ride.


"I used to be a fervent supporter, but now it just really looks ludicrous," said Portola Valley resident Geoff Baldwin. He said the latest on jobs claims "was kind of the last straw, actually."


Contact Mike Rosenberg at 408-920-5705.



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