DFL House Speaker Margaret Anderson Kelliher’s gubernatorial campaign is all about jobs.
Part of her plan to boost employment in Minnesota involves two $1 billion bonding bills that she says will result in a specific number of jobs over four years.
“Two $1 billion bonding bills…will have a 50,000 job effect,” she told Minnesota Public Radio reporter Tom Scheck during a jobs press conference July 16, 2010.
Kelliher’s estimates are reasonable, but deserve some clarification.
Bonding bills are essentially miniature stimulus packages. They’re meant to fund state construction projects such as bridge and road repair. Kelliher said her proposed bonding bills would create 50,000 jobs or more during her tenure as governor.
Job creation estimates are fraught with uncertainty; they depend on many variables — including the types of jobs created and how much those jobs will pay. Economists disagree on how useful government investment is in creating jobs. Nevertheless, Kelliher’s analysis is based on sound data. Here’s how the numbers break down:
• $700 million will be invested in road, bridge and building construction and in making state buildings more energy efficient, creating or saving about 19,950 jobs. This figure is based on a metric developed by Stephen Fuller, the director of the Center for Regional Analysis at George Mason University who predicts that $1 billion on non-residential construction supports approximately 28,500 jobs.
• $300 million will be invested in flood mitigation, conservation projects and asset preservation at the state’s colleges and universities. Kelliher estimates the investment will create or save about 3,000 jobs. This figure is based on an estimate developed by state economist Tom Stinson who predicts that every $1 million invested in such projects results in 10 jobs.
By the end of her second year in office, the bonding effort could result in more than 45,000 jobs Kelliher spokesman Matt Swenson said.
Generally speaking, Kelliher’s numbers pass muster. But both Stinson and Fuller point out that Kelliher should clarify that those jobs will be created or saved. The first bonding bill would create around 22,000 jobs. Some of those jobs likely would be temporary, others would last more than a year depending on the project. So the second bonding bill would maintain some jobs, rather than create new ones.
Kelliher’s analysis is based on realistic assumptions, but she failed to point out that she’s talking about 50,000 jobs created or saved in this particular claim. However, she presents a more nuanced argument on her website and Facebook page, so the claim is accurate.
Margaret for Governor, Leave No Stone Unturned: Margaret’s Plan to Create Jobs and Get Minnesotans Back to Work, accessed July 28, 2010
Facebook, Margaret for Governor, accessed July 28, 2010
The St. Cloud Times, The Tale of Two Formulas, By Mark Sommerhauser, March 8, 2010
Minnesota AFL-CIO, letter to Rep. Alice Hausman, Feb. 15, 2010
Interview, Matt Swenson, spokesman, Margaret Anderson Kelliher, July 27, 2010
Interview, Stephen Fuller, Director, Center for Regional Analysis at George Mason University, July 28, 2010
Interview, Tom Stinson, Minnesota State Economist, July 28, 2010