The Job Creation Claims for Metro’s $4 Billion Transportation Measure Are Misleading

Voters might not want to ride the MAX to Bridgeport Village, but they understand the value of jobs.

The Let’s Get Moving campaign, which backs Metro’s $4 billion transportation measure, claims in the Voters’ Pamphlet the measure “will create more than 37,500 family-wage jobs.”

With unemployment still near record highs because of the COVID-19 pandemic, that sounds pretty good—it’s more workers than the region’s two largest private employers, Intel and Nike, have on their Oregon payrolls, combined.

But Tim Duy, a professor of economics at the University of Oregon, says such claims disserve voters. “If they say they are creating 37,500 jobs, that’s an exaggeration and it would be misleading,” Duy says.

That is exactly what the campaign is saying—not only in the Voters’ Pamphlet but in various messages on its website and in a slick video ad, which says the measure would “create nearly 37,000 living-wage jobs.”

The bond measure, the largest local measure in Oregon history, would pay for a massive package of transportation improvements, including a new MAX line to Bridgeport Village in Tigard and construction projects in 17 transportation corridors throughout the tricounty region. Metro also believes it can qualify for nearly $3 billion in various matching funds, bringing the total to about $7 billion.

The agency worked for nearly two years prior to the pandemic to formulate the package. Now, despite the shifts in work patterns and commuting and the economic uncertainty brought on by COVID-19, Metro has plowed ahead, making job creation during the recession a major selling point.

The idea: Voters might not want to ride the MAX to Bridgeport Village, but they understand the value of jobs.

And Duy says the campaign’s presentation is in keeping with a typical economic development program. “You always present the biggest number you can,” he says. “That’s why they are going to put that number forward.”

Not surprisingly, trade unions are on board.

“These construction jobs, where our workers get their hands dirty and go from project to project where their skills are needed, these are the jobs that are often hardest hit during an economic downturn,” said Matt Swanson, political director for the Pacific Northwest Regional Council of Carpenters.

But the issue, Duy and others say, is how you define jobs. Do you count them for as long as a worker is employed (as state economists do), or do you count them anew each year for a cumulative total (as the campaign does)?

The campaign’s numbers are based on a two-page analysis produced by the consulting firm ECONorthwest. That analysis includes an important caveat that doesn’t make it into campaign literature.

“The proposed projects would total 37,571 [full-year-equivalent jobs],” the analysis says. “These FYEs will be spread over several years. To understand the annual average, one would need to divide the FYEs by the number of years of the project.”

In other words, the actual number of jobs created next year or the year after would be a small fraction of 37,571, because the projects would be spread out over many years. The campaign never points that out.

Mike Wilkerson, the economist at ECONorthwest who crunched the numbers for Metro, says the regional agency simply asked his firm to calculate a total jobs number, not an average. Metro did not provide ECONorthwest with a schedule of when the projects might start and finish.

“It’s important for the public to understand that these jobs aren’t all going to happen in a year,” Wilkerson says.

Job creation is a matter of intense study and scrutiny, especially when governments pitch expensive spending proposals.

If you keep your job next year, your boss won’t be credited with creating a new job. But that’s how some officials count the effects of their proposals. When state officials pitched the controversial $3.6 billion Columbia River Crossing project a decade ago, they said the project would create 20,000 jobs. They neglected to mention the jobs would be spread over 10 years.

Amy Vander Vliet, a state employment economist responsible for the tricounty region, says official employment statistics count jobs by tracking how many people are currently employed—not a cumulative total of how many have been or will be employed.

“The way they are measuring jobs is different from the way we would measure them,” Vander Vliet says. “It’s apples to oranges.”

Duy is also skeptical of the campaign’s claims that all of the jobs created would pay a “family” or “living” wage.

ECONorthwest broke down its job creation estimates into two categories: construction jobs, of which it expects to see 16,452 paying an average of $98,103 a year. Most of the jobs created, however—21,118 of them—would be what

ECONorthwest calls “secondary jobs” in retail, hospitality and other sectors where construction workers spend their money.

Duy disagrees that such jobs would pay even a “living” wage.

The campaign referred wage questions to ECONorthwest’s Wilkerson, who says the secondary jobs pay far less than construction work.

“Those are generally middle-wage and lower-wage jobs,” Wilkerson says.

Opponents of the measure say the job figures should also factor in how many jobs might be lost because of the payroll tax to fund the measure—up to 0.75% on companies that employ 25 or more workers.

“The Metro wage tax will kill jobs, not create them,” says Jeff Reading, a spokesman for the “no” campaign. “Metro’s estimate fails to consider the lost jobs due to higher labor costs and the jobs lost from the 150 businesses that will be destroyed to build the light rail line.”

Peter Hulseman, a senior economist at Portland State’s Northwest Economic Research Center, says studies have shown payroll taxes do cost jobs.

“A payroll tax is definitely going to dampen employment,” Hulseman says. “You can’t make something more expensive without people using less of it. There will definitely be fewer jobs.”

The campaign referred questions about the tax’s effects on job numbers to ECONorthwest, which agreed that the payroll tax would cost some jobs.

Duy says the campaign should focus on the transportation benefits its projects might bring rather than presenting a specious jobs argument. “Metro’s vision for transportation should be the selling point,” Duy says. “The whole job thing is largely secondary.”

Read the full article in Willamette Week