Where has Gov. Patrick been getting his numb3rs?
In Connecticut, the ongoing $1.5 billion expansion of two casinos created 2,600 new construction jobs. At that rate, casino developers in Massachusetts would have to spend $16.7 billion to achieve Patrick's prediction of 30,000 new construction jobs – an amount more than five times as great as what most developers say is likely to be invested in casinos statewide.
Gus Faucher, director of macroeconomics for Moody's Economy.com, asked by the Globe to make an independent analysis, said building three casinos at a cost of $1 billion each in Massachusetts would create a total of 4,000 to 5,000 new construction jobs for the duration of the building period, probably three years.
Under that analysis, Patrick's prediction would be at least six times too high.
Even a group representing building trade unions – Patrick's major ally in the casino debate – now says Patrick's projection is 10,000 jobs too high.
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Oy. You know, I'm not sure I ever would have been convinced by Patrick's casino plan, since my objections are based on their unequally destructive effect on some individuals and families. But in any event, his work on this issue has not been marked by cautious, well-documented claims for its effects — to say the least. It's one thing to call DiMasi's bluff on revenues; but this is not doing wonders for the Gov's credibility on other policy matters. And he's gonna need it.
Anyway, it would be great to see even more totally independent research on the casino plan. Why stop at one? Hey Herald, you wanna step up?
Look, it’s not like arguing that the casinos will generate x jobs in operations [dealers, security, cleaning, hospitality, etc]. Those jobs are permanent. Sure, the same person won’t work them for eternity, but the job slot itself will exist for the foreseeable future.
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p>The number I’d like to see is hours of employment per year, then divided out to get FTEs (full time equivalents). Of course, the part-time/full-time breakdown is also interesting.
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p>But construction jobs are different. Let’s say the number is 5,000 jobs. Does that mean that all 5,000 will be employed full time at the casino for the entire 3 years? Does that actually mean that 15,000 people will be employed for an average of one year each on the job [due to different specialties being needed only for shorter durations]? Is the job so big that they’re going to import tradesmen from other parts of the country to do work, thereby negating the “jobs” argument to some extent from a pro-Massachusetts line of thinking?
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p>Don’t give me a sentence. Give me a solid paragraph. Otherwise, how can I understand or believe the number?
as this type of construction employment should not be measured in terms of jobs given the temporary nature of the build-out. If a billion $ is to be spent on construction (not including land, permits, design, license fees, etc.) there is a split between labor and materials, as well as overhead, administration and profit. Some of the numbers quoted in the Globe imply that about 30% labor is a historical estimate. That seems low, but it may be that benefits, insurance, etc. are included in the other 70%. In any case, assuming that it is 30%, that is about $300M to be spent on labor. What is the average salary of labor? If it is $60K per year, that translates to 5,000 man-years of labor. But since that is over a period as long as 3 years, the average is only 1,667 jobs for the 3 years. That is certainly well below the estimate given by the proponents. However, did they claim each job would last 3 years? If instead, the average job was for 6 months (a good assumption due to the staggered work requirements), then voila, we have 10,000 jobs per casino!
… I would suggest that the true costs of labor are close to $90,000 to $130,000 per year from Laborers to Highly skilled Union foremen. Also it goes from Site work to Foundation and Building shell to the High end Finish so at no time does one trade stay involved for the build out. 30% labor cost is a good estimate for labor. Site work (the heavy earth moving equipment) runs at about $150 to $250 per hour per machine and there are lots of them in a major project like this. Also lots of overtime is paid which are not more jobs but longer hours for the work force already in place. The cost of commercial building materials is sky high because the Chinese have bought everything in sight on the world market. The levels of finish are expensive with all the wood and marble that goes into the glitz. 70% sounds reasonable for the non labor expenses. Associates of mine who worked on both Foxwoods and Mohegan Sun said at no time did the work force total 10,000.
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p>10,000 is a bogus number and what was presented in the Globe is a realistic assessment.
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p>This comes off as the “Politics of Hope no one is paying attention”. Good work on the part of the Globe.
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p>Normally total compensation includes the entire cost to the employer for the FTE (wages, benefits, unemployment, liability, taxes). So “labor” cost should really reflect “total compensation” costs, as non-wage FTE costs aren’t normally lumped in with materials or capital expenses, etc.
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p>I’m not disputing the estimate on the costs for labor, just wondering about the breakdown, to see if I misunderstood.
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p>Thanks.
I agreee that simply saying casino construction will create X number of jobs is misleading, because you can work the numbers any number of ways and come out with different numbers of job creation.
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p>You could take total number of estimated person-hours to complete all the trade work and divide by 2080 hours (Fed average assumption) to arrive at total FTE but, most construction work involves an assumption of OT, and depending on the kind of OT or the unions involved, this could be at a 1.5, 2.0. or 3.0 OT rate. So a calculation based on hours per FTE to determine the numbers of FTEs would be subject to wiggle.
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p>You could take the total number of jobs predicted but, as you noted, a finish carpenter comes on the job at a different stage than a carpenter doing concrete form work. A solid surface installer will be required for a different number of work hours than an ironworker or a painter. If you added all the hours (including OT) and divided by 2080, you might come up with a different number of total FTEs.
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p>You could take the total estimated (over- or under- inflated) cost, estimate a labor budget and then divide that by an hourly trade rate average to figure out how many hours are budgeted. Then use that to determine how many hours are allocated and then divide that by 2080 to determine the number of FTEs that are allocated. A unionized heavy equipment operator rate (prevailing wage plus benefit package), however, is going to skew one way, and a non-unionized laborer rate (prevailing wage minus benefit package) is going to skew another, and you need more laborers than heavy equipment operators.
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p>Even using the Fed standard of 2080 is a little peculiar since most trades aren’t paid for days not worked.
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p>I wouldn’t necessarily consider data from the trades as reliable, as trade unions may be hyping this to their membership because with fading housing starts (and the end of the Big Dig), finding many good union jobs is what the locals’ leadership is supposed to do.
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p>I don’t yet believe that the benefits of casinos are outweighed by their long-term costs to their local communities, especially costs when sited in rural communities. I understand that Deval is concerned about the loss of revenue to states that do provide casino gambling, but I’m just not convinced that we have all the a) facts (and costs) on which to make a reasoned decision or all the b) options for economic development that may include, but are not exclusive to, casino development. I am a Deval supporter, but on this issue, we disagree.
He’s damaging his credibility on this issue and it’s going to cost him support among the base. There’s an election in two years and it’s definitely going to be contested, big time. He’s going to need the base to win again, arming the same people-powered army that propelled him to victory in ’06.
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p>Honestly, I really wouldn’t be shocked if casinos eventually cost him his administration, especially if a casino bill actually passes. In a weird sort of way, if DiMasi’s successful in blocking casinos, he could just be saving the Patrick Administration in the long run.
Who is going to contest, big time?
…for Tim Cahill, myself. I’d be happy to see Terry Murray, but I wouldn’t expect it. Particularly if a President Obama appoints our current guv, I don’t know if Tim Murray will come off the better for it.
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p>Geez, you discuss political leaders of the state and you have 2 “Murray”s and 2 “Tim”s. Diverse place this, eh?
We’re going to see a credible primary challenge mounted; I think it’ll come from the Rs.
President and CEO of Harvard Pilgrim. He was mentioned as a potential replacement for Darrell Crate as chair of the Mass GOP, but presumably he stayed out of that position to position himself to run in 2010, so Peter Torkildsen was elected to that position. Just a thought.
Charlie Baker will probably run, maybe a few others. They’ll be well financed, positioned and will have a shot.
It is debatable how much exposure to Deval Patrick hurt the chances of his mentor Barack Obama in this state last month.
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p>To the extent that it did however, we can anticipate that effect doubling when it comes to the elections for the General Court this November. Deval isn’t making things easier for the Democrats in the Legislature.
The Mohegan Sun developers presented to the Palmer casino citizens committee that their proposal for a $1 billion dollar casino would employ 1,500 construction jobs. However, even in the media report above, a union rep. stated 2,000 construction jobs would be created. That after reading (?) and hearing (?) the presention state 1,500.
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p>I don’t think Governor Patrick is the only person who should be called out on the gross misrepresentation of the jobs and economic boost of casinos. Bob Haynes, President AFL-CIO, Anne Wass, Mass Teachers Association and the many mayors (I would bet a fiver none have read the bill) who have endorsed the Governors proposal.
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p>The MSM is culpable as well pepetuating the claims of 30,000 construction jobs and 20,000 permanent jobs without researching and refuting the lies six months ago is just plain bogus.
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p>Go Sean Murphy, they need to update your profile to casino factfinder extraordinaire, good work!
Go Sean Murphy, they need to update your profile to casino factfinder extraordinaire, good work!
I remember the Connecticut places having a little impact on the bettering of Connecticut citizens financial abilities. The construction jobs went not just to locals, but people from Massachusetts, Rhode Island, New York. In this day and age, construction workers have to know how to handle the equipment. If there is some untrained local on the site, He is probably put there to appease a local politician.
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p>Much of the jobs that were available after construction went to seasoned gambling game people from Nevada and Atlantic City and overseas. The service and maintenance jobs to Asians that were imported, housed in rental properties and hot bunked. Believe it or don’t, these places aren’t put up for the benefit of the local populace.
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p>It is all documented in newsprint. Someone only need check the newspaper archives in Connecticut.
30,000 jobs was the estimate for the Big Dig, going in. Actual employment on the project peaked at about 3,000 — although I suppose that over 15 years, it’s possible that 30,000 different people worked on it at some point.
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p>I’m sure we could create more construction jobs by building, say, nuclear power plants.
In his initial post, Charley applauds yesterday’s Globe story and issues a plea for more digging and reporting on this issue by the press. It happens that the current issue of CommonWealth magazine, the award-winning quarterly published by the nonpartisan public policy think tank MassINC, offers what may be the most comprehensive look to date at the economic assumptions behind Patrick’s casino proposal, including a similar debunking of the administration’s construction jobs claims. Read the story, “Playing the Numbers,” here:
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p>http://www.massinc.org/index.p…
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p>Michael Jonas
CommonWealth magazine
Even though Paul McMorrow and Julia Reischl were the first – by a couple of weeks, beating the Herald’s Casey Ross, who also didn’t mention the Dig piece in an October article – to report on the assumptions behind Patrick’s casino numbers.