What if your town got really lucky and landed a new major employer - one that would directly bring hundreds of high-paying jobs to your community that would also boost the number of other jobs available locally? How big of an economic benefit could that be for your town?
To answer that question, you're going to have to make some assumptions about how many other additional jobs might be generated as a result of having the new employer and all its employees come to town - jobs that will indirectly support the new business its employees, such as real estate agents, restaurant workers, personal service providers, couriers, teachers, landscapers, et cetera. It will also help to know both how much the new jobs coming to town will pay on average, as well as how much the average "other" job in your community pays today.
If you have that information, then you have all you need to get a quick sense of how much your community will benefit as a result of becoming a boomtown for new jobs! Just enter the indicated information in the tool below, and you can do your own economic impact calculation. If you're reading this article on a site that republishes our RSS news feed, click here to ensure that you can access a working version of this tool!
In the results above, the Combined Annual Income from All Jobs Added to Community represents the money that will fully pass through to members of the community, not counting any charitable contributions that might pass through to members of the community on the part of the new employer.
Meanwhile, the Total Annual Economic Contribution of the New Employer represents the value of the economic activity that its business brings to the community, which we calculated by adding the New Employer's Projected Annual Revenue for Work Done in Community to the Total Annual Income from Additional Jobs Generated in Community. Because the incomes from the jobs of the new employer are paid from their business revenues, doing the math this way avoids double counting the contribution from the incomes of the direct jobs with the new employer.
In case you're wondering about the default data, it is based on information that is available for the aerospace industry, and represents the average value of jobs that at least one employer delivered to its community.
Our tool will also work in reverse to estimate the economic impact upon a community if a major employer leaves, goes out of business or undergoes major layoffs, such as the oil industry has experienced in recent years. If you want to try that math out, the number of other jobs generated for each direct job in the oil industry is approximately 3.0.
For a football stadium, we estimate the figure to be about 0.3. This is based upon data for Levi's Stadium in Santa Clara, California, where we assume that 4,500 people are employed for 8 hours on game days, which in terms of the collective hours they might work, is the equivalent of 17.3 full time employees who work year round. Divided by the 60 actual full time, year-round direct employees of the stadium gives the appropriate multiplier of 0.3.
You know the best part of having developed this tool? Now, towns and cities don't need to hire costly economic consultants just to do the math to get these estimates!
Labels: business, economics, sports, tool
Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:
ironman at politicalcalculations
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