Culver’s job creation plan questioned by economists

Job creation estimates for Gov. Chet Culver’s $750 million bonding plan were called into question Sunday by two economists who said the announced totals were five times higher than what should be expected.

Iowa State University economist David Swenson and Creighton University economics professor Ernie Goss both told The Cedar Rapids Gazette that Cuver’s claim of 21,000 jobs created in the next three years is overblown.

According to Swenson’s calculations, if Culver’s infrastructure plan spent $250 million in each of three years, it would create roughly 4,000 jobs the first year and sustain those jobs for two more years.

Ernie Goss, an economics professor at Creighton University, said the job-creation numbers are typically exaggerated because they don’t take other variables into account.

Goss points out that infrastructure spending also can result in “crowding out,” or drawing workers from other jobs for the infrastructure projects.

“It won’t be entirely just new workers moving into the state, or it will not be unemployed workers,” he said. “It might be a worker that’s working somewhere else.”

Swenson also said workers might work on several different projects over the course of three years. The governor’s estimates count those workers several times, which inflates the numbers.

Phil Roeder, Culver’s deputy chief of staff, said the administration based the figures on a report by the Federal Highway Administration, which said 2,800 jobs would be created or retained for each $100 million in public spending. But even federal experts are not in full agreement on the precise number of jobs created by infrastructure spending. The U.S. Department of Labor calculated that only half that amount of jobs would be created with $100 million spent.

Regardless of the differences, Roeder said the fact that jobs will be created and Iowa’s infrastructure will be repaired is what truly matters.