Biden’s bogus boast of 1 million ‘construction jobs’ – The Washington Post

by | Aug 18, 2022 | Jobs

Placeholder while article actions load“There’s an analysis that says investment in the Chips and Science Act will create 1 million — more than 1 million construction jobs alone over the next six years building semiconductor factories in America.”— President Biden, in remarks during the signing of the Chips Act, Aug. 9“Investments in the CHIPS and Science Law will create more than 1 million construction jobs alone over the next 6 years building semiconductor factories in America.”— Biden, in a tweet, Aug. 11We’ve learned from experience that when a president utters a big job-creation number, it’s ripe for fact-checking. So we were curious to learn how the president’s job prediction for the Chips and Science Act — which will provide nearly $53 billion for U.S. semiconductor research, development, manufacturing and workforce development — was developed.AdvertisementDuring the signing ceremony, Biden mentioned an “analysis” as the source for the claim that 1 million construction jobs would be created. In the tweet, which has recorded more than 5,000 retweets and 31,000 likes, the president treated the number of “more than 1 million construction jobs” as an established fact. But we were puzzled when we did not see the figure in the White House’s “fact sheet” on the bill.It turns out this number is wildly exaggerated.The first tip-off that the number is fishy is because the number is so big and round — 1 million.President Bill Clinton famously — and incorrectly — claimed in 1993 that the North American Free Trade Agreement would create 1 million jobs in five years. But that only happened because his staff accidentally supplied him with an early draft of remarks that included a made-up placeholder number. The White House quickly admitted the error.AdvertisementThe second tip-off is that Biden was specific — 1 million construction jobs in six years. Before the pandemic tanked jobs, the U.S. economy took four years to add 1 million construction jobs, according to the Bureau of Labor Statistics data — from all industries, not just the semiconductor business.When we asked the White House for documentation, we were directed to a 2021 report issued by the Semiconductor Industry Association. That report touted the contribution of the semiconductor industry and examined the potential impact of a $50 billion federal investment program, similar to the Chips Act.That’s the third tip-off — this is a report issued by an industry advocate. With all respect to the SIA, it’s not neutral on the matter. It would be unusual for any trade group to issue a report that did not put the best gloss on the industry’s economic contributions.AdvertisementWhen we dug into the report, moreover, we could not find any reference to 1 million construction jobs being created. Instead, the report predicted such an investment — roughly equivalent to the Chips Act — would create “an average of 185,000 temporary jobs annually throughout the U.S. economy from 2021 to 2026.”Six times 185,000 adds up to more than 1 million. But note that these are not all construction jobs. In fact, few are construction jobs.“The statement about 1 million construction jobs is not accurate,” said Sarah Ravi, a spokeswoman for the association. She directed us to a chart in the report that indicated that a $50 billion investment would create an additional 6,200 construction jobs.Hamilton Galloway, head of consultancy for the Americas at Oxford Economics, which crunched the numbers for the report, said the 1 million jobs would be created during what he called the six-year “construction phase” of the Chips Act investments. He said the largest share of jobs said to be created stems from capital expenditures — the purchase of semiconductor manufacturing machinery and other capital goods. In other words, not construction.AdvertisementNote that the report said the jobs would be “created throughout the U.S. economy.” That means this is a calculation that includes direct jobs created — plus indirect jobs (via the supply chain) and induced jobs (people spending the wages they earn). These figures were created via economic impact software developed by IMPLAN, an economics firm, derived from the Commerce Department’s Bureau of Economic Analysis (BEA) input-output tables. These tables are used by economists to understand how industries interact with each other and with the rest of the economy. Depending on the industry, the creation of one job may reverberate differently in the economy.IMPLAN provides the example of how the impact of a new vehicle manufacturing plant might be traced through the economy. …

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