Chanting Points Memo: Bring A Shovel!
By Mitch Berg
If the local leftybloggers have it right, the Governor apparently wants to staff up a bunch of do-it-yourself projects.
I first saw it on Minnesota “Progressive” Project last night – Governor Dayton has announced his “bonding plan”.
And here was the claim:
In contrast to the upcoming ballot measure open season the Republicans will be envisioning instead of working on a bonding bill, Gov. Mark Dayton released his bonding bill proposal today. Dayton’s plan would put 25,000 Minnesotans to work in every corner of the state. It would cost $775 million.
The reverberations throughout our economy of putting 25,000 people to work would be significant. These people would spend money in their communities, increasing the income of people in the service industries.
These are the almighty “infrastructure projects” that Libs are talking about these days.
But after our experience last week – where Dayton’s “Jerbs Plan” turned out to be a meaningless deduction equal to about a month of $15/hour employment – I remembered the great dictum one must always observe when reading liberal commentators:
Distrust, but verify. Then, almost inevitably, distrust some more.
So I ran the “numbers”, such as they are.
The “plan” calls for $775,000,000, and will supposedly provide 25,000 jerbs.
So when you divide $775,000,000/25,000, you get $31,000 per job.
That’s a little under $15 an hour, on average (and probably lower, since presumably some of those 25,000 people will have to be DFL/union-connected bureaucrats to manage everything, who are just a little more equal.
And when Eric “Big E” Pusey gushes (or, presumably, takes dictation from some Dayton Administration spokesbot the Alliance For A Better Minnesota) that…:
The projects included in his proposal are ‘shovel ready’ and would improve our state’s infrastructure.
…perhaps he should add that the workers will actually need to bring their own shovels – because creating 25,000 $14-and-change/hour jobs out of $775,000,000 leaves no money left over for shovels. Or concrete. Or macadam, asphalt, aggregate, or even paint.
Pusey’s number, in short, is baked wind.
Just like every number the Dayton Administration Alita Messinger and the Alliance For A Better MInnesota have put out so far this year.
Yeah, I know – Pusey’s probably conflating the phantom jobs in the Jerbs Bill with the fantasy numbers in the Bonding Bill. I’m probably jumping on the wrong thing, because he’s probably writing taking dictation about the wrong connection.
More on that later today.
(With a tip ‘o the hat to Sarge, who did the math just about the time I was thinking about doing the math…)
January 18th, 2012 at 6:47 am
And even that was looking through rose colored glasses. 31k in salary leaves nothing for benefits (or is Obamacare going to take care of that?)
The real question I am looking into is if there is any region of the state in which the prevailing wage (which by law must be paid to anyone working on a state contract) ever goes as low as $15 bucks an hour.
January 18th, 2012 at 8:24 am
To be fair to Gov. Dayton…the jobs estimate number has been lowered to 21,500 (from 25,000). However, even with the lower number the points about prevailing wage, materials, benefits and the estimate too high are still valid.
Also, what gets left out of Gov. Dayton’s talking points is that his plan calls for $300 million in “federal funds” (add to the national debt as we don’t have the money) and $300 million in local funds (to be paid for in…more debt or higher taxes).
One final note: not all of the bonding projects are “shovel ready”. Yes some projects are okay (security fence for Shakopee prison, dam repair), but why should state taxpayers pay for a sculpture garden for Minneapolis ($8.5 million), Beautifying Nicollet Ave ($25 million…shouldn’t the business owners do this ?), expanding arenas and ballparks (close to $100 million !!).
“The torture…the torture…the torture never stops…” – Frank Zappa
January 18th, 2012 at 9:34 am
Dave – exactly. The median wage in the US is $46K ($67K if you filter out single-earner households). $67K is two $16/hour jobs. We know Minnesota has higher-than-average income (and cost of living), and we know state and construction jobs pay better still. The number was BS, and it still is.
JM: I’m bemused by the idea of the “Shovel Ready” project. Like, the American workforce is shovel-pushers?
January 18th, 2012 at 10:14 am
The other possibility is this — the “jobs” are only for projects that will take less than a year to complete. So you would either be paying the 21,000 people for part of the year and then laying them off, at which point the state would have to pay for their unemployment benefits, or you’d have an individual performing one “job,” then taking another “job,” which would bring the actual number of individuals these projects would employ way down from the 21,000 number that Dayton and his pals are touting.
Either way, you are correct in saying the numbers are baked wind.
January 18th, 2012 at 11:28 am
If you use the larger number ($750M + 300M + 300M) we get 1.35 billion.
If 1.35B nets you 21500 jobs, then Obama’s $750B stimulus package gets you about 12 million jobs.
Even Joe Biden doesn’t claim the stimulus created 12 million jobs.
And, as Mr. D says, you can’t just count spending=jobs on one end. When the money gets paid back the jobs go away. If servicing the bond costs 1%, that is 13.5M/year, and 215 jobs per year that will go away forever (if you accept Dayton’s numbers).
One thing that mnprogressiveproject does not seem to understand is that money does not just magically appear when the government spends it. Real people (and institutions) will pull money from some other investment to buy these bonds.