Quinn job stats mixed under scrutiny

Published: Monday, March 18, 2013 5:30 a.m. CDT
Caption
(AP file photo)
A construction site at the interchange of the Tri-State Tollway and Interstate 57 in Posen is shown in the photo taken July 11.

CHAMPAIGN – Gov. Pat Quinn has argued in recent weeks that Illinois is in the middle of a job-creation revival, but while some of his claims stand up to scrutiny, others don't, and still others do not appear based on anything concrete enough to be sure.

With state unemployment pushing back to 9 percent, the governor made jobs a critical theme in both his State of the State address and a speech presenting what he called the state's worst ever budget. It was a note of optimism amid warnings about the state's pension crisis and other bleak financial matters.

"Our Illinois is a place where everyone has an opportunity to work," Quinn said during the State of the State speech, "and where our companies innovate and grow."

It's no surprise that "jobs" has become a key buzz word for Quinn, given how the state battles a reputation for being unfriendly to business. But some of his job statistics are based on theoretical economic formulas, and others appear extremely optimistic, such as a claim he makes about jobs from toll way and public works projects.

"He's not the only person that does this — politicians are politicians," said Fred Giertz, an economist with the Institute for Government and Public Affairs at the University of Illinois. "I think it's sort of business as usual for politicians."

Here's a look at some of Quinn's job and economic numbers:

• Quinn told the General Assembly during his State of the State address that a project to improve water systems is a job engine for Illinois.

"Through our Illinois Clean Water Initiative, we're investing $1 billion in clean water, supporting more than 28,000 jobs," he said.

Spokeswoman Brooke Anderson said Quinn relied on theoretical economic multipliers to come up with that number – formulas often cited by economic development experts and politicians to explain how many jobs public investment should create.

In this case, according to Anderson, formulas used by the U.S. Conference of Mayors and Association of General Contractors indicate $1 billion should create 9,700 construction jobs, 4,600 jobs for suppliers such as mining companies and manufacturers and 14,300 "induced jobs" those new workers create by spending.

Infrastructure spending is smart, Giertz said. But the multipliers used to predict job creation? "It's almost always wildly over estimated," he said.

One problem: Multipliers usually don't take into account that taxes used to finance government projects would have been spent or saved elsewhere if they hadn't been siphoned away.

• Quinn said $43 billion the state is spending on the Illinois Jobs Now! public-works program and the Move Illinois toll way construction project are "supporting more than half a million jobs."

Anderson, his spokeswoman, said 439,000 jobs would be created over the next six years through the $31 billion Illinois Jobs Now! project, plus 130,000 construction jobs and 120,000 permanent jobs courtesy of the $12 billion toll way project. That's a combined 689,000 jobs.

Giertz isn't buying it. "What do we have, six or seven million workers in Illinois? Seven or eight percent of all the jobs in Illinois are from the toll way?" he asked.

The state actually has 5.78 million non-farm jobs, according to the state Department of Employment Security. So 689,000 jobs actually would be more than 10 percent of all jobs in the state.

For comparison, Illinois' construction sector currently employs 185,000, and the state's sizable manufacturing sector employs 583,600 people.

• In his State of the State speech, Quinn said changes made to the state worker's compensation system are "saving business millions of dollars in insurance premiums."

In this case, Quinn understates the state's success in an issue that has been a sore spot for Illinois business and job creation.

The National Council on Compensation Insurance sets advisory insurance rates that are widely followed. The council dropped rates in Illinois by 8.8 percent in response to the reforms, according to Terri Robinson, the council's state relations executive. That saved companies doing business in Illinois $277 million on premiums, a figure that doesn't include the self-insured.

"And that's not necessarily all of the savings that will result from that reform, it's just all that we could quantify," Robinson said.

• Another claim by Quinn was that expansion of the state's clean energy economy has created 10,000 "green collar" jobs.

Anderson said the governor was referring to jobs created by more than $100 million in stimulus funding from the U.S. Department of Energy, money that helped pay for 137 projects focused on things like alternative energy and energy efficiency.

But green jobs can be defined many different ways, making the claim tough to verify. Under federal standards, bus drivers can qualify since passengers aren't driving their own cars, said Don Haughton, a spokesman for the federal Bureau of Labor Statistics.

The Department of Energy says that data from a private firm that tracks "clean energy" employment shows that Illinois added 6,618 jobs in 2012.

"This is tricky," Haughton said.

• In the budget address, Quinn touted an article in Site Selection magazine that he said ranked Illinois "the fifth best location in the country for new and expanded corporate facilities."

The magazine – published by a business trade group, the Industrial Asset Management Council – annually ranks states by the number of new and expanded corporate facilities that cost at least $1 million, employ at least 50 people and have at least 20,000 square feet of space.

Quinn's right – Illinois was No. 5, behind Texas, Ohio, Pennsylvania and Michigan. In general, though, the criteria reward states with big populations that rely heavily on large employers. Michigan and Illinois are both near the top despite high unemployment. Small states, even those with thriving economies like the Dakotas, usually are at the bottom.

Other organizations have their own measures of state performance. Last year, Chief Executive magazine ranked Illinois 48th for overall business climate.

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