This particular ruling by PolitiFact Florida (as written by Katie Sanders) concerns the refusal of Federal money by Florida’s new Governor Rick Scott for high speed rail. Corrine Brown, a Democratic representative from Jacksonville, stated that as a result Florida would lose “60,000-plus jobs for Floridians” for which PolitiFact gave her a “False.” But was “60,000-plus jobs” estimate by Brown really so false?
According to Brown’s congressional speech on YouTube, she said specifically that the Florida High Speed Rail program “will put over 60,000 Floridians to work.” So, did Brown preface these jobs by saying:
• “permanently?”
• “permanently?”
• “full time” or “part time”?
• “occurring immediately or over time?”
And she does not use 60,000 in issued statements, as provided by PolitiFact source links: (emphasis added)
Certainly, to offset Florida’s unemployment rate, which is stuck at 12%, investment in our state’s infrastructure system is essential. The reasoning is simple: investment in transportation and infrastructure creates jobs, and, according to the Department of Transportation, for every $1 billion invested in infrastructure projects, over 42,000 well paying jobs are created.
And according to Florida DOT and the Florida High Speed Rail Association, the construction of what was projected to be merely the first high speed rail line, from Tampa-Orlando, was estimated to produce nearly 75,000 construction jobs, as well as numerous positions to operate and maintain the trains once the system was in place.
In economics, there is a term called the “multiplier effect” which applies to projects of this type, particularly in view of the distinctly Keynesian government funding:
When the government buys $20 billion of goods from Boeing, that purchase has repercussions. The immediate impact of the higher demand from the government is to raise unemployment and profits at Boeing. Then, as the workers see higher earnings and the firm owners see higher profits, they respond to this increase in income by raising their own spending on consumer goods. As a result, the government purchase from Boeing raises the demand for the products of many other firms in the economy. Because each dollar spent by the government can raise the aggregate demand for goods and services by more than a dollar, government purchases are said to have a multiplier effect on aggregate demand.
This multiplier effect continues even after this first round. When consumer spending rises, the firms that produce these consumer goods hire more people and experience higher profits. Higher earnings and profits stimulate consumer spending once again and so on. Thus, there is positive feedback as higher demand leads to higher income, which in turn leads to even higher demand. Once all these effects are added together, the total impact on the quantity of goods and services demanded can be much larger than the initial impulse from higher government spending.
We don’t know if the estimates take this multiplier effect into account. It may be included in estimates of “indirect” jobs. But it certainly drives any estimates of direct job creation much higher.
Supposedly, Scott will instead invest in other infrastructure projects in Florida: (emphasis added)
Scott, meanwhile, announced plans to fully fund a $77 million shortfall for a Port of Miami dredging project to deepen the port so larger ships can enter it.
The port expansion project will ultimately bring 30,000 jobs to the state. Scott said.
"This is the type of infrastructure project that will pay permanent, long-term dividends, and provide a solid return on investment for Florida's taxpayers," Scott said.
The $77 million appears to be “matching funds”—so the 30,000 jobs (33,000 jobs by other estimates) are to be brought about by a mere $155 million investment, all for dredging the Port of Miami. Like the high speed rail jobs, this is probably a similar “job-year” estimate. Considering this and the Department of Transportation estimate of 42,000 well-paying jobs created for every $1 billion invested for any infrastructure investment (which, for $2.4 billion, would be over 100,000 jobs), why should this estimate of 60,000 jobs by Corrine Brown be considered a “false” one?
Finally, let’s consider this quote from Sanders’ PolitiFact write up itself on the “most optimistic” estimate: 'that's 49,900 "job-years" created over a five-year window.' Looking at our previous margins of error for numbers claims in arriving at PolitiFact Truth-o-meter rulings, that’s 17% off…. compared to 13% off for a Republican “Mostly True” claim, with an “optimistic” divisor similar to the 49,900 job years.
So Sanders graded Brown on a statement, selecting (selection bias?) her own specifics where Brown made no specifics, did not determine anything based on an “optimistic” number, and did not consider generic “on average” estimates of job creation from infrastructure investments. In other words, this ruling wasn’t fair to Brown. “Half True” would have been a more reasonable ruling.
By the way, has PolitiFact (Florida) rated Scott yet on his 30,000-job claim for the Port of Miami dredge project? Nope. Hmmmm.
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