Monday, March 17, 2014

Pick your pipeline to job numbers

An interesting article was in US News and World Report by Alan Neuhauser that talks about the Keystone XL and how many jobs it may create.  According to the article the "State Department [...] has said the pipeline would create the equivalent of 3,900 full-time construction jobs if it's completed in one year, or 1,950 if it’s done in two years. TransCanada, the company hoping to build the pipeline from oil sands in western Canada to refineries in the U.S., has come to a far different conclusion. It says the project will create about 9,000 part-time, temporary and full-time construction jobs. It hasn't said how many permanent jobs it will provide once construction's complete." The full article can be found here:

http://www.usnews.com/news/articles/2014/03/14/in-calculating-keystone-xl-jobs-no-easy-answer

So, as the article asks, why the disparity?

It comes down too how do they do the numbers. What should be a straightforward equation could be calculated in different ways.  The State Department count is based on full time equivalents, which would count a welder who worked on the pipeline for six months as half of a full time equivalent.  TransCanada, on the other hand, counts the total number of jobs created, irrespective of the time working.  So that same welder would count as one job in their tally. 

In some respects they each could be right, depending on what outcome you are looking for.  If you are looking to see how many total jobs you could create than TransOcean's method.  If you are looking at jobs that pay all year round, than the State Department's method works better. Which is better to truly measure job creation, is something for another blog post.

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