ECONOMIC IMPACT OF JAXPORT: JOBS AND EMPLOYMENT
In a period of economic crisis and high unemployment, the promise of job-generating projects and economic development strategies can prove highly appealing. As the United States has experienced a steady decline in the proportion of employment and economic activity in goods-producing manufacturing there has been a corresponding increase in the proportion of employment and economic activity in the service sector and goodsmoving logistics industry. One national-level question has been whether the industries experiencing employment expansion provide the same quantity of jobs, and quality of compensation and economic security, as those that have been lost or that are slowly disappearing.
The single most common argument made in favor of JAXPORT expansion and infrastructural investment is job growth. That is, a significant benefit of the JAXPORT expansion – both the infrastructure projects and the continuing operation of the port – could be the generation of new, and the expansion of existing, job opportunities for residents of the region and beyond. This fact alone often trumps any other considerations or objections related to excessive infrastructural costs or environmental consequences.
Most of the information about jobs projections and economic impact comes from JAXPORT. In assessing the claims, and weighing the larger costs and benefits to the community, it is important to consider both the quantity and the quality of employment opportunities. JAXPORT has persistently communicated, through its promotional materials, that “JAXPORT Equals Jobs”. More specifically, JAXPORT consistently asserts that Jacksonville’s port “generates 65,000 jobs” and “these positions provide an average salary of $43,980, well above the Jacksonville average of $27,215”.
These are lofty claims and, if accurate, they would make a strong case for the pursuit of an urban development strategy that revolves around port logistics. The importance of getting the facts straight is quite critical because these figures are routinely used by JAXPORT proponents, local boosters, city officials, and even the mayor of Jacksonville to make a case, and garner support from lawmakers and the public, for the investment of up to a billion dollars of federal and local funds to deepen and reengineer the St Johns River channel.
Where do these job and income figures come from? JAXPORT did not invent them. They are taken from a 2009 economic impact study conducted by Martin Associates.The figures, therefore, have an empirical basis but they are often used inaccurately. We can begin with the claim that the port supports 65,000 jobs. From this the average citizen might conclude that 65,000 workers in the Jacksonville or northeast Florida region depend upon JAXPORT economic activity for their livelihood. A cursory examination of the actual report prepared by Martin Associates would alert one to the erroneousness of such a conclusion.
To gain a more accurate assessment, it is necessary to first consider the model used by Martin Associates to estimate the economic impact of a maritime port.
As it pertains to employment, the model estimates four job categories: direct jobs, induced jobs, indirect jobs, and related user jobs. Direct jobs are “those jobs with the firms directly providing cargo handling and vessel service” or “those that would not exist if activity at the Port’s…cargo facility were to cease”. Induced jobs are those that exist as a result of the demand for goods and services stimulated by the spending of workers occupying the direct jobs. This can include retail sector employment (e.g., based on the spending of direct job workers in grocery stores or restaurants) as well as the jobs in the wholesale sector that supplies the retail enterprises. Indirect jobs are those in the businesses that provide goods and services to the firms generating the direct jobs (e.g. office supplies, utilities, construction, etc.). Related user jobs are those with import, export (shippers and consignees) and distribution industries that send cargo through seaport terminals.
For related user jobs, Martin Associates is very explicit regarding the fact that “Related jobs are not dependent upon the seaport marine terminals to the same extent as are the direct, induced, and indirect jobs since it is the demand for the final products which creates the demand for the employment…not the use of a particular seaport or marine terminal.”
It is important to emphasize that there is nothing unusual or unorthodox about this economic impact model. The methodology used by Martin Associates is regarded as one conventional standard for such economic impact studies. Including induced, indirect, and related jobs provides a more complete picture of the potential contributions to economic development across the entire regional, state, and national economy. However, for most people interested in knowing about the employment-generating prospects of the local port, what they usually have in mind are the direct jobs (rather than induced, indirect, or related) for local residents. Looking exclusively at the direct jobs data paints a radically different picture from that suggested by JAXPORT.
Table 1 presents the employment impact data that are included in the Martin Associates report for the different job categories. What is most striking is the fact that of the total employment “supported” by Jacksonville’s cargo seaport, only 13.8% or 8,965 jobs are of the “direct” variety. In contrast, the vast majority – wholly 65.8% or 42,647 – are found in the “related job” category which, as Martin Associates emphasizes, “would not likely disappear if the marine terminals were rendered inoperable or closed to marinecargo or vessel/barge activity”.
None of this should minimize the significance of an industry that generates close to 9,000 direct jobs, with 79.4% held by residents of Duval County. Adding the induced and indirect jobs brings the total to 22,209 jobs. In addition, the Martin Associates report estimates $1.8 in direct, indirect, and induced personal wages and salaries, and $130 million in state and local taxes, generated by the Jacksonville Port District terminal activities. Again these are significant contributions to the health of the state and regional economy. However, it is always important to keep the numbers in their proper context and to avoid unwarranted conclusions and misleading inferences.