How Many Jobs Will the Arena REALLY Create?

January 14, 2010 at 2:05pm By: Mr. Wilson Posted in The Lincolnite Blog

Expect to hear a lot from Citizens FOR Jobs and the Lincoln Haymarket Arena in the coming months. And expect me to pick on them over those months, at least if they keep spreading dubious “facts” about the arena.

Consider the number of jobs they claim the arena will create. I’ve picked on this before, but it bears repeating. The group claims: “In the future, the Lincoln Haymarket Arena will add more than 1,000 permanent jobs at the arena and in the surrounding retail, commercial and residential area.” There are several problems with the number, but let’s focus on three.

First, note that “jobs” is a fuzzy term. What is a job? Is it an FTE? Any position that earns any money? Without a good definition the term has little “punch” and supplies very little value to the discussion.

Second, we don’t know what sort of assumptions have been made to generate the “more than 1,000” value. Starting assumptions are extremely important. Assumptions about what is possible very often differ substantially from what eventually transpires. The assumptions that drive these figures almost always overestimate the good and underestimate or bury the bad. As long as the assumptions are transparent we can deal with that and make decisions accordingly. If the assumptions aren’t made known the figure is worthless.

Last, note this wording carefully: “the Lincoln Haymarket Arena will add more than 1,000 permanent jobs at the arena and in the surrounding retail, commercial and residential area”. It does not say “the Lincoln Haymarket Arena will add more than 1,000 permanent jobs to the community”. In other words some of these jobs—we have no idea how many—will simply be transferred from one area of the community to the other. That’s a hugely important distinction. Some of these jobs will no doubt be truly “created” in the sense that they would not have occurred had the arena not been built. But others—some? many? most?—will not. If Cheesecake Factory comes to town because of the arena, then we can say those jobs were “created” by the arena. If, on the other hand, Cheesecake Factory would have come here regardless, then the arena does not get to take credit for creating those jobs. However, due to the wording noted above the arena supporters still get to count those jobs toward their total.

Further note that the same is true for the arena’s overall economic value to the city. Some economic value will be “created” by the presence of an arena and surrounding developments. But not every dollar that ends up in the arena and its environs will in fact have been “created” by the arena. Some of the money will simply be transferred from elsewhere. That restaurant that could have gone in at Fallbrook will instead go in the Haymarket; the apartments that could have gone into Antelope Valley will instead go into the Haymarket; and so on. The exact same thing happens with every major development around town: some new economic value is created, and some of the economic activity could just as easily have located elsewhere.

I’ve stated this before but I’ll say it again: don’t misinterpret these sorts of comments as indicators that I’m rabidly anti-arena. I’m not. I simply demand honesty and transparency so voters can make the best decision possible. Once the formal anti-arena groups really get going—I’m sure we’ll hear more from them very soon—I will probably pick on them just the same. That’s what I do. Now you folks get to do what you do so well: argue amongst yourselves grin

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The Comments

Steve January 14, 2010 at 5:52pm

I guess I’m in the “who knows?” crowd.  Whether that means “who knows whether property tax would be needed 10 years down the road?” or “who knows how many jobs this might create?”.  It could be argued “‘til the cows come home.”

I’ll just go with a gut feeling on this one, but I’m a simpler-type guy.  I’ve got a great life because of that, so I’ll continue with that attitude and believe the arena is a plus.

Fletch January 14, 2010 at 8:38pm

I think it’s all fuzzy math, but I think to move this city forward, the arena HAS to be built.

JT January 15, 2010 at 1:25pm

Agreed. I’m no statistician but putting 7000-16000 people in the Haymarket 30+ times a year will create some jobs. All that traffic is wasted at Devaney. I also know that if we don’t build the new arena we will lose State Basketball in the next few years, that would be another big blow.

Jen January 15, 2010 at 2:21pm

I totally agree with Fletch.  Our city HAS TO start being more progressive!

meatball January 15, 2010 at 4:15pm

Agree with all, no one actually can know for certain until it happens.

The pro-arena groups likely will somewhat overestimate, while the anti-arena groups will grossly (I say grossly, because of the overall gloom and doom bent of the hardcore naysayers) underestimate.

Get it built! The sooner, the better!

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