Where are the Jobs?, a report issued independently yesterday by Murtaza H. Baxamusa, Director of Planning and Development at the Family Housing Corporation, San Diego Building Trades; and an adjunct faculty at the Sol Price School of Public Policy, University of Southern California, examines the claim made by the city of San Diego that a proposed Convention Center expansion would create 7,000 new jobs.
Baxamusa finds fault with the numbers, saying the actual count of permanent jobs created by the project is closer to 4,500. He first points out that the methodology used in determining the economic impact of tourism-related development is flawed in that it does not distinguish between full-time, part-time, and seasonal work, counting only the total number of “jobs” created.
The jobs figures are also based on a misleading estimate concerning average spending on lodging per convention attendee. In 2009 this was estimated at $604-672, though that figure was revised down to only $475-492 in 2010. Even though the new estimates were well over $100 per attendee lower, none of the figures in any reports, fact sheets, or presentations were revised by Mayor Sanders to reflect the updated numbers. Indeed the original jobs estimate (which actually claims 6,885 new jobs will come from the project) was used in a memorandum that was presented to the city council as late as November 4, 2011.
Another problem with estimates provided by the 2009 consultant study that is being used to promote the project is the assumption that all spending by tourists is captured locally. Baxamusa cites Professor Daniel Stynes at the University of Illinois at Urbana-Champaign in a study prepared for the Illinois Bureau of Tourism in finding that approximately 60-70% of tourist revenue is actually captured by the tourist destination. Other money goes to those producing goods outside the region that are consumed there by tourists, plus the transportation costs and retail/wholesale markup of goods.
For example, when a tourist purchases a package of batteries for a digital camera, the entire cost of those batteries is considered to go toward boosting the San Diego economy and creating local jobs, even though it’s unlikely the batteries were actually produced locally, meaning at least a portion of their cost is actually benefitting an economy elsewhere.
Beyond questioning the number of jobs that will be created, Baxamusa also criticizes the quality of the work that would be offered. He points out that many low-paying or transient jobs create a “hidden tax” paid by the rest of society when workers are forced to rely on publicly funded or subsidized clinics or programs such as Medicare and Medi-Cal for health care, or to collect welfare benefits to supplement meager earnings.
Baxamusa estimates that over 3,800 temporary but well-paying construction jobs will be created while the expansion is being built. But he notes that due to the nature of the industry, where many workers go through stints of unemployment between construction projects, approximately 32 percent, or an estimated 1,222 construction workers would be without health insurance. These individuals, according to a UCLA study on the cost to society of uninsured workers, would cost the public about $1.2 million.
A view on the permanent jobs created by the expansion is even bleaker. According to the city’s estimate, only 16.8 percent of new jobs would be at or above the regional median wage. The city believes that fully 71.2 percent of the jobs would be below the self-sufficiency wage of $13.92, which is the minimum needed for a single adult to support oneself, assuming he or she has employer-provided health care and no children. Baxamusa’s figures in these areas are slightly more optimistic, largely because he does not believe that many of the low-paying jobs the city is claiming will be created will actually materialize.
While these low-paying jobs will contribute to lowering the region’s median wage overall, those earning less than 80 percent of the median may be eligible for housing assistance in the form of a Section 8 voucher. Taking the city’s estimates, 87 percent of the new jobs created will go to individuals who will still qualify for this assistance after going to work. Further, employees in the new positions may also qualify for public benefits such as food stamps, free or reduced-price lunches for their children, low income energy assistance, and other programs.
“The expansion of the Convention Center presents a timely opportunity for San Diegans to avail of good careers in construction and local permanent jobs during its operation,” concludes Baxamusa. “However, the results of this study indicate that the quality of jobs created by the project may actually depress wages, increase uninsurance and lower the standard of living in the region. As our elected leadership struggles to find a solution to expand the Convention Center, they need to ensure that the community benefits from this project by creating good jobs with decent wages and healthcare benefits. This is a determining factor in the success of the project.”