There's a point toward the bottom of our colleague Steven Mufson's excellent analysis of the economics behind the proposed Keystone XL pipeline that is worth digging deeper into.
From the moment the pipeline was first proposed (shortly after the economic collapse that led to the recession), a key argument used in its favor was job creation. The numbers of jobs that would result meandered within a fairly loose set of boundaries for a long time. When the pipeline was being debated in 2011, politicians talked about tens of thousands of jobs being created, in ranges from 20 to 100 thousand -- figures that often included indirect jobs (support, local commerce, etc.).
That range is still being discussed. TransCanada, the company that hopes to build the pipeline, said last week that 42,000 "ongoing, enduring jobs" would result. Senate Majority Leader-to-be Mitch McConnell (R-Ky.) was more vague in Tuesday's debate, saying the pipeline would "help thousands of Americans find work."
Mufson breaks down the numbers:
Citing the State Department final environmental impact statement, the lawmakers say the project would create 42,000 jobs.
But it takes the economy less than a week to create that many permanent jobs. What’s more, these pipeline jobs wouldn’t be permanent. The State Department report uses the notion of “job years.” So the project, which is expected to take two years to build, requires 3,900 job years for the construction workforce, or 1,950 jobs that last over a two-year period. Another 26,000 jobs (or 13,000 over two years) would go to suppliers of goods and services.
Once the project is completed, operations would require 35 permanent employees and 15 temporary contractors, the State Department report says.
These numbers are worth breaking out. So far this year, the economy has added 229,000 jobs per month on average. If you look at the numbers weekly, the economy has added nearly 50,000 jobs for each of 2014's 46 weeks. Mufson's point: Even if the 42,000 figure were hard, fast, and long-term, the effect on the national economy would still be modest. But that figure isn't hard, fast, or long-term.
It's worth comparing the Keystone job estimates with the economy at large, for context.
- The jobs that would be created in support of construction -- those 13,000 goods and service jobs over two years -- amount to about three-and-a-half days worth of jobs so far this year.
- Over the two years, just over 16,000 job-years (42,000 minus the 26,000 indirect jobs) would be directly related to the project. That's 8,000 jobs a year -- just over what the economy has created each day in 2014.
- Actual construction jobs, as Mufson notes, total about 2,000 over the course of two years. (Those 2,000 are part of the 8,000 above.) That's as many jobs as are added to the economy every six-and-a-half hours or so.
- Once the pipeline is built, it requires 50 long-term employees. The economy has added that many jobs in 2014 every 10 minutes and 9 seconds.
For those out of work -- a difficult and frustrating experience -- the creation of any job that could offer a salary and benefits is worthwhile. The question for lawmakers is how to balance the jobs that would be created by the pipeline -- either 42,000 or 50, depending on your feelings about the project -- with other considerations, such as the environmental effects of increasing tar sands oil production. If we're talking about adding the same number of jobs by 2017 that would be added by building a Target, for example, that likely shifts the calculus.
Hardened cynics, we will also note one job-related reason that this issue is even being discussed today. When Sen. Mary Landrieu's (D-La.) political position became obviously tenuous after Election Day, Senate Democrats quickly began pushing forward Keystone XL approval in the hopes that it would help her chances in next month's runoff against Rep. Bill Cassidy (R). Between Election Day and December 6th, the economy will probably create over 200,000 jobs without the Senate doing anything. The question on Capitol Hill appears to be if the vote will save one short-term job: Landrieu's.