The Corbett Administration’s claims that an ethane cracker would lead to “20,000 permanent jobs” in western Pennsylvania are based on a study conducted by the American Chemistry Council, an industry trade group that counts Shell Chemical as a member.
The state has not conducted its own research into the matter, as the Tribune-Review reported earlier this week.
The American Chemistry Council claims a plant would lead to 17,541 new jobs. It divides them into three classes: direct, indirect and induced.
Neither the group’s one-page fact sheet or a longer three-page document – you can read both at the bottom of this post — explain the study’s methodology, but American Chemistry Council Chief Economist Kevin Smith told StateImpact Pennsylvania he and two other researchers used Mig Incorporated’s IMPLAN economic model to make projections.
The direct jobs are pretty easy to describe: They’re the people who would be employed at the cracker and other plastics manufacturing facilities, according to Smith. The indirect jobs are the “people who supply the valves and motors” and other materials needed during manufacturing, he explained.Smith’s model predicts a cracker would create 2,396 “direct” jobs, even though just 400 to 600 people would be employed at the Shell plant itself. The study anticipates 8,194 indirect new jobs. The remaining 6,951 jobs would come from the “ripple effect” of increased economic activity driven by the people who move into the Beaver County area.
Or move into Ohio, or West Virginia. Or perhaps Louisiana. The American Chemistry Council didn’t just research the impact of a new ethane cracker being built in Pennsylvania. Smith and two colleagues put together similar reports for eight other states, too.
A one-page fact sheet nearly identical to the one the Corbett Administration has been distributing to reporters is available for eight other states. (All nine are posted below.).
The number of predicted jobs varies from state to state: The American Chemistry Council estimates a new cracker would create 81,000 positions in Texas, but just 12,000 in West Virginia. Smith said the variation is “because the state economies are structured differently. Probably the best example would be Pennsylvania vs. West Virginia,” he said. “There’s a large manufacturing sector in western Pennsylvania. A lot of equipment could be supplied in Pennsylvania plants. In West Virginia that’s not the case. So the jobs…would be higher in Pennsylvania than they would be in West Virginia.”
A Corbett Administration spokesperson told the Tribune-Review the governor is using the American Chemistry Council’s figures because the Department of Labor and Industry hasn’t finalized its own study.
The American Chemistry Council’s One-Page Fact Sheets
The Council’s Longer Pennsylvania-Focused Report