The Mike Bertelsen Project

The talk in Illinois politics since mid-April has been centered around the capital plan proposed by Governor Blagojevich. Recently the governor had dropped the plan from $34 billion to $25 billion. Just how many jobs will the capital plan create? Depends on who you ask! First, there is the 611,000 jobs number when the plan was estimated at the $34 billion level. But now where are we when it comes to the jobs number with the reduction?

Southern Illinois University economics professors Subhash Sharma and Basharat Pitafi were asked to calculate the capital program’s economic impact on Illinois at the behest of SIU President Glenn Poshard. Mr. Poshard and Dennis Hastert, former U.S. House Speaker were chosen by Blagojevich to negotiate with legislative leaders on the capital bill. Sharma came up with numbers for three versions of an Illinois capital bill: $25 billion, $30 billion and $35 billion. His estimated job creation tallies ranged from 443,596 to 611,024. The last number is the usual figure touted by proponents of the capital bill.

The effect of money can be measured as it flows through the economy and theoretically creates more jobs. Jobs are divided into three categories: direct, indirect and induced.

• Direct jobs are those tied directly to the construction projects that would be funded in the capital bill. A construction worker hired to build a road or school is a direct job.
• Indirect jobs are a step removed, but still tied to construction. For example, a concrete company buys more cement because of the capital program, and the cement supplier then has to hire additional workers.
• Induced jobs are those created because the construction workers are spending money from their new jobs. The people hired for induced jobs then spend their money and create more new jobs, and so on. If the construction worker and his friends started taking their families out to eat regularly because they can afford it with their new jobs and the restaurant had to hire additional help, those would be induced jobs.

One other item to consider: the study is using numbers of jobs, not people working. Say for instance if an employee on a job site gets done in Peoria and then goes to Rockford to another job site, that's two jobs and one working.