New study shows one aggregates job creates five more jobs Go back

Saturday, April 8, 2017

Therese Dunphy

March 6, 2017  Aggregates Manager  Read Original Article

Michael W. Johnson, NSSGA president and CEO, reviews the report with George Ford, Ph.D., chief economist for the Phoenix Center.

The next time some NIMBY asks you why you should be allowed to permit a new quarry, you can now give them a one-word answer: jobs.

While the permitting process is certainly more complicated than that, operators have a powerful new tool at their disposal when trying to describe the benefits of having a quarry in the community. A new report from by the Phoenix Center for Advanced Legal & Economic Public Policy Studies scientifically quantifies the economic benefits of the aggregates industry on the broader economy. And it is news worth sharing.

The Economic Impact of the Natural Aggregates Industry: A National, State, and County Analysis, released March 4, shows that each job in the aggregates industry supports an additional 4.87 jobs in the broader economy. To translate: the 102,000 jobs in the domestic aggregates industry drive an additional 496,740 jobs in other industries.

As President Trump works to pass his proposed $1 trillion infrastructure investment, key points in the study also make for excellent talking points with your elected representatives,  particularly as they relate to job creation and economic development.

To capture the aggregates industry’s impact on the broader economy, researchers used a proprietary multi regional social accounting matrix developed by Economic Modeling Specialists International (Emsi) to estimate the ripple effect of various factors, including how additional infrastructure investment might impact the broader economy. The model also accounts for both supply-chain impacts (direct and indirect effects) and increases in household income (induced or spin-off effects).

The results? On a national level, the industry was found to support $122 billion in sales, $32 billion in wage, and between 364,000 and 600,000 jobs. Additionally, each job in the aggregates industry supports an additional 4.87 jobs throughout the economy, each dollar in wages creates another $4.19 of wages in other sectors, and each dollar in industry sales produces another $3.47 of sales in other industries.

On a state level, the average jobs multiplier was smaller than at the national level, 2.34 compared to 4.87, however there is quite a bit of variation from state to state. Ford said variables such as the size of the state, number of operations, and type of commodity (crushed stone vs. sand and gravel) create subtle differences that impact the multiplier in each state. 

On the county level, the report studies three counties: Larimer County, Cold.; Lancaster County, Pa.; and Talladega County, Ala. It compares two states of the county economy: one with active quarry operations versus a hypothetical alternative of one without active operations. Once again, the difference between areas – such as rural versus urban areas – created a difference in the economic impact.

“A lot of the effect, particularly for your industry, comes from the above average salaries,” Ford says. “We’re counting what happens when people spend their income. If you live in a rural area, it’s likely that you may spend your money elsewhere.

He cited the examples of two quarries, one near the Birmingham airport and one near the Chicago O’Hare airport. “That’s going to be a wildly different experience in terms of the economic impact,” Ford said.

In Larimer County, the operations added 100 jobs to the economy, and local, state, and federal governments each gain $450,000 in tax revenue.

In Lancaster County, the operations added 234 jobs, the local and state government each receives nearly $2 million in tax revenue, and the federal government receives about $2.4 million in tax revenue.

In Talladega County, the operations added 155 jobs, the local and state governments each received $1.8 million in tax revenues, and the federal government receives $1.5 million in tax revenues.

One particularly important point that came from the study is the duration of an aggregate operation’s economic impact. “These benefits last for an extended period of time,” Ford says. “These aren’t jobs for two years. These can be jobs for 200 years.”

When dealing with government officials on multiple levels, this study shows that aggregate operations not only create long-term jobs but also much needed revenue streams for  local, state, and federal bodies. The report offers a powerful communication tool for operators throughout the United States.

Aggregate Facts

Did you know that for straight gravel hauls with minimal traffic, the price of aggregate increases $0.15 per tonne for every mile from the extraction site? Close to market reserves is one way the aggregate industry reduces environmental footprints and risk of accident.