Calculation of AFRC’s Job Creation Approved by USCIS
Calculation Of Employment, Output And Labor Income
The AFRC’s econometric analysis calculates the permanent increase in employment, output, and labor income by industry classifications for each of these five in dustry economic clusters. The number of permanent new jobs created consists of the following components:
- Indirect and induced jobs (but not direct jobs) from construction of the new facilities. The underlying estimates of direct jobs – which are not included in the total job count but are used as the basis to determine indirect and induced jobs – are based on the number of square feet, construction costs for the indicated county, and output per construction worker for each county.
- Direct new jobs for the operation of each of the new facilities. For office buildings and laboratories, these are based on the number of square feet for each facility divided by the number of square feet per employee. For manufacturing facilities, these are based on the total investment cost, the capital/output ratio for that industry, and output per employee for each industry and region. For retail and service facilities, they are based on the number of square feet per employee taken from national surveys.
- Indirect and induced new jobs from the operation of each facility, as calculated with the methodology approved by USCIS, using multipliers for the county groups.
Job Creation Through The Economic Results
The direct employment stimulus leads to additional job creation through indirect effects.
Direct Effects
Represents the impacts for the expenditures and/or production values specified as direct final demand changes.
Indirect Effects
The iterative effect on the local economy – as local firms enjoy higher revenues, they in turn demand more from their intermediary suppliers. These indirect effects are captured in our model.
Induced Effects
Induced effects are defined as the effects of household spending on the local economy. It is important to delineate the positive contribution that new workers provide to the increase in area household income and the corresponding effect these increases have on job creation. The econometric study has estimated the effects separately to allow the analyst to pre-determine how much income actually goes into the economy and thus the overall economic effect.
Output
The Output of an economy is the amount of production in dollars, including all intermediate goods purchased and value-added (labor, capital & profit). We can also think of output as sales for both final goods and services and intermediate goods and services. Output is dependent upon consumption in the area, state government spending, investment and exports of the industries in the region.
Employment
The Employment variable in the model is made up of historical data from the Bureau of Economic Analysis (BEA).
Population
Population is a key variable in the model regional analysis that affects the potential labor force, government spending and consumption.