Economists say Tim Hudak’s “million jobs” promise is probably a math error

Economists say Tim Hudak’s “million jobs” promise is probably a math error

(Image: Ontario Chamber of Commerce) (Image: Ontario Chamber of Commerce)
 

Politicians “create jobs” the same way homeopathic medicines treat cancer—which is to say, they almost definitely don’t at all, but a certain percentage of the population will never be convinced of that. Political change can nudge job numbers in the right direction, but the economy, like the human body, is too big and complex to respond predictably to tiny doses of cure. And so Ontario Progressive Conservative leader Tim Hudak’s “Million Jobs Plan” has been highly suspect from day one. What’s more, economists are now saying that it may be flawed to the point of utter uselessness, largely because of a single mathematical error.

The skepticism is traceable to a recent David Reevely column in the Ottawa Citizen, in which Reevely points out that the number of jobs the Ontario PC party claims its policies will create doesn’t match those predicted by Benjamin Zycher, a right-wing U.S. economist commissioned by the party. A couple weeks later, Jim Stanford, a Canadian economist, wrote a blog post that studied the “million jobs” claim in more detail. According to Stanford’s analysis, the Tories may have drastically overestimated the employment impact of their proposed job-creation policy because of a fundamental misunderstanding of the difference between a permanent job and what’s known as a “person-year” of employment. (A person-year is an economic unit of measurement equal to one year of work for one person. So, one guy working one job for two years would account for two person-years of employment.)

By confusing person-years with jobs, Stanford says the PC party’s policy wonks effectively counted each new position eight times over, meaning around 200,000 of the promised one million jobs are completely fictional. And that’s before factoring in the impact of the 100,000 job losses that would occur if Hudak were to make good on his promise to cut public-sector employment in the province. All things considered, Stanford figures Hudak’s potential job impact at virtually nil. Writing in Maclean’s, Western University business professor Paul Boothe pegged the real job-creation number at 75,000. According to the Globe, McMaster University economist Michael Veall reviewed Hudak’s numbers and came to a similar conclusion. And all of this is assuming the numbers the PC party based its claims on—drawn from reports by Zycher and the Conference Board of Canada—were even accurate to begin with.

The lesson here, if there is one, is simple: if you’re going to use sketchy job-creation numbers, at least make sure you’re interpreting them right.