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25.QUESTION
Quiz - Current Event with The multiplier effect
; Write a short paper. Using news sources, search for recent examples of major investments in a local or regional economy of interest. These might involve the establishment of a new facility or the announcement of investment in an existing facility. Examine the stories carefully. Answer the following questions:
How many jobs are seen to be directly associated with the investment?
How many jobs will be created beyond those directly associated with the facility?
Using these figures, you can estimate the multiplier associated with each investment, what is the multiplier?
How do the multipliers compare between different cases of investment?
To further investigate the question of input-output linkages please explore the Economic Input-Output Life Cycle Assessment Model:www.eiolca.net/
The Green Design Institute at Carnegie Mellon University has created an Economic Input-Output Life Cycle Assessment Model that allows you to investigate the materials and energy resources required for different economic activities. The online user-friendly model allows you to select a sector of interest and then determines the inputs required to produce a certain amount of the product. In addition to the material linkages the model also specifies the environmental impacts of different activities.
| Subject | Business | Pages | 5 | Style | APA |
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Answer
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Current Investment Event with the Multiplier Effect
This short describes the multiplier effect of the following two investment events/ projects, with particular emphasis on job creation; the Long Island Rail Road Project, and the Second Avenue New York City Subway project.
Direct Job Opportunities associated with each Project
The Long Island Rail Road project is an ongoing transportation project that is expected to improve commutation between Long Island and the east side of Manhattan (De Lea, 2019). As one of the most expensive projects in the region, the LIRR is expected to be completed in 2022 at a cost of approximately $11 billion (De Lea, 2019). The Long Island Rail Road project is an ongoing transportation project that is expected to improve commutation between Long Island and the east side of Manhattan (De Lea, 2019). As one of the most expensive projects in the region, the LIRR is expected to be completed in 2022 at a cost of approximately $11 billion (De Lea, 2019). Since its revival commenced 30 years ago, LIRR has created thousands of jobs both in construction and operation, and is set to create additional jobs once it becomes fully operational in 2022. Regarding the jobs created during construction, the LIRR has awarded $6.95 million worth of contracts to the joint venture of Gannett Fleming and AECOM, which has in turn subcontracted workers to carry out an environmental review, community engagement in the project expansion, and preliminary engineering works. The project has also employed approximately 12,000 workers who work as train operators and rail maintenance among other operations and services.
On the other hand, the Second Avenue Subway is an 8.5 miles two-track line subway system under construction in New York City (De Lea, 2019). Started in 2007, phase one of the project was completed in late 2016 at a cost of approximately $4.5 billion. The subway is expected to be fully operational in 2029 when phase two will be completed at an additional cost of $4.5 billion (Railway Technology, 2017). According to Plitt (2017), extension of the subway from Hanover to Harlem, and New York to New Jersey will create close to 16,000 and 15,000 direct jobs.
Indirect Job Opportunities associated with each Project
By increasing East Side access, LIRR will enable residents of Suffolk and Nassau to access more than 540,000 jobs in Manhattan (Regional Plan Association, 2013). Construction of the LIRR has also seen emergence of shopping malls, business centers, eateries, and office parks along the highway corridors, which has led to creation of approximately 125,000 jobs. In comparison, the Second Avenue Subway is set to create nearly 19,000 indirect jobs in the region, and additional 150,000 jobs in connected regions (Plitt, 2017). Other indirect jobs associated with each of the two investment projects, particularly at the construction stage, include mining, manufacturing and transportation of construction materials.
The Multiplier Effect Associated with each Investment
The Long Island Rail Road project
Approximate Direct jobs: 12,000
Approximate Indirect jobs: 665,000
Multiplier effect = 665,000 ÷ 12,000 = 55.40
The Second Avenue Subway
Approximate Direct jobs: 31,000
Approximate Indirect jobs: 170,000
Multiplier effect = 170,000 ÷ 31,000 = 5.48
How the Multiplier Effects Compare
The Long Island Rail Road investment has a multiplier effect of 55.40 in job creation, whereas the Second Avenue Subway has a multiplier effect of 5.48.
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References
De Lea, D. (2019, May 16). Most expensive US infrastructure projects. Retrieved October 14, 2020, from https://www.foxbusiness.com/economy/most-expensive-infrastructure- projects
Plitt, A. (2017, January 25). Second Avenue subway may be one of Trump’s infrastructure priority projects. Retrieved October 14, 2020, from https://ny.curbed.com/2017/1/25/14382858/second-avenue-subway-nyc-infrastructure- trump-administration
Railway Technology. (2017, January 19). Second Avenue subway, New York. Retrieved October 14, 2020, from https://www.railway-technology.com/projects/second- avenue-subway-new-york/
Regional Plan Association. (2013). How the Long Island Rail Road Could Shape the Next Economy. Available at https://www.rauchfoundation.org/files/9913/5818/7008/How_the_LIRR_Could_Shape_t he_Next_Economy.pdf