Jobs Are A Cost Of The Keystone XL Pipeline, Not A Benefit – Forbes

As usual when discussing a project the political world has got the relationship between jobs and costs entirely the wrong way around. Donald Trump, and others, are waving around job creation numbers like a toddler showing Mommy how the toilet training is going along. Proud pointing to all the good work being done here. Which is to entirely miss the point about jobs and projects–the number of jobs created by a project is a cost of that project, not a benefit of it. We would thus very much prefer to minimise job creation, not maximise it. That is, we should hope that the people saying Keystone XL will produce 35 jobs are correct, not the people touting 20 and 30 thousand.

But, you know, it’s traditional to get this wrong:

And Trump’s touting of the number of jobs to be created by the project – hyperbolic by most estimates – could also draw increased scrutiny to its economic benefits, particularly for the blue-collar tradesmen whose lot the president has promised to improve….(…)…Trump claims the number would be 28,000, and TransCanada promises 13,000 in construction alone, while the Obama-era State Department slims that estimate down to about 3,900 – and just 35 permanent ones. Opponents of the project have pointed out that drastic difference between permanent and temporary work in accusing advocates of inflating job-creation numbers…

My colleague Ellen Wald has a good review of how many jobs will be created where. But it is still true that we must consider those construction jobs to be a cost, not a benefit, of the pipeline project. On the useful logical grounds that they are a cost.

At one level this is entirely obvious. The pipeline builders are going to have to pay the workers to come and do those jobs. If you’ve got money going out that’s a cost. Jobs are therefore a cost, obviously so. But there’s another economic level to this as well. The true price of something is what you must give up to get it. If we’ve 35, or 28,000, jobs on the pipeline then that’s 35, or 28,000, people not doing something else. The price to us, the cost to us, of the pipeline is thus the loss of the other things those 35, or 28,000, would produce in the absence of their working on the pipeline.

Given that pretty much all of them are going to be construction workers that means something else that doesn’t get built. Say, just for the lolz, that without the pipeline we’d have a project to turn Route 66 into the Chuck Berry Memorial Highway. If we don’t have the pipeline those construction workers can build the highway. If we do have the pipeline we can’t have the highway. The cost of Keystone to us is therefore the absence of the Chuck Berry Memorial Highway.

That is, all this chest beating about how many jobs Keystone XL will create is entirely the wrong way around. For jobs are a cost of the project, not a benefit.

Jobs Are A Cost Of The Keystone XL Pipeline, Not A Benefit – Forbes