The bullshit 10,000 jobs claim
Eric Crampton writes:
On 5 February, MBIE’s head of the Provincial Development Unit, Robert Pigou, was reported claiming that the Provincial Growth Fund “was on track to create 10,000 jobs” – in contrast to National’s claims that the fund had created only a handful of jobs to that point. I assumed that MBIE had run an economic forecasting exercise to estimate the effects of their various initiatives, and I wanted to know whether their assumptions had stacked up. So I made a simple request:
“Please provide the workings underlying the job creation claims, along with any correspondence with Treasury relating to that modelling.”
A reasonable request. A Government agency claimed 10,000 jobs would be created due to Shane Jones handing out money. So what was the basis for the claim?
On 26 February, Treasury advised me they had no information to provide as they had not provided any advice to MBIE. On 6 March, MBIE advised that they had extended the OIA deadline to 22 March. Why? Because “consultations necessary to make a decision on the request are such that a proper response to the request cannot be made within the original time limit.”
Trying to parse bureaucratese is never easy. I assumed that MBIE’s answer meant the modelling might have drawn on commercially sensitive material provided confidentially by applicants.
It took around eight weeks to finally get an answer. So you would expect that the modelling would be something extremely complex.
And then the truth came out:
Here is what MBIE did to produce the 10,000 jobs figure.
They took the number of jobs that every Provincial Growth Fund applicant promised in their grant application. They added those numbers. Then they added one job for every feasibility study the Provincial Growth Fund was undertaking – that’s because you have to hire somebody to do a feasibility study.
That’s it.
My God. The so called 10,000 jobs is based on what the scavengers with their hand out for the free money claimed. It was not based on even a millimeter of analysis as to rigor or feasibility or probability.
Yes the Government claimed 10,000 jobs will be created, because that is what the people receiving the free money said would happen.
Now you might think people making applications for grants through the Provincial Growth Fund might not be the most unbiased assessors of the number of jobs the grants might support. Perhaps, and hear me out here – maybe, just maybe, the grant applicants might have thought they would be more likely to receive a grant if they put a bigger number on the form. It isn’t like the money would be taken away if job creation figures wound up being less than advertised.
No shit Sherlock.