Spin-Off Jobs, just what are the numbers?

Job creation is closely tied to the type of economy a government is promoting. Generally speaking we can have a Service type economy or a Manufacturing type. When it comes to jobs, which type generates more jobs and which type generates the better paying jobs? Published research indicates that for every new Service job there are 2 – 3 spin-off jobs created, while every new Manufacturing job creates 3 – 9 spin-off jobs.

 In a recent article by Ken Lewenza of the CAW he stated that 112,000 manufacturing jobs (automotive in his case) generates 370,000 spin-off and direct jobs. This is a ratio of 3.3 jobs supported by every manufacturing job. From an article in the Manufacturing Journal ”… a University of Michigan study shows for each job in manufacturing, more than six “spin-off” jobs are created.” At a recent conference Bill Ford of Ford Motor Company stated that “For each job created in autos, nine more jobs are created to support it,”. A recent analysis in Kentucky estimates that each manufacturing job creates 3 spin-off jobs.

The data is quite muddy as the types and number of spin-off jobs created varies with the type of manufacturing being performed in a region. High technology manufacturing brings high wages and therefore high quality, well-paying, spin-offs. The same can be said for high paying jobs in the service sector but generally speaking such jobs are in middle and upper management which is a relatively small portion of the service labour force.

With respect to wages, according to Workopolis who reference Stats Can for their findings:

 a) In administration and support services, the average weekly earnings are $734.24 or $38,180 a year. Workers in the retail trade earn roughly $521.41 a week or $27,113 a year.

 b) In the professional, scientific and technical services, workers make $1,229.64 a week or $63,941 a year. (This category includes a broad range of professions, such as management, scientific and technical consulting; accounting, tax preparation, bookkeeping payroll services; and architectural, engineering and related services.)

 c) The average weekly salary in manufacturing is $999.75, or $51,987 a year. Workers in utilities make $1,705.73 a week or $88,697 a year, while natural resource workers such as those in mining, quarrying, and oil and gas extraction earn $1,788.92 a week or $93,023 a year.

Interesting numbers indeed but they clearly favour manufacturing as being the preferred job creation sector. So, why is it that Ontario’s Liberals have been pushing manufacturing out of the province?

Good question.