Economists: Cargo terminal would bring fewer construction jobs, slightly more permanent ones

BELLINGHAM - The Gateway Pacific Terminal project at Cherry Point could create more than 1,200 permanent jobs when indirect impacts are factored in, three local economists said Thursday, Oct. 27, at a Bellingham-Whatcom Chamber of Commerce and Industry breakfast presentation.

The economists - Hart Hodges and David Nelson of Western Washington University and Jed Brewer, a private consultant - said they were hired by SSA Marine to review an earlier jobs analysis provided for the company by Martin Associates of Pennsylvania.

SSA Marine is the Seattle-based shipping company that has proposed the terminal.

Nelson told the Hotel Bellwether gathering that he and his colleagues' estimate of permanent job creation came out close to Martin's, but their estimate of temporary construction job impacts was significantly lower.


If the shipping terminal for coal and other bulk cargoes is built to its full 54 million-metric-ton annual capacity, the Martin firm estimated 1,229 direct and indirect jobs. The local economic trio's estimate was 1,273.

City Council member Michael Lilliquist asked the economists if it would be possible to estimate any negative economic impacts that might result from increased rail traffic through Bellingham, such as reduced real estate values, public expenses at rail crossings, or lost opportunities to recruit businesses that would find the city less attractive.

As many as nine additional loaded trains could come through Bellingham per day, and those trains would go back empty on the same route to Rocky Mountain coal mines.

Brewer said that kind of analysis was beyond the scope of what SSA had hired them to do, but would likely be a part of the environmental analysis that will be done before local, state and federal agencies decide to issue permits for the project.

Hodges said the kind of analysis Lilliquist asked about was feasible.

"We'd love to be asked to dig into some of these additional questions," Hodges said.

Martin Associates and the local economists used similar methods to estimate the permanent job impact: Both started with a figure of 430 total direct jobs that includes those employed by the railroad, tugs and ships, longshore and maritime services, as well as 44 jobs for "terminal operators."

Then, the economists calculated the multiplier effect of those jobs on the wider Whatcom County economy. Martin Associates estimated that each of the 430 jobs would create roughly 1.86 additional jobs, while the local economists used a multiplier of 1.96 to reach their estimate.

"Jobs multipliers" are economists' attempt to measure how many additional jobs would be generated by the economic activity generated by the terminal, including jobs at companies that would do business with the terminal and "induced" jobs created by workers' spending of their paychecks.

Asked if it was appropriate to consider rail and maritime jobs as part of the base of 430 permanent local jobs used to calculate the impact, Hodges said yes. He said 430 was Martin Associates' estimate of the number of rail and maritime workers who would live and spend in Whatcom County. He noted that some people who work on Cherry Point oil tankers live here now.


The local economists also studied the complexities of construction job creation, and the indirect economic impact of that, under different scenarios. In that area, the local economists came up with estimates significantly lower than those of Martin Associates.

Brewer noted that the project - if it succeeds in obtaining permits - might be built in two phases. But if the company had the permits and the market demand to build the full-size, 54-million-ton annual capacity at once, Martin Associates estimated 2,210 direct jobs and another 3,011 in indirect and induced jobs over a two-year period, for a total of 5,221.

The local economists started with a base estimate of 2,020 and used a lower multiplier to arrive at a total of 3,636, but they said both sets of estimates are "reasonable."

"Input-output models are known to yield different results at times," the local economists said in their written report. "Accordingly, the conservative reader could use our indirect and induced estimates as his or her preferred impact projections. The more optimistic reader could use Martin Associates."

One questioner asked the economists about the societal impact of creating so many temporary jobs and then eliminating them when the construction is done.

"Our economy then will revert back to what it is now," Brewer said.

"I suppose you could ask if we're better off not building it at all so we don't have to lay them off," Hodges said.

Brad Owens, president of the Northwest Washington Building and Construction Trades Council, an organization of labor unions, said temporary work is a fact of life in the building trades.

"We go from job to job to job," he told the group. "It is one temporary job after another that sustains the construction industry. ... Right now, the volume of work is not there as it has been in years past."