The Mythical 12,000 Jobs

Coal supporters have made a misleading charge that a ban on coal could cost Oakland nearly 12,000 jobs.  The estimate that the entire Oakland Global waterfront development project would spawn 11,970 jobs comes from a 2012 Economic Impact Analysis (EIA) prepared by a San Francisco-based real estate consulting firm for the purpose of persuading local politicians and community stakeholders of the project’s value.

Careful reading of the EIA shows that these estimates bear little relation to the coal export plan.   First of all, of the estimated 11,970 jobs, only 2,335 are permanent jobs at Oakland Global. Second, of the estimated 2,335 permanent jobs, only 117 are on-site jobs at the bulk terminal which developers are offering to the coal industry.   Third, of the estimated 117 permanent, on-site jobs at the bulk terminal, even fewer may materialize if the coal operation achieves the “state-of-the-art” mechanization touted by the developer.

How can the developers’ claims of job creation—repeated uncritically by some of our local clergy lured by promises that a portion of coal revenues will be donated to charity—be so overblown and misleading?

The area enclosed in red is the entire Oakland Global Trade and Logistics Center. The bulk terminal will be built on the portion of the property in the upper left.

It comes down to how and why the EIA was created. An EIA is a piece of sales literature, not a binding contract.   So most of the “promised” jobs—6,949—are “indirect and induced” jobs that could be anywhere in the region, not just Oakland.   An example of such jobs would be if a local firm in San Leandro that manufactures shipping crates starts getting more orders and decides to hire two new employees. None of these “indirect and induced” jobs is promised to Oakland residents,or will make any measurable impact on the severe crisis of unemployment in Oakland’s African-American and Latino neighborhoods.

Out of the remaining 5,021 jobs, 2,686 are construction jobs that are added together with permanent jobs only for purposes of deception.   Unlike permanent jobs which are estimated to exist throughout the 66 years of the developer’s lease, a construction job is defined as one person working for one year.   Because the construction all takes place at the beginning, 2,686 jobs sounds like a lot, but spread over 66 years, it has a little less economic impact than 41 permanent jobs. Moreover, reports coming in from contractors suggest that the actual job creation for Oakland residents and Oakland minority residents has not begun to meet the developer’s projections on which the EIA is based.

And even if the 2,686 construction jobs were real, there is another factor that makes the connection between coal and jobs feeble.   The bulk terminal is only one small component of the overall Oakland Global plan.   In addition to the bulk terminal near the Bay Bridge toll plaza, Oakland Global will include a vastly larger logistics and warehousing center managing the flow and distribution of cargo at the adjacent Port of Oakland; a rail yard servicing the Port; a 17-acre parking and service center for trucks; and a recycling center.

None of these components depends on the bulk terminal’s construction, much less its dedication to coal exports. And, according to the EIA, the bulk terminal will constitute only 6% of the square footage of the buildings to be constructed at Oakland Global so the coal terminal proposed by the developer is hardly going to contribute more than a small fraction of the construction jobs.

Finally, of the estimated 2,335 permanent full-time jobs 2,218 are attributed to the other projects that will be created by Oakland Global: 1,461 at the logistics and warehousing facilities, 30 at the truck service center, 401 at the Port railyard, and 326 at the recycling center.   That’s how the number of full-time permanent jobs at the bulk terminal shrinks to a measly 117 jobs!

No Coal in Oakland seeks a ban on coal but does not oppose the rest of the project, which will bring many economic benefits including jobs. As Mayor Schaaf eloquently put it in an outraged email to developer Phil Tagami when she first learned of his plan to ship coal: “Stop it immediately. You have been awarded the privilege and opportunity of a lifetime to develop this unique piece of land. You must respect the owner and public’s decree that we will not have coal shipped through our city.”

For a more in-depth analysis of the 2012 Economic Impact Analysis and a copy of the EIA, click on the “Learn More” button.