What is one job worth?
A recent report by the Pioneer Institute evaluates the job creation impact of six years of investment in the life sciences industry in Massachusetts under the 2008 Life Sciences Act. The LSA was funded at $1 billion over 10 years; when the program was launched, former Gov. Deval Patrick announced it could create 250,000 jobs, resulting in a cost of $4,000 per position.
Over five years in now and roughly half of the allocation has been expended, so how close is the state to that 250,000 job goal? The Pioneer Institute analysis used 4 different job creation calculation methods, replicated from the foremost studies of the Life Science industry in the state, to answer that question.
And the answer is, as it is so often in economic analysis: it depends. The job creation numbers ranged from 3,639 to 6,107 over the four methods, with an average of 5,010 jobs. Using the average this results in a cost of $111,118 per job, a sight higher than the original $4,000 per job estimate. The report gives no indication of the quality of these jobs in terms of wages or benefits.
To put this in context of the rest of the state’s economy, employment in the state grew by 8.4 percent from 2008 to 2014. Three of the methodologies arrive at a Life Sciences job growth rate below this overall trend, ranging from 4.2 percent to 8 percent. The fourth calculation gives a life sciences growth rate of 10.5 percent.
When compared to life science job growth in other states, performance again varies by methodology: Massachusetts’ ranking ranges from 3rd to 16th.
By nearly all measures, the LSA’s performance is underwhelming. Is one job worth $111,118? That is a question that only the taxpayers of Massachusetts can answer.