News Story

20,000 Construction Jobs From Detroit Arena? That’s The Total For All Wayne County

Economist: Watch the fine print, figure may include coffee vendors

A recent article in the Detroit Free Press repeated a claim about the economic impact on the city of the taxpayer-subsidized Little Caesars Arena.

The article left unchallenged an oft-quoted statistic: The development along Woodward Avenue created 20,000 construction-related jobs.

The figure of 20,000 construction and construction-related jobs has been cited for over a year by the project’s developers and by Olympia Entertainment, which operates the Little Caesars Arena.

Construction on the arena began in April 2015, and it opened in September 2017.

But there were only 18,967 construction jobs in all of Wayne County in 2015, according to the federal Bureau of Labor Statistics. That figure rose to 19,853 in 2016 and 21,007 in 2017. What is harder to pinpoint, however, is what counts as a “construction-related” job.

“I think the key phrase in the article is ‘construction-related jobs.’ Since the BLS only looks at actual construction jobs, the economic impact study can get away with their job numbers by calling them ‘construction-related jobs’ instead,” said Chris Douglas, an associate professor of economics at the University of Michigan-Flint. Douglas is also on the Board of Scholars at the Mackinac Center for Public Policy, which publishes Michigan Capitol Confidential.

Douglas continued: “What happens is that the economic impact study takes the total spending on the arena and runs it through a computer model to get the total number of jobs created. Under the logic of the model, if a construction worker bought a cup of coffee while on the job site, that would create jobs for coffee shop employees and hence be counted as ‘construction-related employment.’"

Ed Saenz, director of communications for Olympia Development, didn’t return an email seeking comment.