6

This Business Insider India news report is one of many that claim that Biden said that a $34 billion dollar Air India order for 220 Boeing planes will support 1 million US jobs, and that many of those jobs "will not require a four-year college degree" and will be spread across 44 states.

That just seems dubious to me.

I've not seen such reports in western newspapers like, say, the NY Times.

Did Biden make this claim?

Improve this question
5
  • 2
    Quick arithmetic shows that this averages to $34,000 per job. Allowing for corporate return on investment and for over-seas production and raw materials, might leave on the order of $10,000 per job. There's obviously no suggestion here that this will create a million new permanent full-time jobs, especially when one considers that the project will take many years to complete. So the question here is really whether a million workers will directly or indirectly benefit from the deal.
    – Ray Butterworth
    Feb 18 at 13:40
  • 4
    @RayButterworth You are ignoring the economic multiplier. While the exact value is highly debated, the existence of a multiplier is not. Employed people go out to eat, travel, pay taxes, buy nice new cars, new homes, nice furniture to fill those nice new homes, demand new roads to cut down the thirty minutes each way to go to and from work. Those new roads in turn bring in new businesses (after which it takes more than thirty minutes each way to go to and from work). However, the question is not asking whether the number is valid. It is asking whether the Biden administration made the claim.
    – David Hammen
    Feb 19 at 5:15
  • 34B is list prices. Real customers buying more than 1 plane usually pay less than 50%. However, corporate profits definitely count as economic benefit. Either way, that's ~$15k injected per job.
    – Therac
    Feb 19 at 8:49
  • 1
    "Did Biden make this claim" is trivially checkable. I assume what you want to know is whether it's true. Please don't write "fake" questions like this. Ask the actual question you want to know.
    – DJClayworth
    Feb 19 at 16:32
  • @DJClayworth Its not really trivially checkable. All news sources I checked were Indian and no Western newspaper had reported anything. Also, My question was edited. Please check edit history. Since the question has now been answered satisfactorily and it was edited by a member experienced on workings of this site, I wont change anything.
    – whoisit
    Feb 19 at 17:58

1 Answer 1

Reset to default
23

Well, Statement from President Joe Biden on Air India’s Historic Purchase of Boeing Aircraft is the official press release from the White House:

The United States can and will lead the world in manufacturing. I am proud to announce today the purchase of over 200 American-made aircraft through a historic agreement between Air India and Boeing. This purchase will support over one million American jobs across 44 states, and many will not require a four-year college degree. This announcement also reflects the strength of the U.S.-India economic partnership. Together with Prime Minister Modi, I look forward to deepening our partnership even further as we continue to confront shared global challenges—creating a more secure and prosperous future for all of our citizens.

Note that "support" and "create" are not necessarily the same thing, because the former can refer to existing jobs. (Some Indian press venues like PTI indeed expressed that as "create".)

I don't know how many could be reasonably be connected to producing 200 aircraft, but Boeing has about 150,000 US employees.

A multiplier of around 6 for indirect employment has been posited elsewhere, e.g. in the UK according to The Manufacturer:

Boeing also confirmed that its direct employment has now surpassed 2,000 – the company hired, on average, a new employee every day in 2015 – and that spending with the UK supply chain in 2015 was £1.8bn ($2.65bn), up from £1.4bn ($2.2bn) in 2014 and more than twice the £744m ($1bn) in 2012. [...]

Boeing spent US $2.2bn (£1.4bn) with UK suppliers in 2014 and the resulting economic activity — including exports — is estimated by Oxford Economics to have supported 12,700 jobs in the UK.

Oxford Economics also estimates that Boeing’s wage payments to staff supported a further 9,500 jobs in the UK in 2014.

So if we use that yardstick about 900,000 jobs could be indirectly supported by Boeing supply chains the US.

For some basis of comparison, for "durable manufacturing" more broadly, EPI claims around 3 supply chain jobs for every direct job and around 4.5 extra induced jobs (by spending), so overall something like 7.5 additional "total indirect jobs" for every job in "durable manufacturing". (I've done a bit of rounding here.)

In terms of direct, new hires, Boeing announced around 10,000 this year.

It's not unheard of to read claims of much larger indirect employment multipliers (than 6), e.g. one "France-Amerique" page (which is more or less a magazine supported by the French taxpayers/government, as far as I can tell) claims that Airbus "employs 3,200 people across 20 assembly and training sites [in the United States]. Through its suppliers, the European group has created 275,000 indirect jobs in the U.S.A, and contributes 16.5 billion dollars to the American economy every year." That's an indirect employment factor of around 86 being claimed there. They don't claim them directly in Airbus' supply chains though.

Improve this answer
10
  • 3
    This article implies a multiplier of 7.44 for durable manufacturing, so the claim is plausible. Other sites claim multipliers as high as 10 for manufacturing.
    – David Hammen
    Feb 18 at 11:06
  • 2
    Airbus airplanes, long before US assembly started, included American engines (GE, IAE, CFM, Pratt and Whitney), American avionics (Honeywell, Rockwell Collins), American structures (Spirit AeroSystems), and much more (Goodrich, Parker Hannifin). So the supply chain is where the large number of US jobs comes from.
    – user71659
    Feb 18 at 21:01
  • 2
    @user71659 it isn't just that: there is an army of service providers such as caterers, painters, cleaners, builders, transport etc, who don't need 4 years in college to do their jobs. The knock-on effect is huge.
    – Weather Vane
    Feb 19 at 11:42
  • @WeatherVane I'm referring to the statement where it's pointed out that Airbus appears to be using an abnormally large indirect employment factor. Airbus had 0 manufacturing of airplanes in the US prior to opening a line in 2015. Prior US employees were largely sales, customer support and training. However, since their very first airplane, they've bought US engines and other equipment, had them shipped over to Europe for assembly. So, you have to look at the global operation to find multiplication factors. Same applies to Boeing, they get engines and parts from European and Asian suppliers.
    – user71659
    Feb 20 at 3:09
  • It all depends also on how you define "supporting". Say I work for a company manufacturing toilet seat covers for Boeing, as a cook in their company restaurant. Technically my job is one of those "supported" because my employer gets money which helps a bit towards securing my job.
    – jwenting
    Feb 20 at 12:42

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .