EconomicImpact
Analysis
oftheMoundRoad
Corridor
SubmittedBy:
EconomicModelingSpecialists
International(Emsi)
March11,2017
1
Project Approach
The purpose of this project is to provide an economic impact analysis assessing the impact of
MoundRoadbusinessesandtheiremployeesonthelocalandstateeconomies.Toaccomplishthis,
theassignmentwillconsistofgeneratingtheeconomicimpactofthesebusinessesonoveralllocal
jobs,earnings,andsalesandhowthatcorrelatestothestate’soveralleconomicbase.
Modeling
TheBonnerAdvisoryGroupwillprovidethegeographicalareatobestudied.Emsiwillrespond
withthenumberofbusinessesandjobsinthatareathataretobeassessedforthisimpactstudy.
Uponverificationandagreementonthebusinessesandjobs,Emsiwillproduceacustomeconomic
impactmodeltoshowforthelocalarea(asdefinedbyBonnerAdvisoryGroup)andthestate,the
•
Direct,indirect,andinducedspendingjobsassociatedwithMoundRoadbusinesses
•
Estimatedwagesandsalaries
•
Estimatedtaxrevenues
•
Salesrevenueandassociatedimpacttostate’srevenuebase
Thefindingsfromthisstudywillprovideabetterunderstandingoftheeconomicimportancethe
MoundRoadcorridorhasontheregionandstatewideeconomies.
Value Adds that Emsi brings to the Project
The economic model that will be produced for this project will utilize Emsi’s proprietary
multiregional social accounting matrix (MR-SAM). Emsi’s MR-SAM represents the flow of all
economictransactionsinaneconomicarea.Thismodelingsystemisthenewindustrystandard
forregionaleconomicimpactanalysis,andimprovesontheolder“comparativestatic”typemodel
inthesamegeneralclassasRIMSII(BureauofEconomicAnalysis)andIMPLAN(ImplanGroup).
Whencombinedwithregionaleconomicdata,thismodelwillestimatethedirecteffectsandripple
effectsoftheMoundRoadCorridorbusinessesupontheregionalandstateeconomiesintermsof
increased sales, jobs, earnings, and value-added (or gross regional product). The ripple effects
calculated by the model will take into account both supply-chain impacts (direct and indirect
effects)andincreasesinhouseholdincome(inducedeffects).
Project Deliverables
Theresultsofthisanalysiswillbepresentedinabriefsummaryreportaccompaniedbydetailed
excel tables. The report will include a short description of the methodology used and a brief
2
summaryofthefindingsthateffectivelycommunicatestheeconomicimpactoftheMoundRoad
Corridorbusinesses.
Proposed Project Team Qualifications and Availability
•
Multi-disciplineexpertise–economics,industryexpert,publicpolicy,operationsand
processes,technology,transportationsystems,corporatefinance
•
Advisesprivateindustryandgovernmentagenciesonlocation,businessdevelopment,
infrastructure,attractiontargetsandpolicy
•
Experienceinmanagingdomesticandinternationalresearchandanalysisprojects
•
Theteamhasastrongestablishednetworkofcontactsandisabletoconsultwithexperts
inmanyfields
With an expert consulting staff of economists, data analysts, writers, editors, and graphics
designers, Emsi is well-equipped to produce, distribute, and implement the work products
describedherein.
Emsi’sstaffwillbelocatedatourheadquartersofficeinMoscow,Idaho,andsatelliteofficeinCoeur
d’Alene,Idahoduringthisproject.Biosforkeypersonnelforthisprojectareasfollows:
Ms.DebbieMarangerMenk–DirectorofConsultingServices
Ms.MenkistheDirectorofConsultingServicesforeconomicandworkforce
development at Emsi. She will serve as the principal investigator for this
engagement, ensuring all team members fulfill their obligations on time. In
additiontomanagingtheconsultingservicesteam,shealsomanagescustom
consultingengagementsalongwithahostofstandardizedanalysisproducts.
Ms.Menk’sbackgroundisintheareasofeconomicmodelingandpublicpolicy
analysis.Shehasexpertiseinfinancialanalysis,econometricmodeling,and
forecasting.PriortojoiningEmsi,herexperienceincludedperforminganalysesoftheeconomic
impactsoftheautomotiveindustryorsectorsoftheindustryonvariousregionsandpopulations
inNorthAmerica,includingGMandChryslerbankruptcystudiesusedbymembersofCongress
during the 2009 recession. Ms. Menk has an M.B.A. with an emphasis in finance from the
ThunderbirdSchoolofGlobalManagement.Shehascompletedseveralgraduate-levelengineering
courses at the Milwaukee School of Engineering. She received her B.A. degree from Valparaiso
University.
3
AliviaMetts–EconomistandDataAnalyst
Alivia Metts is an economist with over a decade of experience in helping
communitiesthrive.Herinsightfuleconomicanddemographicanalysesguide
decision makers in economic and commercial development as well as
transportationandenvironmentalplanning.Ms.Mettshasworkedinboththe
publicandprivatesectors.MostrecentlysheservedintheIdahoDepartment
ofLaborastheRegionalEconomistforthestate’sfivemostnortherncounties.
There she focused on the special needs of communities and performed
economicanalysisacrossallindustriesforbusinesses,governments,andeconomicdevelopment
agencies.ShebuiltareputationasatrustedsourcefordataontheInlandNorthwest.Ms.Metts
waspreviouslyemployedbythenationalconsultingfirm,HDR,Inc.,wheresheworkedoutoftheir
Washington,ChicagoandAlaskaoffices.Herprojectsranthegamutfrommasterplanningurban
centerstolanduseforecastingandtransportationmodeling.
Mr.JustinTheriot,LeadDataScientist,Mathematician
Mr. Theriot is a leading data scientist and mathematician. He specializes in
developingnewapproachestodatamodelingandeconomicforecasting.Mr.
TheriothasbeenemployedatEmsiasaleaddatascientistandeconomistfor
twoyears.Inthiscapacity,hehasdevelopednewdataproductsfrombigdata
forbothclientandEmsiinternaluse.Someofthesehavebeenentirelynew
approachestounderstandingworkforcedemographics,includingbuildinga
datasetthatshowsoccupationsofpeoplebyplaceofresidenceatthezipcode
level.Heisproficientinseveralprogramminglanguagesandmultipleplatforms.Mr.Theriotisa
publishedauthorandhasbeenafeaturedspeakeratnationaldatascienceconferences.Mr.Theriot
isactiveintheacademiccommunitiesinNorthernIdahoandNorthernWashington,promoting
datascienceandmathematicsinschoolsfromK-12tograduatelevels.Heisco-founderofthenotfor-profit Blue Space Labs, an organization designed to educate high school students in data
science through understanding economic theory. Mr. Theriot is a veteran of the U.S. Air Force
wherehewasanairtrafficcontrolwatchsupervisor.
Company Information and Qualifications
Emsi’sBackground
Economic Modeling Specialists International or “Emsi” was founded in 2001 by Drs. Kjell
ChristophersenandHankRobisonasacompanydesignedtostudytheeconomiccontributionof
higher education and workforce development. Over the past 15 years, Emsi has evolved into a
professional services firm, specializing in advanced economic impact modeling, economic
research, and web-based labor market data analysis tools. With a team of close to 125
professionals, Emsi proudly provides the most current, complete, and granular economic and
labormarketdataavailabletomorethan500organizationsintheUS,Canada,andtheUK.Emsiis
4
continuously involved with workforce development boards, economic development
organizations,educationalinstitutions,othernon-profitorganizations,andprivatesectorfirmsto
helpthemtacklecomplexeconomicproblemsandtohelpthemunderstandtheimpactsofnew
opportunities.EmsiisbasedinMoscow,IdahoandhasanofficeinLondon,England.InAugust
2012EmsiwaspurchasedbyCareerBuilder,LLC.
Emsi’sMission
Emsibelievesthateconomicdevelopmentdriveseconomicprosperity.Whenstakeholdersfully
understand the potential economic impacts and outcomes of proposed development efforts,
better,moreefficientdecisionsaremade.Thislevelofunderstandingislargelydependentonour
abilitytoprocessdatathatilluminatemanyofthefacetsofaregionaleconomy.Emsiprovides
these data to our customers and further partners with our clients to develop implementable
strategiesandtaskstoenableourclientstocarryouttheirmissions.
Emsi’s unique qualifications in providing custom economic modeling services
We are confident that our economic modeling capabilities provide targeted economic impact
answers for hundreds of projects each year. No other firm can match the level of experience,
knowledge,andcustomerservicethatEmsiprovides.Todate,Emsihasconductednearly1,400
comprehensive, regional economic impact studies. Emsi also has more experience conducting
complex,multi-facilityimpactstudiesthananyotherfirm.Throughthese,wehavedevelopedthe
expertise necessary to deliver final products and client experiences that are robust enough to
withstandthemanychallengesinherenttoeconomicimpactstudies.
Wearecommittedtodeliveringunique,objective,andtrulydefensiblestudies.Tohelpachieve
this,Emsidevelopedamodelingprocesswhichallowsustoavoidmanyoftheinaccurateorinvalid
methodologies and assumptions that are common in other such studies (e.g. non-regionalized
multipliers,aggregationerrors,etc.).Themethodologyusedforthiseconomicimpactstudywill
be clearly explained in the final report and provide a full understanding of all factors and
assumptionsutilized.
Staff Publications (partial list)
Emsi staff have authored/co-authored numerous economic impact studies. A partial listing of
publishedstudiesinclude:
EconomicContributionofGeneralMotors'OrionAssembly,PontiacMetalStamping,andSpringHillAssembly
ManufacturingPlantsKristinDziczek,DebbieMarangerMenkandYenChen,CenterforAutomotiveResearch,AnnArbor,MI,
February2014.;
TheEffectontheU.S.EconomyoftheSuccessfulRestructuringofGeneralMotors.SeanP.McAlindenandDebbieMaranger
Menk,CenterforAutomotiveResearch,AnnArbor,MI,December2013.;
5
ContributionofUrban-BasedSupplierstotheLocalEconomy.KimHill,DebbieMarangerMenkandJoshuaCregger,Center
forAutomotiveResearch,AnnArbor,MI,October2012.;
AssessmentofTaxRevenueGeneratedbytheAutomotiveSector.KimHill,DebbieMarangerMenkandJoshuaCregger,Center
forAutomotiveResearch,AnnArbor,MI,April2012.;
AnalysisoftheEconomicContributionofConstructingtheNewInternationalTradeCrossing:ANewBridgeLinking
DetroitandWindsor.KimHill,RichardWallace,DebbieMarangerMenkandJoshuaCregger,CenterforAutomotiveResearch,
AnnArbor,MI,April2012.;
EconomicImpactofHyundaiintheUnitedStates.KimHill,DebbieMarangerMenkandJoshuaCregger,CenterforAutomotive
Research,AnnArbor,MI,November2011.;
ContributionofToyotaMotorNorthAmericatotheEconomiesofSixteenStatesandtheUnitedStatesin2010.KimHilland
DebbieMarangerMenk,CenterforAutomotiveResearch,AnnArbor,MI,March2011.;
CARResearchMemorandum:TheImpactontheU.S.EconomyoftheSuccessfulAutomakerBankruptcies.SeanMcAlinden,
KristinDziczek,DebbieMarangerMenk,andJoshuaCregger,CenterforAutomotiveResearch,November2010.;
ContributionoftheAutomotiveIndustrytotheEconomiesofAllFiftyStatesandtheUnitedStates.KimHill,AdamCooper
and Debbie Maranger Menk. Center for Automotive Research. Prepared for The Alliance of Automobile Manufacturers, The
Association of International Automobile Manufacturers, The Motor & Equipment Manufacturers Association, The National
AutomobileDealersAssociationandTheAmericanInternationalAutomobileDealersAssociation.April2010.;
TheEconomicandEnvironmentalImpactsofaCorporateFleetVehiclePurchaseProgram.KimHillandDebbieMaranger
Menk,CenterforAutomotiveResearch.PreparedforAT&T,October2009.;
CAR Research Memorandum: The Impact on the U.S. Economy of Successful versus Unsuccessful Automakers
Bankruptcies.SeanP.McAlinden,AdamCooperandDebbieMarangerMenk,CenterforAutomotiveResearch,AnnArbor,MI,May
2009.;
ContributionofHondatotheEconomiesofSevenStatesandtheUnitedStates.SeanP.McAlinden,KimHill,DavidColeand
DebbieMarangerMenk,CenterforAutomotiveResearch.PreparedforAmericanHondaMotorCo.,Inc.,January2009.;
CARResearchMemorandum:TheImpactontheU.S.EconomyofaMajorContractionoftheDetroitThreeAutomakers.
SeanP.McAlinden,KristenDziczekandDebbieMarangerMenk,CenterforAutomotiveResearch,AnnArbor,MI,November2008.;
ContributionofaVehicleInfrastructureSystemtotheEconomyofMichigan:EconomicandIndustrialImpactsUpdateand
Benefit-CostAnalysis--KimHillandDebbieMarangerMenk,CenterforAutomotiveResearch.PreparedforMichiganDepartment
ofTransportation,June2008.;
CountryofOrigin:IsthisVehicleDomesticorImport?TheU.S.DomesticContentMeasurementPrograms,2008--Sean
McAlindenandDebbieMarangerMenk,CenterforAutomotiveResearch.Unpublished,April2008.;
ContributionoftheMotorVehicleSupplierSectortotheEconomiesoftheUnitedStatesandIts50States–KimHilland
Debbie Maranger Menk, Center for Automotive Research. Prepared for the Motor and Equipment Manufacturers Association,
January2007.;
6
Methodology
Theeconomicarea(hereafterreferredtoasthearea)forthisreportisdefinedasMoundRoad
between8MileRoad(southernborder)andHighway59(northernborder),plusVanDykewith
thesamenorthernandsouthernborders.VanDykeandMoundRoadrunparalleltoeachother
andareneighboringroads.
TounderstandtheeconomicimpactsofbusinessactivityalongMoundRoadorVanDyke,we
firstusedmultipletechniquestodeterminethetypesofbusinessesinthisarea.Weused
MacombCounty’sinvestmentanalysistooltocreatealistofbusinesseswithrecentinvestment
inthearea.Thismappinganddatatoolalsoprovidedinformationontypeofbusinessand
numberofemployees.
(http://gis.macombgov.org/portal1/apps/webappviewer/index.html?id=d3d02882e3fe4c2ba5fd183f161ad6ab)
Next,wesupplementedtheabovelistbymappingallbusinessesinthearea.Themappingtoolis
fromtheEmsiDeveloperdataset,andmapsbusinessesbybusinessname,industry,sales,and
employmentrange.Asacheck,weusedtheBureauofLabor(BLS)QuarterlyCensus(QCEW)to
determineemploymentbyindustryforthecounty.Fromthiseffort,wedevelopedalistof
industriesandthenumberofemployeesforthearea.Thislististhescenariothatwemodeled
usingEmsi’seconomicimpactmodel(MR-SAM),asdescribedbelow.
Wecreatedtwoscenariostomodel.Thefirstscenariousedallemploymentinthearea.The
secondscenariousedthesamegeography,butexcludedallDetroit3employment.(Note–the
resultsforthisscenarioarepresentedintheaccompanyingexcelworkbook).
Todeterminetheeconomicimpactofbusinesseslocatedinthearea,weusedaneconomic
impactmodelthatisproprietarytoEmsi.Thisisamultiregionalsocialaccountingmatrix(MRSAM),whichisaneconomicimpactmodelthatiscomparabletoother‘off-the-shelf’economic
impactmodelsfortheU.S.economy.Emsi’sMR-SAMrepresentstheflowofalleconomic
transactionsinaneconomicarea.
Emsi’smodelisusedtounderstandeconomicscenarioscovering1,000industries(atthe6digit
NAICSlevel)16demographiccohorts,and750occupations.Emsi’smodelfollowstheindustry
standardforregionaleconomicimpactanalyses,andisinthesamegeneralclassasIMPLAN
(ImplanGroup)butusesthemoresophisticatedStevenstechnique(whichisalsousedbyREMI)
tocalculateregionalcoefficients.Themodelestimatesthedirecteffectsandrippleeffectsofan
economicactivityonthedefinedeconomicareaintermsofincreasedsales,jobs,earnings,and
value-added(orgrossregionalproduct).Therippleeffectscalculatedbythemodeltakeinto
accountbothsupply-chainimpacts(directandindirecteffects)andincreasesinhousehold
7
income(inducedorspin-offeffects).Themodelasusedinthisstudyreflectsthelong-term,
permanenteffectsofongoingeconomicactivities.
Resultsforthecomprehensivescenario,whichincludesD3employment,presenttheeconomic
impactsofareabusinessesonbothMacombCountyandforthestateofMichigan.Unless
otherwisespecified,thestateofMichiganresultsincludeMacombCountyresults.
Results
ComprehensiveScenario,includingallDetroit3employment
Geography
t3Employment MacombCounty
t3Employment RestofMichigan
t3Employment AllMichigan
Input Jobs Downstream Jobs
20,200
0
20,200
17,220
98,064
115,284
Jobs
Total Jobs
Multiplier
37,420
98,064
135,484
1.86
NA
6.72
Change in Earnings
Changes in Taxes on
(Wages and Salaries) Production and Imports
$2,838,551,069
$5,551,208,558
$8,389,759,627
$190,743,825
$834,337,974
$1,025,081,799
Theaboveresultsshowthatthereareatotalof20,200peopleemployedalongVanDykeor
MoundRoad.Thesejobssupportanother17,720jobsinMacombCounty.Combined,$2.8billion
ispaidtothese37,400employees,andtotaltaxesonproductionarenearly$191million.
Additionally,the20,200jobsalongMoundRoadsupportanother98,100jobsintheMichigan
economyoutsideofMacombCounty.ThesearesupplierjobstothosebusinessesalongMoundor
VanDykeorexpenditure-inducedjobsfromemployeespending.Expenditure-inducedjobsare
definedasemploymentthatiscreatedorsupportedwhenthedirectemployeesorsupplier
companyemployeesspendtheirpaychecks.Includingthe20,200directjobsonMoundorVan
Dyke,thereareatotalof135,500jobsinMichigan(becauseofthearea’sbusinessactivity),fora
totaljobsmultiplierof6.72.ThismeansthatforeveryjobonMoundorVanDyke,thereare
another5.72jobsinMichigan.
Ascanbeseeninthechartbelow,the37,400jobsare:
•
20,200initialjobsalongMoundorVanDyke
•
12,500Tier1supplyjobs(direct)
•
2,900Tier2andlowersupplyjobs(indirect)
•
1,900expenditure-inducedjobs(induced)
8
9
Thetypesofindustriesthatemploythese135,500jobsareshowninthefollowingtable.As
notedearlier,theMichiganjobsincludetheMacombCountyjobs(thereforethecolumnscannot
beaddedtogether).
GeographyisMoundRoadorVanDykebetween8MileandHighway59
Macomb
County Jobs
Industry
Manufacturing
HealthCareandSocialAssistance
RetailTrade
AccommodationandFoodServices
WholesaleTrade
Professional,Scientific,andTechnicalServices
AdministrativeandSupportandWasteManagement
OtherServices(exceptPublicAdministration)
ManagementofCompaniesandEnterprises
RealEstateandRentalandLeasing
FinanceandInsurance
TransportationandWarehousing
Construction
Government
EducationalServices
Arts,Entertainment,andRecreation
Information
Utilities
CropandAnimalProduction
Mining,Quarrying,andOilandGasExtraction
TOTAL
25,855
387
1,159
580
1,925
493
671
417
3,394
422
166
850
369
385
49
153
131
8
4
3
37,420
All Michigan
(incl
Macomb
Co) Jobs
41,614
11,458
11,388
8,549
8,149
8,109
7,355
6,386
5,233
4,760
4,416
4,304
4,292
2,981
2,240
2,116
1,470
363
207
94
135,484 10
Thefollowingtableshowstheoccupationsthatcomprisethese135,500jobs.Asnotedearlier,
theMichiganjobsincludetheMacombCountyjobs(thereforethecolumnscannotbeadded
together).
Occupation
ProductionOccupations
OfficeandAdministrativeSupportOccupations
SalesandRelatedOccupations
ManagementOccupations
TransportationandMaterialMovingOccupations
FoodPreparationandServingRelatedOccupations
BusinessandFinancialOperationsOccupations
Installation,Maintenance,andRepairOccupations
ArchitectureandEngineeringOccupations
PersonalCareandServiceOccupations
HealthcarePractitionersandTechnicalOccupations
BuildingandGroundsCleaningandMaintenanceOccupations
ConstructionandExtractionOccupations
Arts,Design,Entertainment,Sports,andMediaOccupations
ComputerandMathematicalOccupations
HealthcareSupportOccupations
Education,Training,andLibraryOccupations
CommunityandSocialServiceOccupations
ProtectiveServiceOccupations
LegalOccupations
Life,Physical,andSocialScienceOccupations
Farming,Fishing,andForestryOccupations
TOTAL
All Michigan
Macomb
(incl Macomb
County Jobs
Co) Jobs
16,443
3,693
2,386
2,695
2,451
647
1,942
1,701
2,050
189
256
447
688
380
776
109
187
79
160
101
34
7
37,421
26,589
16,156
15,921
9,053
8,708
8,287
7,248
5,441
5,193
4,762
4,590
4,134
4,040
3,534
3,050
2,732
2,440
1,163
974
827
504
138
135,484
11