Those 50,000 jobs Micron could create in New York? We dug into what that really means

Syracuse, N.Y. – Micron Technology and public officials have told us for more than a year that Micron’s planned semiconductor plant in Clay would create 50,000 jobs: 9,000 at the plant and 40,000 more in the community.

“Fifty thousand. Good-paying. New York jobs,” U.S. Sen Charles Schumer said at an October 2022 news conference, pausing between phrases for emphasis.

In Syracuse last week, Micron’s executive vice president of global operations, Manish Bhatia, said the plant “has the potential to create 50,000 high-paying jobs in Central New York.”

No doubt, thousands of jobs at Micron or directly related to the chip maker would pay $100,000 or more, according to Micron and an economic impact study done for the state. Overall, about half of the jobs in Central New York would come with average annual paychecks of $60,000 or higher, according to the state’s study.

But that 50,000 estimate also includes hotel workers and bus drivers, waiters and day care workers – the usual suspects promised in economic development multipliers. Those jobs wouldn’t all be good-paying or even necessarily full-time.

At times, Micron has given the impression that the 40,000 spinoff jobs would be directly connected to the fabrication plants, or fabs, it plans to build in Clay. In documents filed with government agencies, Micron said its huge development would create “over 40,000 additional jobs from suppliers, contractors and other businesses supporting the proposed chip manufacturing facility.”

But those characterizations of the job numbers don’t accurately reflect the economic impact report from which everyone is getting their numbers.

That report was commissioned last year by New York state and conducted by a Massachusetts consulting firm that specializes in economic impact studies. A careful reading of the report reveals that it doesn’t say all of those 40,000 spinoff jobs created across the state are in the supply chain, or that they’re all high-paying.

In fact, the biggest share of those spinoff jobs — just over 6,000 — would be state and local government employees, the report says. The Micron supply chain would account for another 6,000. That’s about the same number of jobs that would spring up in lower-paying, often part-time fields of tourism, dining and entertainment.

REMI consulting firm, of Amherst, Massachusetts, was paid about $50,000 to do the study for New York state’s Empire State Development department. That’s the principal state agency working on, and touting, the Micron project.

Micron says it will spend up to $100 billion to construct the fabs in Clay, and spend several billion a year in Central New York on operating expenses. That money is expected to send a cascade of spending down the line, from companies that sell to or work for Micron down to the companies those companies do business with, and so on.

The 50,000 jobs would be spread across the state, but more than 80% of them would be in Central New York.

Onondaga County Executive Ryan McMahon, who helped land the Micron deal, said the jobs at Micron and at suppliers will largely pay $100,000 a year and up. He said the effects of the spending from those employees will ripple through the local economy.

“You’re going to be talking about more hotels, more restaurants, more financial service jobs, more medical jobs,” McMahon said. “I think it crosses every kind of category.”

Syracuse.com took a closer look at the projected 50,000 jobs. Here’s what we found:

• Construction will be the first industry to boom as Micron starts building the first of four fabs, each covering 1.2 million square feet of land.
• One of the biggest categories of new jobs is, surprisingly, government workers, according to the estimates. Local and state governments would employ as many people as Micron suppliers.
• Thousands of the jobs will be at Micron and related high-tech industries, and they’ll pay well. It’s unclear how many of those jobs will go to local residents and how many to out-of-towners.
• Job growth won’t happen all at once, and it will ebb and flow over time. Construction would tail off in the 2040s, when the complex would be fully built. Other job categories will rise and stay as the region’s population climbs.

What are all these jobs, anyway?

The report sorts jobs into a handful of broad categories. REMI provided a detailed spreadsheet to syracuse.com that tallies jobs by more than 60 categories used by the state Department of Labor.

That spreadsheet holds some surprises.

For example, the biggest category of newly created jobs isn’t even in the “computer and electronic manufacturing” category. It’s “state and local government,” at an average of 6,197 jobs each year. That’s calculated over the 30-year life of the study, from 2025 to 2055.

As the population grows, so will the need for more police officers, firefighters, teachers, snowplow drivers and other municipal employees.

Those are the average number of jobs that would exist over time compared to today. It’s important to note that the types of jobs would fluctuate dramatically during those 30 years.

For example, construction is logically the first profession that would see a big burst in hiring, with an estimated 9,700 jobs by 2025, the year Micron says it will start building the first fab. When Micron is putting the finishing touches on the fourth and final fab in the 2040s, REMI predicts there will be just 1,200 related construction jobs.

Jobs in the computer and electronic manufacturing category, by contrast, grow slowly over time as Micron and suppliers build out. There would be just 14 jobs in that category in 2025, REMI predicts, but more than 8,000 by 2055.

Micron-fueled employment would peak in 2037, at nearly 62,000 jobs. That’s the point at which Micron has ramped up operations and is producing chips in the first two fabs, while construction proceeds on the third and fourth fabs.

In 2055, when all the construction is done and Micron is firmly seated in the community, about 51,000 jobs would owe their continuing existence to the Micron development, the report estimates.

There would be big gains in health care (3,263 new jobs in 2055). Other parts of the community would also see increases. For example: churches and nonprofits (576), financial services (279), and garbage removal (99).

Of course, projecting anything 30 years from now is a hazardous endeavor. So many things could change the trajectory of Micron’s plans and the community’s response: China’s rise as a semiconductor producer, innovations by Micron’s competitors, an economic crash like in 2008 and a global pandemic, to name a few.

Who would fill all these jobs?

Estimating job numbers using a computer model is one thing; finding enough people to fill all those envisioned jobs will be another challenge.

Micron says it’s confident its agreement with local unions will provide the highly skilled workers needed to build the fabs, and the company’s efforts to recruit and train will help fill the fab floors as they open.

But the federal CHIPS Act, which Micron is depending on to provide billions of dollars to build the Clay complex, has spurred an unprecedented building of big fabs in the United States. Industry experts worry that there simply won’t be enough trained people to build the projects announced or under way in New York, Ohio, Texas and Arizona.

“Trades like welding, plumbing, electricians, that you need to actually do the construction — we’re short about 200,000 to 300,000 of those people,” said Bill Wiseman, who studies the semiconductor industry for McKinsey & Co., a management consulting firm.

There’s also a shortage of technicians who install and maintain the complex fab equipment and the engineers who oversee the dozens of chemical processes that turn silica wafers into chips, Wiseman said.

“To run a modern fab, you need all three of those: You need to build it, you need to be able to install the equipment to maintain it, and you need to be able to understand when something goes wrong, how to fix it,” he said.

Construction is expected to start next year on the first fabrication plant, or fab, and finish in 2043 on the fourth and final fab. An average of 5,000 construction workers, mostly union members, will be needed continuously for 20 years.

A Micron executive says the company usually hires most of its employees locally.

“When we look at our operations in other parts of the country, we tend to hire 60-70% of our employees from the local area,” said Carson Henry, the company’s senior director of strategic U.S. expansion. “While we’re going to generate a lot of jobs and a lot of economic activity, we want to make sure we involve the community that’s already here.”

But some workers will come from outside of Central New York, and even from overseas.

About 8% of Micron’s current U.S. workforce in jobs similar to those in Clay are from other countries, working on Micron-sponsored visas, a spokesperson said.

Many of the 50,000 created jobs will pay well, to be sure. Micron says its managers and executives earn about $166,000 a year. Engineers get nearly $95,000. The lowest pay is $66,000, for technicians, the company said when it applied for a $300 million tax break this summer.

McMahon said the lower-tier technician jobs will be largely local hires, at first, because they can be trained more quickly. When it comes to engineers, with bachelor’s or advanced degrees, we’ll likely see a greater percentage of those coming from other parts of the country and world.

Many engineers, he said, will likely come from Micron’s other fabs in Idaho, Virginia and Asia.

“You’ll have people who want to move from Boise here, from Manassas and Singapore,” he said. “There’ll be others that will be recruited out of college from the big 10 schools, from Stanford and Cal.”

And that’s not necessarily a bad thing, McMahon said.

“We want to source them locally, but we want to grow and we want people coming here as well,” he said.

Can we trust the numbers?

Economic impact reports like this one assume that when a business comes to town, it hires people and spends money. Those employees spend money, too, on everything from new houses to restaurant meals. And the builders who built those homes and the restaurateurs who served those meals are also spending money.

There’s a complicated formula that estimates how many jobs and how much income and spending those jobs will create across the economy. The study’s bottom line, though, is that for each job at a Micron fab, 5.5 jobs would be created across the state, mostly in Central New York.

Critics say these kinds of overly optimistic reports simply give the governments what they want to hear. New York state plans to give Micron more than $5 billion in tax breaks, so it’s in the state’s best interest to have a report that gives a huge jobs number, critics charge.

“These guys have an incentive to make this look as big as possible,” said Ken Giardin, director of research at the Empire Center, a think tank in Albany. “I don’t blame the people who wrote this report. I fault the elected officials who are holding it as ironclad evidence that this is the right approach.”

And what these reports omit is as revealing as what they purport to show, critics charge. While the Micron report details the impact of the state’s largesse toward Micron, the consultants never look at what else that money could have been spent on and how many jobs it might have created.

“Are there other things that the state could be doing with this money?” Giardin asked. “Those findings will help us better gauge what we are allegedly getting here.”

Tom Barkley, a finance professor at Syracuse University’s Whitman School of Business, concedes that the reports are sometimes “overly glossy.” Yet they’re a necessary tool for planners who are trying to figure out how to best respond to a big development.

“Are they going to get everything correct? No, they’re not,” Barkley said. “You do your best guesswork by making a plan and trying to think of all the eventualities and trying to forecast numbers as best as you can.”

Supporters of economic studies say their methodology is objective and rigorous, and the assumptions and calculations in their models are based on years of research. Yet few of these studies have been tested in the real world. Rarely does an agency go back to a report and say, “So did this actually happen?”

Peter Evangelakis, the project manager for REMI, said the model the company uses was developed in 1980 and has been continually refined since then.

“The revenue model is built on decades of peer-reviewed academic literature,” he said.

The state chose REMI because it has a solid reputation in conducting these kinds of studies, said Jeff Janiszewski, senior vice president for strategic business development for ESD.

“The economics world, when it comes to assessing the true value of a project that we are contemplating, has always pointed us back to this firm as having the most valid model,” Janiszewski said .

Evangelakis and Janiszewski concede that it’s hard to revisit a project impact report years later and test how accurate it was.

“It’s difficult to isolate ‘the’ project and its impact when other stuff has been happening in the economy that has an effect,” Janiszewski said. “You can’t put it in its own lane so easily.”