Ripple effect from Boeing could make a big splash

Journal Record, The (Oklahoma City), Jun 11, 1996 by Darrell Morrow

The ripple effect from Boeing Co.'s proposal to bring more than 1,000 jobs to the metropolitan Oklahoma City area would be more like a tidal wave for the local and state economies, resulting in thousands of new jobs and millions in additional payroll.

Economists from the University of Central Oklahoma and the University of Oklahoma, making hurried calculations in response to Monday's announcement, varied somewhat in their predictions of the economic impact.

But they were in agreement that the news is definitely positive.

"That is a very good thing," said Joe Johnson, economist and acting dean of the College of Business Administration at UCO, in response to the announcement Boeing anticipates adding about 200 new jobs a year over the next five years or so.

The annual average income of $42,000 will create $8.4 million in payroll impact the first year.

Payroll from those jobs would create another $5.9 million in independent payroll in the community and 240 additional jobs, according to U.S. Department of Commerce multiplier factors, Johnson said.

The projections of David Penn, assistant director of the Center for Economic and Management Research in the College of Business Administration at OU, were based on the use of different economic impact models, however, and were even more optimistic.

"The 200 jobs at the end of a year, on an annualized basis, would produce $8.4 million in personal income. The multiplier effect of the purchase of goods and supplies and 330 jobs additional would be $8.9 million," Penn said.

"Total income effect of the combined 530 jobs would be a $17.3 million annualized figure," he said.

The projected 1,000 Boeing jobs at the end of five years, without considering inflation, will support another 1,700 jobs in the community for a total job impact of 2,700, he said.

The annual payroll impact of 1,000 people at the end of five years would be $42 million annually without consideration for inflation, and a multiplier effect of $44 million would create payrolls of $86 million annually, he said.

Boeing's employment growth throughout the five-year period would represent 10 percent of the 2,300 annualized manufacturing employment growth reported in April, he said.

"These jobs would be at a much higher level than manufacturing jobs. These are the kinds of jobs we like to see. The households of these workers will be spending more and paying more taxes," Penn said.

The Boeing employees' salaries may well be in line with averages with comparable industries in the metropolitan area, a review of the Central Labor Market Area 1995 by the Oklahoma Employment Security Commission reveals.

For example, the survey shows that the median hourly wage for the generic engineering category is $23, the same for electrical and electronic engineers. The overall category of aircraft mechanics -- the only category addressed in the survey covering aviation -- however, shows a median hourly wage of $13.

In April, the state had 4,700 employees in the category of aircraft and parts, according to the Oklahoma Employment Security Commission's monthly report.