December 10, 2018
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How 25 jobs becomes nearly 2,000 jobs

Darren Fishell | BDN
Darren Fishell | BDN
A report by economist Chuck Lawton estimated the job impacts of Catalyst's Rumford mill adding a tissue machine. The company needed to show the project would create or retain at least 200 jobs, as a direct or indirect result of the investment, in order to get as much as $40 million from investors.

Catalyst Paper projects a new tissue-making operation in Rumford will support thousands of jobs — a projection necessary for getting access to taxpayer money it can use to attract investors.

Typically, the New Markets Capital Investment program caps investments at $10 million, but a change in 2012 pushed that cap to $40 million for manufacturing businesses that show the investment will create or retain 200 or more jobs.

The result is applicants for those higher dollar amounts, such as Catalyst, also commission economic impact studies to show how their investment will radiate into the community and benefit the state.

The report goes beyond just tallying up jobs to make the case for the investment that it says intends to “transform the entire Rumford mill into an integrated, three-pronged production operation involving pulp, paper and tissue.”

But for the new markets program, job estimates are the important part.

The Catalyst report shows that the company’s proposed tissue operation would employ 25 full-time positions. Another 37 positions would serve in support roles, which it counts toward the direct employment of the mill’s proposed tissue operation.

That number’s far short of 200. But it gets over that hurdle in two steps: counting all of the mill’s employees and then all of the people working in the mill’s supply chain.

That first step is important. By the study’s count, the direct and indirect impacts of the tissue operation alone only amounts to 149 jobs, short of the 200-job requirement “as part of the project for which the investment is made,” according to program rules.

But the mill makes the case that the new tissue project will improve the economics of its wood pulp production and the rest of its mill, also boosting demand from suppliers.

The analysis by economist Chuck Lawton (whose authored similar impact analyses for the program) counts all of the mill’s employees and beneficiaries up and down the supply chain, as a result.

That alone boosts the number of people benefitting from the project to 658, the mill’s projected employment level in 2020.

With all of the mill’s positions helped directly or indirectly by the tissue project, the analysis then fans that out to the outside loggers, engineers, mechanics, truckers, accountants and more. It does that using computer models of purchasing patterns between industries, provided by the software company IMPLAN.

The report estimates that impact is worth another 1,284 jobs, making for 1,942 total jobs it states will benefit from the tissue project directly or indirectly.

 


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