Council Bluffs Daily Nonpareil, IA
06-21-07
Economists: Google is good
Phil Rooney
With Google landing in Council Bluffs, the benefits can be anticipated to spread
throughout the surrounding miles, according to a pair of university economists.
Creighton University economist Ernie Goss looks for people to notice that Google
has arrived in the region.
"The primary reason is, of course, it's new to the area and brings new dollars to
the area," he said. Those jobs will have relatively high wages when compared to
many jobs in the area.
"Google, of course, has the reputation of being a very good company to work
for," Goss said.
But, he advised, people should know that the wages paid in California may not
be the same as those paid in Council Bluffs, simply because the jobs are
different.
The benefits will flow to both sides of the Missouri River, Goss said, and
Nebraska will benefit from the development just by being in the area. The
Cornhuskers state also benefits by not having to fund the incentives that brought
the company to the area.
Much of the money paid in wages will be spent in Omaha, Goss said, benefiting
that city in terms of sales tax receipts.
If Google is a $100 million operation, it can be expected to create more
opportunities throughout the area, he said. For every $100 million of Google
impact, the area can expect another $85 million spillover through retail sales,
banking revenue and other economic activity.
"For every one of those jobs created there, there will be another one and a half
spillover jobs," Goss said. "So not bad."
Overall salaries added to the area will be $66 million annually, for Google and
non-Google, he said. There will be people working at the server farm from all
over the metro area, so Council Bluffs and Omaha both will benefit.
"It's good for both," he said.
Liesl Eathington, director of the Office of Social and Economic Trend
Analysis at Iowa State University said the benefits depend on a number of
things.
For example, the capital investment leaves the community with a building and an
infrastructure, but questions remain as to whether or not there will be spin-offs.
From a regional development perspective, the good-paying jobs are more
interesting.
"I'd say 100 jobs paying well above the state-wide average is definitely a coup for
the area," Eathington said.
Another thing to look at is to see how much of the company's operating expenses
are going to be purchased in the area, she said. Eathington said it's important to
consider what kinds of inputs will the facility need from the community?
On top of that there is the workers' spending, something that can increase the
demand for goods and services, and that will have a ripple effect on the
economy.
Eathington said if the region is trying to build up its image as a place to do
business, Google can help.
"It's a big name. It's a big deal," she said.