In the debate over incentives to attract jobs, I’ve heard the term “multiplier effect”. What does that mean?

This term is often used in economic development discussions and it refers to the number of jobs created whenever a single high-paying job is added to the local economy. For example, when employees are brought into Carmel at a salary level of more than $80,000-plus, there is an immediate need for housing, which leads to work for realtors or rental agents, perhaps home builders, architects, moving companies. These employees will also begin shopping for local food, clothing, supplies and entertainment. They may already have families, which increases that spending.

In the end, a noted national expert by the name of Enrico Morette wrote a study on this top in which he crunched the numbers and came up with an average number of 5 additional jobs for every one high paid, high tech or innovation job – the kinds of jobs we typically pursue whenever we can.

Here are a few links you can follow to learn even more:
Multiplier Effects: Connecting the Innovation and Opportunity Agendas
Local Multipliers by Enrico Moretti

Authored by Laura Campbell, Ron Carter, Sue Finkam, Anthony Green, Bruce Kimball, Kevin Rider and Jeff Worrell