One in 10 Jobs Tied to Autos? Not so Fast
Bailout backers claim 13M jobs rely on auto industry but economists say it's 2M.
Dec. 19, 2009— -- In an effort to convince Congress to bail out the U.S. automakers, company executives, union leaders and politicians have made the compelling argument that the industry directly and indirectly supports one in every 10 jobs in the country. The only trouble is nobody wants to take ownership of that statistic, which is almost certainly false.
The figure is routinely attributed to the Center for Automotive Research, but officials at the nonprofit organization, which has ties to labor and government, claim they never said it and have no idea where it came from.
"It's such an exaggeration. I kind of grit my teeth every time I hear it," said Debbie Maranger Menk, a project manager at the center who researches the industry.
The Center, she said, estimates some 350,000 people in the United States are directly employed by automakers, both foreign and domestic, and that 2.1 million jobs are indirectly connected to the industry including suppliers.
That 2.1 million jobs figure is in line with what most economists estimate to be the number of people supported by vehicle manufacturing, according to economist Richard Block a professor at Michigan State University's School of Labor and Industrial Relations.
"One in ten is an over-estimate," said Block. "There are 130 million people working in the US. To say 13 million people are affected by the auto industry is a bit much. There are an awful lot of tentacles in the industry and it diffuses in so many ways -- metal producers, fabric producers, leather producers. There are 8,000 parts in a car. But it's probably not fair to downstream it all the way to some guy washing floors someplace near a factory.
"The figure is probably 2 to 3 million people affected, still a very large number, but nowhere near 10 percent," he said.
That economists have soundly discredited the one-in-10 figure has not prevented proponents of the auto bailout from trotting out the figure over the past three months.
In October, members of Michigan's Congressional delegation sent a letter to Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke that read in part: "There is no single segment of America's economy that is more critical to the financial well-being of millions of Americans than the automotive industry. One in 10 American jobs is related to auto manufacturing."
