400 Jobs Is Just the Start of Chobani's Impact on Valley

Labor experts say the coming Twin Falls Chobani plant will have a ripple effect that extends well beyond what the yogurt maker churns out.
2011-11-05T02:00:00Z 2011-12-24T02:20:59Z 400 Jobs Is Just the Start of Chobani's Impact on ValleyBy Ben Botkin bbotkin@magicvalley.com Twin Falls Times-News
November 05, 2011 2:00 am  • 

TWIN FALLS • For south-central Idaho, the economic impact of Greek yogurt manufacturer Chobani setting up a production facility in Twin Falls extends beyond the 400 employees who will work there.

Here’s a look at what’s expected:

Multiplied jobs: A “jobs multiplier” is economist lingo for a measure of the jobs created by other companies reacting to the economic benefits that a large employer like Chobani will bring.

The jobs multiplier set by Moscow-based Economic Modeling Specialists, Inc., for Chobani is 7.57. That means when you take the company’s 400 employees and multiply that figure by 7.57, you get the total amount of additional jobs anticipated: 3,028, with a payroll of $135.4 million. That includes the 400 jobs at Chobani and another 2,628 jobs elsewhere that are a result of the company’s economic boost.

What it means: Jan Roeser, a regional economist with the Idaho Department of Labor, said that estimate creates a large ripple effect for the economy.

Not every new employer that hires 400 people will have the exact same projections for indirect new jobs created. For Chobani, the numbers are high because the raw product for the yogurt — milk — is found within the region, so local sectors like crop and animal production are expected to benefit, Roeser said.

But not all those additional jobs projected will be in dairies and farms. The scenario also factors in what the impact will be for industries like restaurants, real estate and health care.

Getting there: The process of reaching that jobs multiplier isn’t simple. The Idaho Department of Labor enlisted the services of EMSI to simulate what impact a new business will have on a region’s economy, using data like census numbers, sales trends, and the required goods and services.

“The economy is made up of these interdependent relationships,” said Joshua Wright, communications manager for the EMSI.

In other words, a business doesn’t exist in an economic bubble. The dairy farmers who will sell milk to Chobani will buy feed from a supplier for cows. Employees use their paychecks to dine out at local restaurants, and use their medical insurance benefits at hospitals.

Unemployment: There’s no question that Chobani’s presence will reduce the region’s current 7.9 percent unemployment rate. By just how much, though, is difficult to forecast. In the eight-county region of south-central Idaho, an estimated 7,553 people are out of work. But calculating what the new unemployment rate is more complex than simply subtracting 3,028 from 7,553.

Variables include people moving from out of the area to fill new jobs and employed workers leaving one job for a new one at Chobani. The upside is that the movement will create vacancies elsewhere that unemployed people can apply for, Roeser said.

Another bright spot: Chobani’s founder and chief executive officer Hamdi Ulukaya has said the region’s workforce was a key selling point that played a role the company’s decision to come to Twin Falls.

Ben Botkin may be reached at 735-3238.

Copyright 2015 Twin Falls Times-News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(2) Comments

  1. CJCarlin
    Report Abuse
    CJCarlin - December 15, 2011 9:34 pm
    Our infrastructure is fine. Remember all that road construction along Washington and around the college?
    I think it would be much more productive to be optimistic. Instead of assuming this business will go belly-up, why not hope for a positive change for once? This town has been struggling for a long time. I look at this as good for the community, especially if it brings jobs and revenue.
    Being so negative doesn't do any good whatsoever.
  2. Tumbleweed49
    Report Abuse
    Tumbleweed49 - November 07, 2011 5:11 am
    The problem with bringing in new industry is when the business moves or goes broke, your stuck with people who don't have jobs. This is usually people that have been drawn in so it can actually increase unemployment. Maybe we are better off being a Farming Community? Too much industry can cause poverty down the road.

    We don't have an infrastructure in place to handle additional people. Roads and Police Department needs increased first. Just my opinion. First things first!! This is getting the cart in front of the horse!

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