How does the multiplier effect relate to job creation?
The multiplier effect, as it relates to jobs, describes how an increase in employment triggers a chain reaction that generates more employment than the original increase. One theory propounds that for each primary job that is created, the equivalent of one to four secondary jobs are created. For example, if a corporation builds a logistics center, it will employ construction workers and their suppliers to build the facility, then it will employ those who work in the factory. Finally, the logistics center will stimulate employment in laundries, restaurants, health care and service industries in the neighborhood and region. The multiplier effect is a virtuous cycle, a self-perpetuating feedback loop. The reverse of the multiplier effect would represent a deleterious cycle, also a self-perpetuating feedback loop. As one primary job leaves a community, it has a reverse multiplier effect that leads to secondary jobs decamping.
