Economist Jeremy Horpedahl has sparked discussion on social media regarding the actual job creation impact of data centers, questioning the common narrative surrounding such developments. In a recent tweet, Horpedahl directly challenged the perception of limited employment, stating, > "But the data center will only create a few hundred jobs" How many jobs was the vacant lot creating?"
Horpedahl, an Associate Professor of Economics at the University of Central Arkansas and Director of the Arkansas Center for Research in Economics (ACRE), is known for his work in public finance and economic policy. His tweet implies a critical perspective on how the economic benefits of large infrastructure projects, like data centers, are often evaluated, suggesting that even a few hundred jobs represent a significant improvement over undeveloped land.
Industry analyses indicate that while data centers require substantial capital investment, the direct, permanent operational jobs they create are typically in the range of 50 to 200 per facility. These roles are often highly skilled, encompassing IT specialists, engineers, and security personnel, and command higher-than-average salaries. However, the construction phase of a data center can generate hundreds or even thousands of temporary jobs, contributing significantly to local economies during development.
Beyond direct employment, data centers are recognized for their broader economic ripple effects, including indirect jobs in supply chains and induced jobs from increased local spending by employees. Studies by organizations like the U.S. Chamber of Commerce have highlighted that each direct data center job can support several additional jobs in the wider economy. These facilities also contribute to local tax bases through property taxes and sometimes through specialized data center tax incentives.
The debate often centers on whether the direct job count justifies the significant tax abatements and incentives frequently offered to attract data center developers. Horpedahl's comment underscores a common argument among proponents of such projects: that even a relatively small number of high-quality, permanent jobs, coupled with substantial investment and tax revenue, far outweighs the zero economic output of an empty plot of land. This perspective emphasizes the net gain to the community, rather than focusing solely on the direct job figures.
