Professor John Robertson OBA
From the Washington State, USA, based Lynwood Times yesterday:
A new independent study by Pennsylvania-based Martin Associates confirms the economic value of building the new Washington State Ferries hybrid fleet in-state, showing that each ferry constructed in the state would generate 1,298 jobs and $31.9 million in state and local taxes.
Washington State Ferries, which operates the largest ferry system in the nation, solicited bids this spring to build five new hybrid ferries over a six- to eight-year period with a budget of $1.3 billion. The new hybrid electric ferries have 160-car capacity to support growing rider demand and reduce greenhouse gas emissions in Puget Sound.
According to the study, for each of the five newferry boats constructed in Washington state:
- 1,298 local jobs would be created, directly and indirectly
- $131.1 million in wages and salaries would be paid to Washington families
- $338 million in revenue would be generated for Washington businesses
- $50 million of purchases of materials and services supplied by Washington businesses
- $31.9 million in state and local taxes would stay in Washington
Each ferry will cost more than $325 million to build and take approximately three years to construct. Of the 1,298 jobs, 577 jobs will directly be created by keeping ferry construction in-state and the prevailing wage workers will average $104,000 in annual wages and salaries. This is higher than the statewide average salary of $81,550, according to the U.S. Bureau of Labor Statistics.
Given the above analysis the MV Glen Sannox final cost of around £300 million must surely have had comparable benefits to those listed above.
You may wonder how $325 million government investment in a ferry can generate a greater amount in the economy. I’m no economist but I’ve heard of a multiplier effect. That’s what is expected in Washington State. There is no reason to think it has not already happened in Scotland, due to the Glen Sannox project and continues to do so due to the Glen Rosa.
The Multiplier Effect Explained:
The multiplier effect is one of the most important concepts you can use when applying, analysing and evaluating the effects of changes in government spending and taxation. It is also good to use when analysing changes in exports and investment on wider macroeconomic objectives.
The multiplier effect occurs when an initial injection into the circular flow causes a bigger final increase in real national income. This injection of demand might come for example from a rise in exports, investment or government spending.
The multiplier coefficient itself is found by:
Final change in real GDP / Initial change in AD
Example: If the government increased spending by £5 billion but this caused real GDP to increase by a total of £12 billion, then the multiplier would have a value of 12/5 = 2.4
The multiplier effect arises because one agent’s spending is another agent’s income. When a spending project creates new jobs for example, this creates extra injections of income and demand into a country’s circular flow.
There’s video at the link: https://www.tutor2u.net/economics/reference/multiplier-effect
Talking-up Scotland 'Albatraz' 
‘The multiplier effect is one of the most important concepts you can use when applying, analysing and evaluating the effects of changes in government spending and taxation.’ It’s hard to understate this!
A TuS blog post (May 19, 2025) entitled How the ‘Scottish’ media have singularly failed to investigate and fully report on the true state of the ferry services’ had this: ‘on the decision taken to procure two large CalMac ferries from Ferguson’s and then to nationalise the yard, the mainstream media studiously avoids any consideration of the economic benefits derived from sustaining employment in the yard and its domestic supply chain. They studiously avoid any reflections on the ‘counterfactual’ – i.e. assessing what would have happened if the ferries had not been procured from Ferguson’s and the latter not nationalised.’ To put this another way: They studiously avoid any consideration of the multiplier!
Every time the UK government allocates a portion of its expenditure in the GERS report to Scotland – i.e. spend of Scotland’s tax revenues that Westminster makes on Scotland’s ‘behalf’ – and that money is spent outside Scotland, the Scottish economy has no or at best a much reduced or zero (depending on e.g. Scotland-based supply chain involvement) economic multiplier.
We in Scotland have a much reduced or perhaps approaching zero immediate economic benefit from the spend compared to that spend being both for and made within Scotland. If spend by Westminster/Whitehall on Scotland’s behalf is made in England, the economic benefit – as measured by economic output or employment or income (employee compensation) or in terms of Gross Value Add (GVA) – will accrue to England’s economy.
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As well as the increase in spending, there is the training of the apprentices, their enhanced skill set and opportunities as well as their continued employment in Scotland.
It does sicken me that these so called “Scottish journalists” would quite happily close down Fergusons just because of the support that was given to them by the SNP.
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The last ‘Scottish ” journalist on The Herald died with the passing of Ian Bell . R.I.P.
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I’m no economist either, but just as there is a multiplier effect in transport infrastructure, there is also a divider effect, shutting down the Paddy line in the 1960s and effectively turning D&G into a forgotten backwater being just one example….
Such a multiplier effect has been cited for years in solving the problems of rail links across north england to a deaf Westminster, preferring HS2 from nowhere to nowhere else…
You can’t really compare one part of Washington State to an island such as Arran, but you can certainly argue the capability for the multiplier by virtue of the investment, to counter the divider arguments of the political agitators.
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The multiplier effect was graphically illustrated for me a few years ago. The Kelvingrove Art Gallery had a special exhibition to mark the anniversary of Charles Rennie McIntosh’s birth or death. I cannot remember now which it was.
The exhibition was not solely confined to CRM’s works but covered much of what was going on in Glasgow and the surrounding area at that time. Carpets, textiles, metalwork, furniture making, publishing etc. All of those industries and thus CRM’s and others ability to get his designs for furniture, fittings etc was made possible because of the shipbuilding industry. Decorative metalwork, furniture, carpets, textiles etc were all required to fit out the ships being built on the Clyde. The presence of these craft industries and the skills they nurtured fed over into areas beyond the shipyards and made for a vibrant economy.
Therefore the ability of shipbuilding to positively impact the economy of the local area and nurture skills in demand beyond shipbuilding while it may be unquantifiable should not be discounted.
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Great example. I’ll file that away.
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