The University of Miami says it adds about $6 billion a year to South Florida’s economy, the equivalent of holding a Super Bowl about every three weeks.
University officials on Monday touted an economic-impact report they commissioned as evidence of UM’s ability to drive growth, despite recent cutbacks. The report by the Bendixen Amandi Group comes months after UM laid off hundreds of workers in its medical arm and as it negotiates a new contract with Miami-Dade for providing county-run Jackson hospital system with doctors and surgeons.
“It’s important the community to know that the job creation continues,’’ UM President Donna Shalala said. “We have weathered what we hope will be the worst part of the recession, and we continue to grow jobs.”
The report uses year-old financial data, so it does not capture whatever impact may have come from downsizing at UM’s medical operation. But university officials said they doubted the overall impact would change, given the vast amount of money UM spends each day in the region’s $260 billion economy.
As one of Miami-Dade’s largest private enterprises, the University of Miami employs about 13,000 people and had an operating budget of about $2.4 billion in the fiscal year that ended May 31.The university earns about 75 percent of its revenue through its medical school, hospital, and other healthcare operations.
UM has cut overall payroll by about 200 to 300 part-time and full-time workers compared to a year ago, but overall spending is up about 4 percent at the school, according to UM financial documents and the school’s CFO, Joe Natoli.
To arrive at a yearly economic impact of $6.1 billion, the school’s experts assumed an additional $1.50 of spending for every $1 the university actually spends itself. The spillover effect is based on employees’ compensation seeping into the economy, outside companies benefiting from UM contracts, and students spending dollars that otherwise would remain out-of-state.
Claims of economic impact can be a controversial exercise. Economists say it’s hard to nail down exactly how much an economy benefits from any one institution or event, and they note organizations often benefit politically from claiming oversized support for a local economy.
Still, even skeptics who disagree on the extent of a university’s economic impact are clear that universities do boost a local economy. Philip Porter is a University of South Florida economics professor who is famous for skewering claims by the Super Bowl that it can boost a local economy by $300 million or more. Sent a copy of UM’s 40-page report, he emailed back: “It looks reasonable to me. Without digging into every assumption and every value, I can add nothing.”
In 2009, Harvard University published its own study, and claimed the Ivy League school with a larger payroll than UM added about $5 billion to the Boston-area economy. The University of Florida last year claimed a nearly $9 billion economic impact.
Studies like UM’s use “multipliers” to trace a dollar spent by the school as it is re-spent throughout the economy. The UM study released Monday detailed the process for reaching its calculations, but not the underlying numbers. Details are crucial to critiquing economic-impact studies, said Zoe Ambergis, an economist with the federal Bureau of Economic Analysis.