Earnings Multiplier (I-O)

The total earnings created in a region as a result of a single dollar of new earnings. This number includes the yield and the initial dollar addition. In other words, an earnings multiplier of 1.5 is made up of the initial dollar added (1.0) and the further yield (0.50).

An earnings multiplier of 1.5 means that for every dollar of earnings generated by a new scenario, a total of $1.50 is paid out in wages, salaries, and other compensation throughout your economy. This is important for understanding how a given scenario will affect not the number of jobs in your region, but the quality of those jobs. A scenario whose ripple effect brought two dozen lawyers and accountants into your region would have a much higher earnings multiplier than if that scenario brought the same number of indirect jobs into the region, but mostly in Food Services and Hotels.

Source: Emsi’s model, incorporating data from the Bureau of Economic Analysis (BEA).