It’s not hard to find articles that note that data center developments “created or retained permanent jobs,” as did Jack Dura’s North Dakota Monitor article Data centers in North Dakota have received millions in sales tax breaks, published on Wednesday.
A new Fact Brief published in MinnPost on Thursday suggests that job creation may not be a strong selling point.
Brian Arola asks “Do data centers have low rates of permanent job creation compared to other sectors?”
Here’s the Fact Brief:
Do data centers have low rates of permanent job creation compared to other sectors?
Data centers create jobs, but at a cost that puts them behind other industries in overall job creation.
by Brian Arola
Yes.
The data center industry lags behind other industries in permanent job creation.
Developers and city officials cite job growth as a reason to build data centers in Minnesota. But while these projects can be boons for construction, the rate of permanent employees is low in relation to investment costs.
Research from Virginia, a state with an established data center industry, found that projects there created one direct permanent job for every $54 million invested. In Iowa, a $576 million data center investment came with a requirement to create 31 jobs – about one job per $18.6 million. In contrast, across key sectors of the economy, a $1 million investment supports, on average, 17 jobs.
Some critics argue that jobs shouldn’t be a deciding factor when weighing data center proposals. The bigger issue, one analyst concluded, is governments handing out generous subsidies to attract developers.
This Fact Brief is responsive to conversations such as this one.
We’ve written more extensively about this topic in a different article. You can read more about it here.
MinnPost partners with Gigafact to produce Fact Briefs — bite-sized fact checks of trending claims. Read our methodology to learn how we check claims.
Sources
City of Hermantown Information Regarding Potential Google Data Center
Food and Water Watch Artificial Jobs: The Illusion of Big Tech’s Data Center Employment Claims
Cedar Rapids Economic Development Economic Development Assistance Contract
Federal Reserve Bank of San Francisco Understanding the True Benefits of Both Energy Efficiency and Job Creation
RealClear Markets Very Few Jobs Is the Whole Point of Data Centers
Photo: Transmission lines travel through the landscape near the site of a proposed data center in Hermantown, Minn., on Monday, July 20, 2026. Credit: Bridget Bennett/MinnPost/CatchLight Local/Report for America.
This MinnPost work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
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