Buildings full of machines are tied to modest local job growth

A study of 1,584 U.S. data centers opened between 2000 and 2023 examines whether these facilities generate jobs for the communities that host them. Researchers compared employment trends in counties that gained data centers with trends in similar counties that did not, accounting for the fact that operators favor places with existing advantages such as reliable power, fiber connections and available land. Although data centers employ only a few dozen people directly, the researchers found that local employment outside construction changed little during the first two years after a county’s first facility opened. Three to five years later, host counties had about 1,000 to 1,300 more nonconstruction jobs than comparable counties.

The gains were concentrated in transportation and warehousing, professional and technical services, and real estate - not restaurants, shops or other consumer services. Larger investments were associated with more jobs: after accounting for later facility expansion, a 100-megawatt center corresponded to roughly 275 additional local jobs outside the facility. Growth appears to come partly from suppliers and related investment, with existing operators more likely to expand than new companies to arrive. The findings do not establish whether these jobs outweigh the costs to communities, including high electricity and water use, noise and tax breaks. Because the research predates the current wave of very large AI-focused facilities, its results may not apply to them; larger centers may not create jobs in proportion to their size.