In 2012, San Diego's Mayor Jerry Sanders committed millions of dollars in city funding to help set the San Diego Convention Center's expansion, along with adding a 500-room hotel to support the project's development. The leaders of many cities across the country have allocated public subsidies to help finance the construction of such facilities, claiming that they will promote economic development. Mayor Sanders created a task force to analyze the costs and benefits of the expansion. After using an economic multiplier analysis, the task force concluded that the required public investment is justifiable, as the expansion alone would create nearly 7,000 permanent jobs. Identify three likely winners and three losers from such a project, and briefly explain. Please be as specific as possible and explain your answer

(Please use the following information as reference)

Who may benefit/lose from a multiplier effect?

Winners

• firms and workers in the non-tradable sectors (due to the increase spending in these sectors)
• firms and workers in similar areas or industries because of agglomeration/localization economies
• in areas where labor supply is steep (more inelastic), the wage increase for workers is larger (and the multiplier is smaller)

Losers

• because higher demand in one sector determines higher wages for all workers, all firms face higher wages
• firms that cannot change the price of their goods/services (those in the tradable sector) are particularly disadvantaged F this effect can reduce the multiplier
• in areas where labor supply is flat (more elastic), the wage increase for workers is smaller (and the multiplier is larger)