IRRRB’s Paying Delta $36,875 Per Year Per Job for 32 Jobs

Check out this headline:

Delta Air Lines gets $5.9M to add 107 jobs to Iron Range call center

Now, check out the terms of the deal:

The IRRRB board today approved the deal that requires Delta to keep 525 employees at the facility, up from the current 418.

Delta officials said they hope to begin the expansion within weeks.

The 12-year “forgivable loan” starts to come due in five years, but the payments will be forgiven if employment stays above 450.

This is a throwback to word problems done in school.

The questions could be:

1. Compared to today, how many more jobs does the company need to maintain in order to have the $5.9M loan forgiven?

A) 32 jobs
B) 107 jobs
C) 418 jobs
D) 450 jobs
E) 525 jobs

2. How much did the state IRRRB (more info on this correction here). spend per year to create those jobs for five years? (Show your work)

A) $5.9M / 32 jobs / 5 years = $36,875 per job per year
B) $5.9M / 107 jobs / 5 years = $11,028 per job per year
C) $5.9M / 418 jobs / 5 years = $2,822 per job per year
D) $5.9M / 450 jobs / 5 years = $2,622 per job per year
E) $5.9M / 525 jobs / 5 years = $2,247 per job per year

3. What is generally considered to be the role of the CEO?

A) Maximize shareholder value.
B) Create jobs on the Iron Range.
C) Make sure you have plenty of leg room.

4. A recent job posting for the Delta Air Lines call center in Chisholm, Minnesota listed the starting salary as $1,850/month for “Reservations Representative Specialty Sales and Support” positions. How much would that be per year?

A) $22,200/yr
B) $18,500/yr
C) $37,000/yr
D) $42,500/yr

5. Assuming the answers to all of the above questions have been “A”, how much per year per employee would Delta end up paying to employ those new employees?

A) -$14,675 / per year
B) $0 / per year
C) $14,675 / per year
D) $22,000 / per year
E) $36,000 / per year

Unless I’m reading this incorrectly, I think The Fonz could ace this test.

3 thoughts on “IRRRB’s Paying Delta $36,875 Per Year Per Job for 32 Jobs”

  1. Ed – great story problems! They were always my favorite in math and I guess they still are. I’m not entirely sure why the state feels so beholden to NWA/Delta, after all they moved HQ shortly after the last forgivable loan expired, did they not?

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