The Obama Administration has been busy touting the number of jobs saved or created by the $787 billion “stimulus” bill, otherwise known as the American Recovery and Reinvestment Act (ARRA). According to Recovery.gov, Illinois can thank stimulus spending for 24,448 jobs.
Time to break out the champagne and celebrate, right? Not so fast.
A closer look at the underlying ARRA data shows serious flaws with the jobs calculation, along with concerns over what kind of positions were created (or saved) by the stimulus. Read on for my analysis; you can access the Illinois data for yourself by clicking here.
“Thinking” Doesn’t Equal Jobs
Entities receiving ARRA money must provide certain information regarding the award, including the recipient name, award amount, project description, description information on job creation, and the number of jobs.
Given that recipients are responsible for providing the relevant information, it’s reasonable to expect some errors in the reporting process. Alas, in certain cases the jobs numbers seem to come out of thin air.
For example, the Illinois Institute of Technology was awarded $97,900 to “purchase a high performance computer cluster” and related software. One job was listed as saved and/or created. By what means? The associated “job creation” entry surmised: “I think the vendor of the computer equipment can retain about one job for this amount of purchase.” So the group thinks that the vendor will save about one job from the purchase. That’s a unsubstantiated guess, as best. Still, that one job that was added into Illinois’s statewide jobs tally.
Another oddity was 0.01 jobs saved or created from a $78,125 grant awarded to the Illinois Coalition Against Domestic Violence. They “coordinated and hosted four regional meetings for legal advocates to discuss emerging legal issues domestic violence survivors are facing.” The 0.01 jobs created were “administrative positions to coordinate and host funded activities in quarter.” Really? Were 0.01 jobs actually created, or was this a convenient way to plug in a non-answer during the reporting process? Either way, 0.01 job was added to the statewide total.
For certain projects, the descriptive “job creation” information does not match the numerical “number of jobs” entry.
Consider the $1,434,853 public housing construction award for the Granite City Housing Authority. Under “job creation” it notes “ARRA funds have resulted in the creation of 3.24 full time individuals.” Yet the Housing Authority lists 61 jobs under “number of jobs.” It’s a big leap from 3 jobs to 61 jobs, yet the 61-job figure was used in calculating the statewide total of 24,448 jobs created.
Also consider an $180,548 award for Head Start that listed 81.75 jobs under “number of jobs” but entered “none” under “job creation.” The description makes no mention of new jobs (rather, staff received compensation increases and professional training). Still, the 81.75 jobs figure was used in the statewide total.
Another entry for Head Start noted they would use $169,279 to “hire 2 additional staff and increase compensation of staff through a COLA to improve overall quality of program.” The two jobs created were “Interventionist Manager and FCP Manager.” Yet under “number of jobs,” they listed 63.65 positions. These 63.65 jobs went toward the statewide jobs total, even though it is clear that just 2 jobs were created.
The Children’s Home & Aid Society of Illinois used $87,592 for “COLA & Training for existing staff” and counted 34 jobs saved and/or created. How exactly did giving a cost of living pay adjustment for existing staff and providing training save or create jobs? Beats me.
In many cases, we’re presented with a clear disconnect between project descriptions and jobs created. It’s another reason taxpayers, lawmakers, and the media have good reason to be suspicious of the stimulus’s job claims.
Another concern is that temporary student jobs – some lasting just a few months – are counted as full jobs created:
- For example, the University of Illinois received a $10,584 award to provide a student with a “summer research experience” in “Molecular Mechanisms of Axonal Transport.” Jobs created: 1.
- Loyola University received a $33,171 award and created three “summer research student” intern positions to study the “effects of alcohol on the body which is valuable information that they can bring back to their peer groups.” Full time equivalent jobs created: 2.
- Illinois State University used a $24,325 funding supplement to “hire a number of undergraduate student workers for part of the summer (beginning in June) and extending into the fall semester (through October, when the funding ends).” Jobs created: 1.9.
More than 500 of the Illinois jobs touted by Recovery.gov are “federal work-study” positions. In case you’re not familiar with the work-study program, these are positions of “part-time employment to assist students in financing the costs of postsecondary education.”
According to the entry for the Workforce Investment Act’s Dislocated Workers Program, stimulus funding allowed “over 16,000 youth to participate in summer employment opportunities and work readiness training.” How many jobs resulted from this? “Recovery Act funded education and training programs will not have a significant number of full-time jobs created.” Even so, 2,030 jobs were listed as saved and or created – making it the third largest stimulus job creator for Illinois.
Short-duration research positions, work-study jobs, and summer readiness training – while nice for those who qualify – are not the long-term, self-sustainable job opportunities that many Illinoisans hoped would result from the government spending $787 billion nationwide. Taxpayers will continuously have to pony up if these “jobs” are to stick around for the future.
Another item that caught my eye was the overwhelming number of government positions saved and/or created by stimulus dollars.
You’ll remember that back in January 2009 President Barack Obama promised that 90 percent of the jobs saved or created by the stimulus would be in the private sector. So far, that’s not the case.
If the 90 percent promise held up, 22,003 of the Illinois jobs would be in the private sector. But looking at the data, the big job saver is a government entity, otherwise known as “Illinois, State of.” Some 14,233 jobs were saved in public education. The “Chicago Transit Authority” is another big job saver and/or creator, accounting for 2,071 jobs. Seen in this light, the stimulus was more of a state and local government bailout than a private sector engine starter.
But are the underlying government job numbers even trustworthy? The Chicago Tribune’s Watchdog took a closer look at the education job claims, and they found that “those statistics, compiled initially by the Illinois State Board of Education, appear riddled with anomalies that raise questions about their validity.” Some schools were credited with saving more jobs than are on payroll. Authorities are now revising the numbers.
Waste, Pure and Simple
Government spending is often criticized because it takes resources away from the private sector, where market forces rewards the efficient use of resources. When politicians spend “free money” from the federal government, it is often used for less-than-productive purposes.
Case in point: $1,108 in stimulus funds was used to install a new “thermoplastic-coated steel” picnic table in “North Fork of Pound Lake Campground” in Batavia, Illinois. Jobs created? “No new positions were created as far as we are aware.”
That’s your tax dollars at work, folks.