Stimulus creates 640,000 jobs

Let’s see… $150 billion to create 640,000 jobs works out to a cost of $234,375/job created. This works out to an average annual salary of about $40K for about 6 years for each job. How many of these jobs are going to last that long?

There is no way to determine how many jobs were “saved” because no one collects this type of statistic. Also, coming a day or two after this makes me wonder how many jobs were actually created and how reliable this new statistic is. The article mentions that out of this 640K jobs “as many as 30,000 jobs [came] from private companies.” Where did the other 610,000 come from? Government jobs?

Finally, at a cost of $234K per job, couldn’t more people have been helped by just giving everyone cash?

From CNN:

WASHINGTON (CNNMoney.com) — The largest stimulus program in the nation’s history has created or saved about 640,000 jobs, the Obama administration said Friday.

Based on approximately $150 billion in spending from the $787 billion recovery package, the tally is the first broad, concrete look at the stimulus program’s impact on the economy. The numbers are drawn from tens of thousands of reports from state and local recipients and include as many as 30,000 jobs from private companies.

The Obama administration continued to maintain that the actual number of jobs created so far is closer to 1 million. The reports did not reflect measures such as tax cuts, boosted unemployment benefits or jobs created indirectly by stimulus spending. A total of $339 billion has been drawn down so far under the American Recovery and Reinvestment Act.

“Every dollar being spent from Recovery Act is helping put someone back to work,” said Vice President Joe Biden. “My message today is that we’re on track.”

The Obama administration is expected to announce further details about jobs on Friday afternoon, after the government posts complete reports online on its stimulus data tracker Recovery.gov. Already, the administration revised the figures downward from an initial 650,000 announced early in the morning. Each job cost $234,000 to create.

Friday’s numbers are sure to be used by both Democrats and Republicans to further their arguments about the value of stimulus.

The White House maintains that the funding saved the country from slipping into a depression and fueled the 3.5% growth in the economy in the third quarter.

Republicans point to the rising unemployment rate, now at a 26-year high of 9.8%, as a sign that the recovery act is a failure. Other critics say that the administration’s 1 million job figure is based on math calculations that are impossible to verify.

“The trillion dollar ‘stimulus’ isn’t working, and no amount of phony statistics can change that,” said House Republican Leader John Boehner, R-Ohio. “The president and his economic team promised the ‘stimulus’ would create jobs ‘immediately’ and unemployment would stay below 8%. But America has lost more than three million jobs since then, and the unemployment rate is nearing double digits.”

The administration’s announcement also underscores how difficult it is to reliably size up the effectiveness of the massive stimulus program.

Recipients were tasked with calculating the number of full-time positions directly created or saved with stimulus funds as of Sept. 30. This is far from a simple, straightforward process. The instruction booklet alone was 60 pages long and the form had 99 data fields to complete, said Tim Dowd, chief executive of Input, a research company that follows government spending for contractors.

Two weeks ago, the government provided an early glimpse of the challenges of transparency when it reported that 30,383 jobs had created by stimulus-funded federal contracts given directly to companies. Within hours, errors emerged, including an initial report that a French vaccine maker received the largest stimulus contract, $1.4 billion. In fact it received an award one-100th the size.

Compiling state and local recipients’ data is an even tougher lift. Though federal officials have been fact-checking the reports for the past three weeks, there are likely to be many mistakes.

“There will be a lot of discrepancies in the data,” said Dowd. “Those discrepancies will grow significantly, not because of malicious intent but because of the complexity.”

Among recipients’ biggest hurdles are accounting for part-time or short-term jobs created, for people working on multiple stimulus projects and for positions saved recovery act funding.

Also, the job numbers do not include indirect positions, such as the deli worker who delivers lunch to the stimulus-funded construction sites or the concrete company that has to ramp up production to handle an increased number of contracts.

“The job numbers are at best going to be a rough outline of how the recovery act is impacting the economy,” said Craig Jennings’ senior policy analyst at OMB Watch, a government watchdog group.

States say the money is working

Several states have provided a sneak preview at their figures. California, for instance, released the results of its initial report filed on Oct. 10, which showed that stimulus saved or created 100,000 jobs. Tennessee added 7,700 positions, while Minnesota saved or created 11,800 jobs.

This week, more data trickled out, showing the complexity of the reporting.

Maryland announced Thursday that recovery funds fueled 4,464 direct positions. Officials also estimate that 1,451 indirect jobs were created or saved, while another 8,167 jobs were created or saved because of increased stimulus-related consumer spending. The state received awards of over $2 billion but spent only 11% of these funds, or $229,200.

“There are more than 14,000 Marylanders working today that otherwise would be facing unemployment,” said Gov. Martin O’Malley.

In Massachusetts, a total of 23,500 residents were working because of the recovery act, said Gov. Deval Patrick on Wednesday. The state reported to the federal government that stimulus accounted for 8,800 full-time direct jobs. The state received about $4 billion in recovery funds.

“This report shows that our work is paying off,” said Patrick. “Real jobs are being created or saved, real projects are underway and we’re making real investment in our long-term economy.”

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