Obama’s Stimulus Jobs: Here Today, Gone Tomorrow

10022011_stimulus_article.jpg

Oct 3 2011

The company handling the bulk of the cleanup at the massive Hanford nuclear waste site in Washington State celebrated when it received more than $1 billion of Obama stimulus funds in 2009. Dee Millikin, communications officer for the CH2M Hill industrial engineering company, recalls that the company held a “job fair” after receiving the money and hired almost 1,300 workers.

It signed up radiation technicians, demolition crews, heavy equipment operators, engineers, and business professionals, among others. And ancillary hiring by other companies that produce equipment used in the nuclear waste cleanup upped the total of new jobs to about 4,000, according to local union officials.
 
But once the money finally ran out last week, “those jobs ended up going away,” Milliken says. The company recently held another job fair – but that was to try to place their soon-to-be-laid-off employees. Whether those workers found another job is unknown, because no government organization tracks that information.

Those ephemeral positions were among the estimated 2 million jobs “created or saved” by President Obama’s $825 billion American Recovery and Reconstruction Act, enacted in 2009 in the depths of the worst U.S. recession of the modern era. While many Republican leaders and conservative analysts dispute the administration’s claims about the overall benefits of the stimulus package, Obama is using employment numbers to tout his new, $447 billion jobs program Obama has been barnstorming across the country to promote his new plan, The American Jobs Act, which is centered on rebuilding infrastructure and offering payroll tax breaks for workers and employers. The proposals are aimed at saving 280,000 teachers’ jobs, modernizing schools, and creating an infrastructure bank to spur new construction and jobs. The loftiest estimates of how many new jobs the legislation would create top off at 1 million.

“The question is whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy,” Obama said in announcing the program. He called on Congress to approve the bill before the next election, although so far there has been little indication of support on Capitol Hill.

But it’s far from certain whether those jobs will be new and permanent, or temporary and ephemeral – or how quickly they would appear. Obviously, many of the jobs would be short-term in nature, tied to the duration of specific projects. But if the last round of stimulus spending is a guide, it may take a while for new jobs to materialize. The government didn’t begin adding jobs until February 2010, nearly a year after the original stimulus act became law, according to the Bureau of Labor Statistics. Without question, the rate of job loss slowed dramatically beginning a few months after its passage. However, the program only added about 1 million jobs since the trough in February 2010.

In addition, researchers at the conservative Mercatus Institute at George Mason University surveyed more than 8,000 businesses that received stimulus funding and asked whether they had recruited workers from the rolls of the unemployed. Only 40 percent were unemployed before they were recruited for the new jobs. The other 60 percent included many who already had other jobs, part-time workers moved up to full-time positions, or recent retirees lured back to work.

“It was kind of surprising to us,” says Dan Rothschild, co-author of the study, who now works at the American Enterprise Institute. “A significant number of people hired under the act were poached from other firms rather than hired off the unemployment line.”

Moreover, Rothschild notes, those who were hired under the stimulus act tended to be well educated and professionals, with few unskilled workers in the group. “The median respondent to the survey was a woman with a bachelor’s degree,” he said. “They tended to be from educated and professional groups who were not impacted by high levels of employment.”

Edward Pound, a spokesman for recovery.gov, which was tasked with keeping track of the jobs created by the stimulus bill, says his agency did not break down the number of jobs into those who were unemployed prior to getting a stimulus job and those who were already working elsewhere. “The short answer is I don’t have an analysis on that,” Pound says. He parsed the recovery.gov jobs this way: “If I am paying you from April through June, I count that job in that quarter,” he says.

Sara Merriam, spokeswoman for the General Services Administration, which keeps track of government jobs tied to the stimulus money, says her responsibility is to “count how many people are employed.” Says Merriam: “So, where those people were before, I don’t know.”

One of the projects tracked by the GSA is the expansion and modernization of the Mariposa Land Port of Entry in Nogales, Ariz. Stimulus money helped the project hire 1,888 workers, Merriam says, including heavy equipment operators, grade checkers, underground utility installers, carpenters, iron workers. and landscapers.

 

Again, officials can’t say whether the workers they hired came from another job or were not working at the time they were hired. “Where these people were in the economy, I can’t tell you,” Merriam says.

According to the George Mason researchers, most of the landscapers were unemployed before they got their jobs, but the carpenters, ironworkers, and other skilled laborers probably already had other jobs. Co-author Garrett Jones says he initially assumed that companies would be under “informal or subtle pressure” to hire the unemployed. But in many cases, employers were looking for a specific skill set that could only be met by a limited universe of workers.

“You’d like to” hire the unemployed, Jones says, “but not to sacrifice quality. They didn’t want to create a bunch of government waste … or buildings that would fall apart or look shoddy.”

Economist Sheldon Richman, a senior fellow at the free-market oriented Future of Freedom Foundation think tank, says hiring off the unemployment line is particularly difficult for skilled construction jobs. Homebuilders, for example, one of the highest unemployed groups, are not interchangeable with bridge builders.

Some experts say the stimulus helped stanch the bloodletting in the declining construction industry but also say it resulted in job-churning, particularly if a worker was who went to the stimulus job came from a company where work was drying up. In that case, it would be a zero-sum game.

“If a company loses a crafts person to a stimulus job, if they still need the craftsperson, they are going to hire someone else,” says Brian Turmail, spokesman for the Association of General Contractors of America. “If not, the job is going to go away."