Government Spending

They're Not Necessarily Jobs, and They Weren't Necessarily Created or Saved, but We Gave These Guys Money, and They Gave Us Some Numbers

|


Instead of trumpeting the latest job numbers from recipents of money allocated by the American Recovery and Reinvestment Act, the White House at least had the decency to bury them in a Saturday-night blog post and a brief statement by Vice President Joe Biden. There are good reasons to be embarrassed. As The New York Times notes, the Obama administration has abandoned the attempt to count the number of jobs "created or saved" by the stimulus money—i.e., jobs that would not exist but for the special funds from Washington. Not surprisingly, figuring that out proved to be a headache for grant recipients, who were essentially asked to compare the current situation with a parallel universe in which Congress never passed the Recovery Act. Instead they are now officially asked to do what many (or most) of them probably were doing anyway: count the jobs "funded" by stimulus money:

In the final quarter of 2009, the administration no longer asked recipients whether all of those jobs were actually created or saved by the stimulus money or whether some of those jobs might have existed without the stimulus money.

Instead, it now simply counts all existing jobs paid for with stimulus money as saved jobs, whether or not they would have been lost without the money.

So school districts (the main source of the jobs that were formerly described as "created or saved") can simply divide their federal money by the quarterly compensation for teachers and report the result as jobs "funded" by the Recovery Act, even if no teachers would have been laid off in the absence of the money. If a public housing authority uses stimulus money to replace windows in one of its apartment complexes, and the project involves three guys from Ace Windows and Doors working full-time for a month, that counts as a job for that quarter, even if all of the guys would have been employed without this particular contract—and even if the housing authority would have replaced the windows without the federal grant. It also sounds like it is now officially OK to count raises for existing employees as jobs, as a number of recipents erroneously did last time around.

It's worth emphasizing that each of these "jobs" is actually a "full-time equivalent" for the quarter, meaning that it amounts to no more than a three-month gig for one individual and may just be an amalgamation of hours worked by various people. If a federally funded project is said to involve an extra hour of work for each of 520 people, that counts as a stimulus job. And now it counts as a stimulus job even if all of those people would have been fully employed and earned the same amount of money without the federal grant.

The White House says "the method for counting was changed slightly this quarter to make it easier for recipients" and therefore cautions against comparing the new numbers to earlier ones. But the change is more than slight. Instead of the increasingly reliable data we were promised as recipients became more adept at reporting and the administration strove to weed out errors such as phantom congressional districts and improbably stimulating work boots, we will get data that by design cannot be used to measure jobs produced by the stimulus, which was the whole point of the exercise. Biden nevertheless claims:

The recipients reporting on this $54 billion portion of the Recovery Act…tell us they funded about 600,000 workers last quarter with Recovery dollars. These reports, which provide a snapshot of the impact of a small portion of funds, are yet another indication that the Recovery Act is on track to create or save 3.5 million jobs by the end of 2010.

Translation: This meaningless, unverifiable number can be used to validate another meaningless, unverifiable number.

Matt Welch and Nick Gillespie mentioned the shift in job counting methodology in a recent piece offering unsolicited advice to President Obama. I discussed "the fuzzy math and goofy logic of government-goosed employment" after the last set of job numbers was released.