Stimulus creates thousands of jobs! (no, not really)

[aerius]

AP link on google

SPIN METER: 'Help Wanted' counting stimulus jobs
By RYAN KOST (AP) – 1 day ago

PORTLAND, Ore. — How much are politicians straining to convince people that the government is stimulating the economy? In Oregon, where lawmakers are spending $176 million to supplement the federal stimulus, Democrats are taking credit for a remarkable feat: creating 3,236 new jobs in the program's first three months.

But those jobs lasted on average only 35 hours, or about one work week. After that, those workers were effectively back unemployed, according to an Associated Press analysis of state spending and hiring data. By the state's accounting, a job is a job, whether it lasts three hours, three days, three months, or a lifetime.

"Sometimes some work for an individual is better than no work," said Oregon's Senate president, Peter Courtney.

With the economy in tatters and unemployment rising, Oregon's inventive math underscores the urgency for politicians across the country to show that spending programs designed to stimulate the economy are working — even if that means stretching the facts.

At the federal level, President Barack Obama has said the federal stimulus has created 150,000 jobs, a number based on a misused formula and which is so murky it can't be verified.

At least 10 other states have launched their own miniature stimulus plans and nine others have proposed one, according to the National Conference of State Legislatures. Many of them, like Oregon, have promised job creation as a result of the public spending.

Ohio, for instance, passed a nearly $1.6 billion stimulus package even before Congress was looking at a federal program. When Gov. Ted Strickland first pitched the idea last year, he estimated the program could create some 80,000 jobs.

In North Carolina, a panel authorized hundreds of millions of dollars in new debt to speed up $740 million in government building projects. According to one estimate, the move could hurry the creation of 25,000 jobs.

As the bills for these programs mount, so will the pressure to show results. But, as Oregon illustrates, job estimates can very wildly.

"At best you can say it's ambiguous, at worst you can say it's intentional deception," said economist Bruce Blonigen of the University of Oregon. "You have to normalize it into a benchmark that everybody can understand."

Oregon's accounting practices would not be allowed as part of the $787 billion federal stimulus. While the White House has made the unverifiable promise that 3.5 million jobs will be saved or created by the end of next year, when accountants actually begin taking head counts this fall, there are rules intended to guard against exactly what Oregon is doing.

The White House requires states to report numbers in terms of full-time, yearlong jobs. That means a part-time mechanic counts as half a job. A full-time construction worker who has a three-month paving contract counts as one-fourth of a job.

Using that method, the AP's analysis of figures in Oregon shows the program so far has created the equivalent of 215 full-time jobs that will last three months. Oregon's House speaker, Dave Hunt, called that measurement unfair, though nearly every other state that has passed a stimulus package already uses or plans to use it.

"This stimulus plan was intentionally designed for short-term projects to pump needed jobs and income into families, businesses and communities struggling to get by," Hunt said in a statement. "No one ever said these would be full-time jobs for months at a time."

Still, critics say counting jobs, without any consideration of their duration, isn't good enough.

"You can't let them say, 'Well, we never said it was going to be full-time,'" said Steve Buckstein, a policy analyst for the Cascade Policy Institute, a free-market think tank. For the price of Oregon's $176 million, lawmakers could have provided all 3 million state residents with a one-hour job paying about $60, he said.

"By their definition, that's 3 million jobs," Buckstein said. "Is anybody gonna buy that?"

Oregon's 12.4 percent unemployment rate surpasses the national average of 9.4 percent. To supplement the federal stimulus, the state sold bonds to pay for everything from replacing light bulbs to installing carpet and finishing construction of a school in the farming community of Tillamook.

The "Go Oregon" program is still new. According to its latest progress report, 8 percent of the money has been spent and hundreds of projects have yet to be completed. More paychecks are bound to be written as construction continues.

If Oregon's dollars-to-jobs ratio remains steady, the program will create about 688 full-time, yearlong jobs. So far, it's generated only enough hours to employ 54 people full-time for a year.

Still, contractor Deborah Matthews of Pacificmark Construction, based in Milwaukie, Ore., is happy for any work. Her company picked up three contracts for painting, installing a water filter system and refurbishing a maintenance building. Prior to those contracts, which lasted about six weeks, she had laid off nearly all her construction workers. She brought back three full-time and hired a part-time worker.

"It was a little bit," she said, "to just keep us going."

So if my math is correct, they managed to blow about $55k on each of the jobs they created, a whole year's worth of pay for a week of work on average. There's gotta be some quality embezzling going on since you could probably get better for your money by paying people to plant trees and dig ditches.

[Ziggy Stardust]

Is this situation unique to Oregon, or is it more widely applicable? There are plenty of websites tracking the actual money, but I can't find very many sources that talk about the number of jobs created.

[Broomstick]

The boss and I were talking about this today as we were perched on ladders two stories off the ground, priming and painting (which looks to be at least a solid week of work, between repairs and repainting of the house in question - yay!). We have GOT to get people back to actual work. I heard a report on the TV news today that unemployment claims are down - but that doesn't mean those people are back to work. All too many of them have simply exhausted their benefits. They're still unemployed, and now have no income whatsoever.

The boss - a staunch Republican, but not an idiot - was musing on the WPA of the FDR administration. A much criticized program, yes, but I think much of the criticism comes from a misunderstanding of the purpose, which was to enable people to bring in enough money to keep a roof overhead and food on the table. It wasn't intended to generate new industries, eternal monuments, or the like, it was to put people to work. From what my parents have told me the WPA work frequently wasn't all that wonderful, and certainly work with a private company almost always paid better and was more secure, but the chief benefit was that it enabled people to maintain at least a base level of existence. Anything of long-lasting benefit we also got out of the program was gravy.

Of course, enabling people to continue to buy groceries, gas for their vehicle, toilet paper, and the like helps keep other business in business.

The question is, what would be appropriate or cost-effective jobs for the modern era for a new WPA?

[Surlethe]

In order for a new WPA to work, you'd need a set of jobs that could be done by a person with a lowest-common-denominator skillset. It wouldn't have to be full-time, but it would have to be part-time and pay enough money to keep a roof over the head and food on the table. Ideally, the jobs would be public-infrastructure work - e.g., widening roads, laying rail, pouring concrete foundations for nuclear power plants, etc. - that would facilitate future growth, but that doesn't necessarily need to be the case. They couldn't be something as unproductive as paying people to dig holes twenty hours a week, though. Perhaps creating or nationalizing some production lines - perhaps military - could provide useful work: be able to have people do production-line jobs that require little to no prior training.

How much training does it take to fill potholes or help resurface a road? How about widening it or adding sidewalks? Can modern rail be laid by unskilled workers? Concrete be poured? Pipes laid?

[Einhander Sn0m4n]

Of course, enabling people to continue to buy groceries, gas for their vehicle, toilet paper, and the likethrowing money at poor people helps keep other business in business

FTFY. Even Dave comes around when I phrase it like that. It helps if I tell him to stop looking at rich people's marginal tax rate and pay attention to our own tax brackets.

[Broomstick]

In order for a new WPA to work, you'd need a set of jobs that could be done by a person with a lowest-common-denominator skillset.

Untrue.

We have millions of literate, experienced workers currently unemployed. MY skillset certainly isn't "lowest-common-denominator", and I have to assume I'm fairly typical of many who are unemployed.

Yes, a lot of the jobs would be low-skill, but you don't have to have them all that nature. That was certainly not the case in the 1930's, when education through college was much less common than now.

It wouldn't have to be full-time, but it would have to be part-time and pay enough money to keep a roof over the head and food on the table.

Assuming the jobs will pay minimum wage - and certainly the lowest tier will - part-time is NOT sufficient to live on. That doesn't mean part time work would be passed up, and certainly room mates and living with family are options, but no, part time isn't enough.

Ideally, the jobs would be public-infrastructure work - e.g., widening roads, laying rail, pouring concrete foundations for nuclear power plants, etc. - that would facilitate future growth, but that doesn't necessarily need to be the case. They couldn't be something as unproductive as paying people to dig holes twenty hours a week, though. Perhaps creating or nationalizing some production lines - perhaps military - could provide useful work: be able to have people do production-line jobs that require little to no prior training.

WHAT production lines? We've shipped nearly all our "production line" work to China! That's a major part of the problem!

How much training does it take to fill potholes or help resurface a road? How about widening it or adding sidewalks?

More than you would expect - much of that these days requires use of heavy machinery, which is not something you want the untrained to be doing. (So, train them, right?) It also requires a level of physical health that will not be found in a lot of the potential work pool, particularly not those nearing middle age which is a demographic particularly hard hit.

Can modern rail be laid by unskilled workers?

Unlikely - again, it requires heavy machinery, much of it specialized. There is a role for the traditional "gandy dancer", but many of the current unemployed just do not have the physical prowess to swing a sledge - I certainly don't, and I'm in pretty good shape for my mid-40's. Men who have worked at manual labor all their lives can do that sort of work in their 40's and 50's but not your typical office worker drone, and not women.

Concrete be poured? Pipes laid?

Again - specialized machinery, heavy machinery, manual labor - yes, yes, people can be trained but all forms of construction is much more mechanized these days than in the past. We no longer dig ditches with shovels, we use backhoes.

We need to think differently than in the past. The concept of the WPA is needed, but how we go about it needs to be different because we are living in 2009, not 1932.

One thing that comes to mind is the scanning of paper documents into electronic form - that is not entirely automated and I presume there is a lot of it to be done. There should be other things out there as well.