Do You Owe Your Job To the Stimulus?
The stimulus is putting construction workers on the jobsite in significant numbers, according to a White House study.
The flow of federal economic-stimulus funds has produced or saved about 1 million jobs, including an estimated 133,000 in the construction industry, the White House Council of Economic Advisers says in a report on the impact of the American Recovery and Reinvestment Act. The figures are estimates, CEA notes, and are not an actual count of jobs reported by state agencies or companies that have received the stimulus funds.
The 43-page report, released Sept. 10, is CEA's first quarterly look at ARRA, which was signed into law in February.
As with health care reform, Republicans are calling it a deception.
Rep. Tom Price (Ga.), chairman of the Republican Study Committee, said, "The fuzzy math used to produce these claims of jobs 'saved or created' bears no resemblance to anything our children learn in school."
CEA estimates that as of August, ARRA has resulted in 1.04 million total jobs, including 133,000 in construction, compared with what the baseline level would have been if the measure had not been enacted. CEA says that its calculations show that 85,000 of the construction jobs can be traced to the industry's high degree of cyclicality. It adds that the other 48,000 construction jobs represent that sector's share of the "rising tide" that ARRA has produced for the economy as a whole.
The report also says that the measure provided additional real Gross Domestic Product growth of 2.3 percentage points in the second quarter of this year. CEA says it is "likely" to produce a 2.7 percentage-point GDP gain in the third quarter.
"We find that the trajectory of the economy has changed: job loss and output declines have moderated substantially," CEA says.
The report also provides an update on ARRA's spending. It finds that of ARRA's total $787 billion, $151.4 billion had been distributed as tax cuts or spent in the form of federal outlays as of the end of August. But only $16.5 billion of those outlays have come in the "government investment" category, the sector that includes most of the stimulus measure's construction funding.
CEA observes that most of the stimulus aid that has gone out so far has come in tax cuts, direct fiscal relief to states and other payments such as unemployment assistance. "This concentration is exactly what was intended and expected when the act was passed," CEA says.
In contrast, the direct federal investment money was planned to flow out over a more extended period of time, CEA says, adding, "Consistent with this, obligations in the area of infrastructure and other investments, indicating future outlays, are substantial."
CEA does acknowledge, "The economy is obviously still far from healthy." It notes that millions remain unemployed and that the 276,000 jobs lost in July and 216,000 lost in August are "obviously unacceptable."