ARRA Construction Jobs Pegged at 133,000
Construction industry officials keeping close watch on the American Recovery and Reinvestment Act’s progress now have new data to study. A White House Council of Economic Advisors report, released on Sept. 10, finds the stimulus law so far has produced or saved about one million jobs, including 133,000 in construction. The figures are estimates, not an actual count of jobs reported by state agencies or companies that have received ARRA aid.
Robert A. Murray, McGraw-Hill Construction’s vice president for economic affairs, says CEA’s report, its first quarterly ARRA review, “does indicate the stimulus will increase the ‘pro-cyclical’ benefits to come from construction employment, but to this point the extent of that lift is just an estimate. As a result, determining the benefits to construction employment from ARRA, at least in a hard data sense, will have to wait for subsequent reports.”
Ken Simonson, Associated General Contractors’ chief economist, calls the study “a serious intellectual exercise.” But he views its construction-jobs estimates as “implausibly high” in light of the 65,000 construction jobs that the Bureau of Labor Statistics said were lost in August, as well as CEA’s indication that “relatively little [ARRA money] has been spent so far on infrastructure.”
Anirban Basu, Associated Builders and Contractors’ chief economist, says given the relatively low amount of ARRA funds actually spent so far, CEA’s numbers “seem reasonably credible.” But, he adds, “It is possible...that the impacts associated with construction jobs are presently overstated,” because other types of ARRA aid can be distributed much faster than its construction funds.
|SECTOR||JOBS ADDED/PRESERVED||SHARE OF TOTAL|
|Professional and Business Services||256,000||25%|
|Trade, Transportation, Utilities||232,000||22%|
|Leisure and Hospitality||83,000||8%|
|*Mining/logging, finance, education/health, government, other services. Note: Data as of August 2009|
|SOURCES: BUREAU OF LABOR STATISTICS; COUNCIL OF ECONOMIC ADVISORS CALCULATIONS|
By comparison, the House Transportation and Infrastructure Committee’s latest ARRA jobs count, based on state reports through July and federal agency reports through mid-August, shows more than 76,000 direct jobs preserved or created. Most of the jobs presumably were in construction, because the panel’s tally only covers programs under its jurisdiction, such as highways, transit and wastewater treatment.
Rep. Tom Price (Ga.), Republican Study Committee chairman, criticized CEA’s report. “The fuzzy math used to produce these claims of jobs ‘saved or created’ bears no resemblance to anything our children learn in school,” he says.
“We find that the trajectory of the economy has changed: job loss and output declines have moderated substantially,” CEA stated. It adds that its work “suggests ARRA has had a substantial positive impact on the growth of real gross domestic product and on employment in the second and third quarters of 2009.As of August, ARRA resulted in about 1.04 million jobs.
CEA also said that of ARRA’s $787-billion total, $151.4 billion had been distributed as tax cuts or federal outlays by the end of August. But only $16.5 billion of the $151.4 billion was in the “government investment” category, which includes most ARRA construction funds. Tax breaks, fiscal aid to states and assistance to individuals make up the other $135 billion.
That flow was part of the plan, White House officials say. CEA noted that obligations for areas like infrastructure “are substantial” and will turn into future outlays. But it also says, “The economy is obviously still far from healthy.”