Recovery jobs

Recovery.gov has a page called "Track the Money" . You can check funds awarded, funds received, and jobs created by state, and it all looks very efficient and impressive. But how accurate is the information?

It's the best information that Recovery.gov has available.

A well-written and relevant article in the October, 2009 Governing magazine, entitled "Where Have All the Dollars Gone," starts with the premise that "Some parts of the stimulus are easy to track. Others are impossible."

Of the stimulus money that was put into state budgets in 2009, some 63% went into Medicaid. While this may have the economic recovery effect that is expected, it certainly is not the job-creation vehicle that many people envisioned. And as far as job creation goes, under ARRA, a job retained is now equal to a job created. Originally, jobs retained and jobs created were to be reported separately; now they are lumped together. Anyone familiar with the old shell game? What sort of accurate data can be expected when entities - state, local, and private - report the jobs they would have lost if not for the ARRA money added to their budgets?

Also consider this: What happens when the stimulus money is gone? If my state reports that we retained 200 teachers due to the stimulus money, what happens if the economy does not recover by the time the money runs out? What if those teachers have to be laid off in 2011, because the federal funds to pay them are gone? We all felt good about retaining 200 jobs - and reported 200 jobs retained - but projections for the 2011 state budgets do not show skyrocketing tax revenues.

Reporting jobs has at least one other fuzzy spot: contractors. ARRA requires prime recipients to report jobs created or retained, not just by themselves, but also by their contractors. Rather than forcing receipients to become auditors of their contractors, which would never work, a prime recipient is required to ask contractors for the information, which the contrators may estimate. Let's see, the accuracy of a second-hand estimate is comparable to . . . a story my 13-year old tells me he heard at school?

Accuracy of the funding information will be addressed later, but the jobs number is, in my opinion, little more than a shot in the dark. It may be accurate enough to provide some insight into a general direction, but maybe not. According to the Governing article referenced earlier, unemployment has actually increased since the passage of ARRA. So the question is really what might have happened to employment if not for ARRA. That one I'll definitely leave to the economists to debate.

The bottom line is this: While ARRA may be a wonderful thing, no one should take any report of jobs created or retained because of the stimulus package to be anything more than a guess.