$72,408 Per Stimulus Job? White House Says No

Oct 15, 2009 4:51pm

Jake Tapper and Lisa Chinn report:

Five hundred billion dollars in stimulus monies for spending were appropriated last February. Of that, $143 billion in stimulus funds have been spent so far.

Just $16 billion of that was directly awarded by the Federal government; most of the money went to states and localities to spend.

Of the $16 billion awarded, $2.2 billion has actually gone to these contractors to create jobs.

Today the White House released data indicating that 30,383 jobs were directly created by these stimulus dollars.

"It is too soon to draw any global conclusions from this partial and preliminary data,” Recovery Act Chief Economist Jared Bernstein said in a statement, “but the early indications are quite positive.  The direct count by Recovery Act recipients of jobs created or saved from this small percentage of the Recovery Act exceeds our projections. “

Basic math would indicate that $2.2 billion spent to create 30,383 jobs would indicate a cost per job of $72,408.

But the White House rejects this.

Recovery Act spokeswoman Elizabeth Oxhorn says that “this contract money doesn’t just go toward labor/wages for workers – it also funds things like purchase of equipment and supplies which also creates jobs.”

Moreover, she points out that “the job numbers reported by recipients and posted today are only direct jobs – or those workers whose paychecks are funded directly by the Recovery Act.  That hits the labor/wages part of the equation, but there are also jobs created and saved from the purchasing of equipment and supplies (known as indirect jobs) and the additional purchasing power workers on these projects have that they wouldn’t without the job (known as induced jobs) that is not reflected in these numbers – which, of course, affects the bottom line of doing averages like this one.  When you account for all of the non-direct jobs, much different scenario.”

(The 30,383 jobs figure will be updated; the White House “is temporarily withholding the data from two of the 5,232 federal contract recipient reports until the two recipients can correct their obviously incorrect submissions,” a statement on the Recovery.gov website says.)

Bernstein says that “All signs — from private estimates to this fragmentary data — point to the conclusion that the Recovery Act did indeed create or save about 1 million jobs in its first seven months, a much needed lift in a very difficult period for our economy.  We look forward to the much larger, comprehensive report due on October 30th.”

On October 30, the Federal government will release information provided by the states (and handed in October 10) of how many auditable jobs they created that were directly attributed to the stimulus funds.

This number will be significantly lower than the one million jobs the White House says has been created, because their computations factored in the “indirect” and “induced” jobs created as well. 

As White House press secretary Robert Gibbs said earlier this week: the state “reports themselves do not count a multiplier effect for jobs…. When we obviously know that in order to pave a road, it's not just the person paving the road. Somebody has got to make the pavement. Somebody makes those orange cones, so we don't crash into the people paving the road. So you know, we feel comfortable with our estimate.”

-Jake Tapper and Lisa Chinn

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