When President Obama signed the $787 billion stimulus bill last month, he promised it would create or save 3.5 million jobs. Federal and state officials are ramping up efforts to count those jobs, but it won’t be easy.
In Marlborough, N.H., population 2,085, residents meet in the school gym to vote on every detail of the town’s budget for the coming year. Headlining the debate on a recent evening was a plan to dig two wells for drinking water.
At one point, a man in a leather vest steps to the microphone and asks Selectman John Northcott what sources of money might pay for this.
“We have first applied for stimulus funds from the state,” Northcott says.
In the end, residents vote in favor of digging the wells. And a stimulus job might be born.
Complicated Job Calculations
Let’s assume Marlborough gets stimulus money for all or part of the project. The federal dollars will pay for some jobs, and the contractor will send a form to the state saying how many jobs were involved and how much those jobs paid.
It sounds simple. But it isn’t.
In an office at the state Capitol in Concord, Bud Fitch flips through a fat white binder. It’s his magna carta for the federal regulations that guide his work as director of New Hampshire’s Office of Economic Stimulus.
Page 174 tells him he must count the jobs, but he’s still waiting for the pages that will tell him how. In the past, government agencies have used different approaches.
“Some would count noses. ‘How many did you hire?’ — without a lot of constraint on whether it’s full-time, part-time, low-paying, high-paying,” says Fitch. “Others would have you count hours, without consideration of how many people work those hours.”
Creating A Yardstick
What’s needed is a yardstick so that a job counted under one program will be the same as a job counted under another. Part of the complication is that not all jobs are created equal. Some are seasonal; some allow a person to work on more than one project at once, and so on.
Picking one yardstick might seem relatively easy compared to the next challenge: How do you tell the difference between a job that was saved by the stimulus and a job that would have been there anyway?
Bruce Meyer, a professor at the Harris School of Public Policy at the University of Chicago, analyzes the labor supply. He says there are reasonable methods, but it’s almost impossible to know what a firm would have done if left on its own.
“They might have increased their employment even without the jobs subsidy,” he says, “because firms increase and decrease all the time.”
The agency in Washington that has to sort this out is the Office of Management and Budget. OMB’s Deputy Director, Rob Nabors, agrees that counting jobs, particularly saved jobs, is tricky.
He says agencies will use several methods. They will ask for documentation that layoffs would have occurred without the stimulus. And there will be some estimating. But Nabors says his office will be conservative.
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