News Cycle

A look at the news, politics and journalism in today’s 24-hour media.

Fuzzy Math Over Employment Numbers and Saved Jobs

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Matt Apuzzo of The Associated Press made a point yesterday I’ve been stating for months about job creation and how the Obama administration is counting employment in the United States.

THE WHITE HOUSE SAID: The stimulus has created or saved 150,000 jobs.

THE FACTS: Since February, the nation has lost more than 1.3 million jobs, according to the Department of Labor. To make the case that the country created jobs over that same stretch, the White House has put forward a benchmark of jobs created “or saved.” The argument is that the job numbers would have been even worse had it not been for the stimulus, and the difference between those numbers is a net positive.

To visualize that disconnect, consider this: The administration has promised to create or save 600,000 more jobs in the next 100 days. Even if the nation loses another 5 million jobs during that span (a highly unlikely prospect) the White House could still claim success.

There are few hard numbers when it comes to tracking stimulus jobs. The Obama administration numbers are based on estimates by the White House Council of Economic Advisers, based largely on a formula Obama’s transition team put forward. It estimates the effect of tax breaks, government spending and social programs on job growth.

Spending money will put people to work. But spending has a cost. At some point, Washington will have to pay for this program, either by raising taxes or interest rates, and those policies typically hurt job growth. The Obama administration’s job data do not take into consideration this back-end cost, an omission some economists, particularly conservative economists, say is a flaw in the analysis.

The argument of “saved jobs” is arbitrary at best, and is only being used to claim a political victory by the White House. It’s impossible to quantify, and suddenly appeared in the president’s language only after the campaign. What we ought to be counting is the net jobs. Is the economy continuing to shrink? Or is it expanding?

Barack Obama promised 5 million green jobs alone during the campaign. How are we doing on that? PolitFact has an answer.

The American Recovery and Reinvestment Act, better known as the economic stimulus, includes nearly $17 billion for energy efficiency and renewable energy, including $5 billion to weatherize low-income homes; $3.1 billion for state energy programs; $2 billion for advanced battery manufacturing grants to encourage production of plug-in hybrid and electric cars; and $3.2 billion for energy efficiency and conservation block grants.

There’s also $6 billion in the stimulus to modernize the nation’s electricity grid; as well as hundreds of millions for research into renewable energy technologies like biomass and geothermal.

And it includes more than $6 billion in loan guarantees for renewable energy investors. Together with renewable tax credits, the White House estimates that will result in $100 billion in private investment in renewable energy projects.
… It’s too early to say how many green jobs all of this will translate into. Suffice to say a lot. Five million? Time will tell.

This is what his administration needs to quantify, not an obscure figure of saved jobs. It’s early in his term, and I’m sure the number of green jobs created is still low. But if he focused on reporting tangible results, it would be hard for the right to refute him.

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Written by newscycle

May 14, 2009 at 12:38 am

Posted in Unemployment

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