Stimulus job count depends on spin

Published: July 28, 2009
Tags: Construction, economy, job creation, Obama, Oregon, stimulus

Kelly Plandel works on the renovation of a Portland State University classroom in Portland, Ore., July 17. University renovations are parts of Oregon's $176 million stimulus package and represent Oregon's biggest use of stimulus money.AP Photo by Don Ryan

Ryan Kost
AP Writer

Portland, OR — Politicians are straining to convince people the government is stimulating the economy.

In Oregon, where lawmakers are spending $176 million to supplement the federal stimulus, Democrats are taking credit for a remarkable feat: creating 3,236 new jobs in the program’s first three months.

But those jobs lasted on average only 35 hours, or about one workweek. After that, those workers were effectively back unemployed, according to an Associated Press analysis of state spending and hiring data. By the state’s accounting, a job is a job, whether it lasts three hours, three days, three months or a lifetime.

“Sometimes, some work for an individual is better than no work,” said Peter Courtney, Oregon’s Senate president.

With the economy in tatters and unemployment rising, Oregon’s inventive math underscores the urgency for politicians across the country to show, even if it means stretching the facts, that spending programs designed to stimulate the economy are working.

At the federal level, President Barack Obama has said the federal stimulus created 150,000 jobs, a number that is so murky it can’t be verified.

At least 10 states have launched their own miniature stimulus plans, and nine others have proposed one, according to the National Conference of State Legislatures. Many of them, such as Oregon, have promised job creation as a result of the public spending.

Ohio, for instance, passed a nearly $1.6 billion stimulus package even before Congress was considering a federal program. When Ohio Gov. Ted Strickland first pitched the idea last year, he estimated the program could create about 80,000 jobs.

In North Carolina, a panel authorized hundreds of millions of dollars in new debt to speed up $740 million in government building projects. According to one estimate, the move could hurry the creation of 25,000 jobs.

As the bills for these programs mount, so will the pressure to show results. But, as Oregon illustrates, job estimates can vary wildly.

“At best, you can say it’s ambiguous; at worst you can say it’s intentional deception,” said economist Bruce Blonigen of the University of Oregon. “You have to normalize it into a benchmark that everybody can understand.”

Oregon’s accounting practices would not be allowed as part of the $787 billion federal stimulus. The White House has made the unverifiable promise that 3.5 million jobs will be saved or created by the end of next year. But when accountants actually begin taking head counts this fall, there are rules designed to guard against exactly what Oregon is doing.

The White House requires states to report numbers in terms of full-time, yearlong jobs. That means a part-time mechanic counts as half a job. A full-time construction worker who has a three-month paving contract counts as one-fourth of a job.

Using that method, the AP’s analysis of figures in Oregon shows the program so far has created the equivalent of 215 full-time jobs that will last three months. Oregon’s House speaker, Dave Hunt, called that measurement unfair, though nearly every other state that has passed a stimulus package already uses or plans to use the same measurement.

“This stimulus plan was intentionally designed for short-term projects to pump needed jobs and income into families, businesses and communities struggling to get by,” according to a statement attributed to Hunt.

“No one ever said these would be full-time jobs for months at a time.”

Still, critics say counting jobs without any consideration of their duration isn’t good enough.

“You can’t let them say, ‘Well, we never said it was going to be full-time,’” said Steve Buckstein, a policy analyst for the Cascade Policy Institute, a free-market think tank. For the price of Oregon’s $176 million, lawmakers could have provided all 3 million state residents with a one-hour job paying about $60, he said.

“By their definition, that’s 3 million jobs,” Buckstein said. “Is anybody gonna buy that?”

Oregon’s 12.4 percent unemployment rate surpasses the national average of 9.4 percent. To supplement the federal stimulus, the state sold bonds to pay for everything from replacing light bulbs to installing carpet and finishing construction of a school in the farming community of Tillamook.

The “Go Oregon” program is still new. According to its latest progress report, 8 percent of the money has been spent, and hundreds of projects have yet to be completed. More paychecks are bound to be written as construction continues.

If Oregon’s dollars-to-jobs ratio remains steady, the program will create about 688 full-time, yearlong jobs.

So far, it’s generated only enough hours to employ 54 people full-time for a year.

Still, contractor Deborah Matthews of Pacificmark Construction, based in Milwaukie, Ore., said she is happy for any work. Her company picked up three contracts for painting, installing a water filter system and refurbishing a maintenance building.

Prior to those contracts, which lasted about six weeks, she had laid off nearly all of her construction workers. She brought back three full-time and hired a part-time worker.

“It was a little bit,” she said, “to just keep us going.”

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