By Richard Eckstrom
While we all want the stimulus to be successful in reducing the jobless rate, it’s a sad fact that millions of jobs have been lost since the $787 billion stimulus passed in February. Both our state and national unemployment rates have skyrocketed.
I have been open about my opposition to the stimulus: We’re spending money we don’t have, and we’re burdening future generations with mountains of debt, all under the pretense of economic recovery. Washington used the economic crisis as an excuse to permanently shift resources from the private sector to the public sector, dramatically increasing the size and scope of government at a time we should have been scaling back the cost of government.
Furthermore, I’ve been concerned that the stimulus would do little to create private sector jobs, because so much of the spending is on things that have little to do with stimulating the economy.
In October, the White House released its first report on stimulus jobs. According to the report, the stimulus “saved or created” more than 640,000 jobs nationwide, with more than 8,100 of those in South Carolina. There are many reasons to be skeptical of those numbers, however. They hardly square with the fact that the jobless rate has risen significantly since the stimulus spending began.
On Nov. 10, I was in Washington along with every other state’s stimulus oversight coordinator to meet with federal officials in a meeting arranged by the National Governor’s Association. As we discussed whether the stimulus had achieved its goal of creating new jobs, I used the occasion to voice my concerns about the way the White House is counting stimulus jobs, and to propose changes.
Either unwittingly or by design, the process being used to count jobs has resulted in artificially high jobs numbers. For one thing, rather than simply count the number of jobs created, the White House has coined the phrase “jobs saved or created,” which has resulted in an inflated job count. Recipients of stimulus funds have had to guess how many jobs have been saved, since no one knows for sure whether or how many jobs they might have shed had the stimulus not passed. Upon examination, many of those guesses have been grossly exaggerated.
There also have been media reports from across the country of stimulus funds being used to give employees raises and those raises being counted as “jobs saved.”At the conclusion of our meeting, the Governor’s Association convened an emergency task force to study the way jobs are counted, and I was appointed to serve on it. We’ve since met several times by conference call, and I’ve submitted a formal proposal to apply some common sense to the job count.
Among my reform proposals are:
- Simply count new jobs created rather than the nebulous “jobs saved or created,” since estimating “jobs saved” requires guesswork.
- Count “jobs created” using actual hours worked, which could be verified using auditable payroll records, rather than using complicated estimation formulas provided by Washington.
- Count of jobs that are known to be temporary, part-time jobs separately. Of the jobs the White House reported for South Carolina, more than 2,600 were in part-time, summer youth programs that ended with summer — certainly not the kind of jobs necessary to support families and sustain an economy. To count those jobs as if they were full-time, well-paying jobs distorts the numbers.