Where's the Truth? Stimulus Jobs Reporting More Slippery than Greased Eel

Updated November 22, 2009

Stimulus spending watchdogs across the country were quick to respond, immediately pointing out the fallacy in the reported figures. According to the Associated Press, the Obama administration has overstated job creation related to stimulus spending by thousands.

For example, the Associated Press reports that of the 30,383 jobs attributed to federal contracts (300 in North Carolina), “some counts were more than 10 times as high as the actual number of jobs; some jobs credited to the stimulus program were counted two and sometimes more than four times; and other jobs were credited to stimulus spending when none was produced.”

Among the findings of the Associated Press investigation:

• A company working with the Federal Communications Commission reported that stimulus money paid for 4,231 jobs, when only about 1,000 were produced.
• A Georgia community college reported creating 280 jobs with recovery money, but actually created none.
• A Florida child care center reported that its stimulus grant saved 129 jobs, but the money was actually used on raises for existing employees.

A few days later, the Obama administration released a statement claiming that “virtually all” of the misinformation that they knew about had been corrected – though the bogus numbers on the government recovery website had not been changed. According to Ed DeSeve, the senior adviser to President Barack Obama on implementation of the stimulus plan, they are working to resolve other errors found by the public.

Both the administration and stimulus grant recipients have an enormous incentive to inflate job creation figures. For the administration, it shores up public perception of the wisdom of the stimulus spending, even while the plan piles up debt for future generations. For grant recipients, it keeps those government subsidies flowing.

But what about those instances in which grant recipients appear to have understated jobs attributable to stimulus spending? Good Jobs First, a Washington, DC-based accountability organization that studied October’s stimulus reporting in depth, found that of the 30,383 federal contract or grants reported, 2,464 recipients receiving $1.1 billion in stimulus payments reported their projects from 50 to 100-percent completed, while “accomplish[ing] the amazing feat of not creating or retaining a single job.”

Here in North Carolina, the job claims don’t square with the facts either. Rather than specifying the number of jobs associated with each contract recipient, in most cases, the Perdue administration simply relies on a jobs projection formula recommended by the federal government. Press releases for highway contracts coming from the governor’s office state that  “According to the Federal Highway Administration, every $1 million spent on transportation creates 30 jobs.”

By their count, the thirteen highway contracts worth $48 million awarded with stimulus funds to S. T. Wooten prior to October’s reporting and reflected on the Capitol Monitor’s projects chart should have created 1568 jobs. But the company hasn’t hired anywhere near that many people. Responding to a request by the News & Observer, Ricky Vick, executive vice president of the Wilson-based S. T. Wooten Corp. stated, “We've hired back maybe two or three dozen people who had been laid off, with maybe a handful of new hires."

WTVD investigative reporter Jon Camp checked with other employers, and found much the same story:

• In Henderson, money has been allotted for three new police officers, but it can't be spent until the department is at full staff, and the police chief says that's not likely to happen anytime soon.
• Knightdale's Gaines Construction Co. won a stimulus contract to repave the parking lot at the Durham VA Hospital – but while the state allocated five new jobs for the award, the company says it may hire just one additional worker.
• A similar contract for an Asheville VA Hospital was awarded to a Florida contractor, for which the state projects eight jobs “created” – but the company plans to hire only two to three workers for only two months.

Then what can we make of the latest claim that over $4.2 billion in stimulus awards has created or saved exactly 28,073 jobs in North Carolina?  We can say it’s costing $150,000 per job, if you want to believe it at all.

Confusing matters even further is the failure of the administration, at both the state and federal levels, to separate stimulus spending that goes toward creating more government hiring & wage increases and that which goes to the private sector – as well as temporary versus permanent hiring.

As unemployment creeps ever higher – up by 2857 last month in North Carolina according to Employment Security Commission – the truth about the stimulus is inescapable. It’s a bust and the nation’s primary job creators – small business owners – know it. “Government job creation is an oxymoron,” said Bill Dunkelberg, chief economist at the National Federation of Independent Business. "It is only by depriving the private sector of funds that government can hire or subsidize hiring."

Still, DeSeve remains upbeat – telling the Wall Street Journal that although they may be wrong, the approximate jobs totals still point to enormous progress. While the administration knows that the figures are not "100 percent accurate," DeSeve said, the stimulus plan was supposed "to create jobs, not count them."

The bottom line is that stimulus reporting is lax and oversight woefully inadequate. To paraphrase a famous line attributed to Jack Nicholson, apparently the administration “can’t handle the truth.” 

As taxpayers, we’re having a hard time handling it too.