Thursday, November 05, 2009

How jobs "created and saved" by the stimulus get counted. 

By government agencies....
Salary raises counted as saved jobs; 2 out of 3 Head Start jobs overcounted

An Associated Press review of the latest stimulus reports ... found that more than two-thirds of 14,506 jobs credited to the recovery act under spending by just one federal office were overstated because they counted pay increases for existing workers as jobs saved.

The inflated job count is at least partly the product of the administration instructing local community agencies that received money to count the raises as jobs saved...

But officials defended the practice of counting raises as saved jobs. "If I give you a raise, it is going to save a portion of your job," HHS spokesman Luis Rosero said.

Most of the inflated figures were like those cited ... by Southwest Georgia Community Action in Moultrie, Ga. The agency, like hundreds of others collecting Head Start money, claimed all its existing employees' jobs were saved because they received a pay raise with the stimulus cash...

The agency employs 508 people but claimed 935 jobs were saved.

... director Myrtis Mulkey-Ndawula said she followed the guidelines the Obama administration provided. She said she multiplied the 508 employees by 1.84 — the percentage pay raise they received — and came up with 935 jobs saved. [AP]
(Need I point out that Head Start is an educational agency?)

In academia...
... Many universities, for example, are including tenured academics in their “jobs created and saved” numbers even though their jobs were already guaranteed for life.

Ms Smith, who is associate vice-chancellor for research administration at the University of California, Los Angeles and leads a team handling its stimulus awards, received guidance from the UC Office of the President saying she should include everyone paid by stimulus dollars, including tenured faculty members. did avoid a very sticky problem: how can you know for sure whether a job would have disappeared were it not for stimulus money? [Financial Times]
By small business...
How did Kentucky shoe store owner Buddy Moore save nine jobs with just $889.60 in federal stimulus money? ... Moore’s slice of the stimulus came in an $889.60 order from the Army Corps of Engineers for nine pairs of work boots for a stimulus project.

... because he provided safety shoes for work funded by the stimulus package, he said he got a call from the Corps telling him he had to fill out a report for detailing how he’d used the $889.60, and how many jobs it had helped him to create or save. He later got another call, asking him if he’d finished the report.

"The paperwork was unreal," said Moore, who added that he tried to figure out how to file the forms online, then gave up and asked his daughter to help.

Paula Moore-Kirby, 42 years old ...couldn’t work out how to answer the question about how many jobs her father had created or saved. She couldn’t leave it blank, either, she said. After several calls to a helpline for recipients she came away with the impression that she would hear back if there was a problem with her response, and have a chance to correct it. So with 15 minutes to go before the reporting deadline, she sent in her answer: nine jobs, because her father helped nine members of the Corps to work.

“You could fill out the form in 10 minutes, but we were trying to fill out the form correctly,” she said, guessing that she spent up to eight hours on it in total.

Today, three days after the reports were made public, local television stations and national newspapers including The Wall Street Journal started telephoning Moore, because his nine jobs for $889.60 in stimulus money makes him look like one of the most effective spenders in the country.

Kirby-Moore says she then got a call from her dad, asking her, "Paula, I thought you knew what you were doing… What did you put in that form?”

“I thought it was the right answer," she said....

A spokeswoman for the Army Corps of Engineers in Louisville said that the stimulus reporting requirements were cumbersome, but important, and that the Corps had contracts ranging up to millions of dollars in the region. “It’s painstaking; it’s very, very detailed record keeping,” said Carol Labashosky... [WSJ]
One thing about all these cases, while there's obviously a huge margin of error, all seems carefully arranged for it to be entirely on the "up" side.

If you have that "sticky problem: how can you know for sure whether a job would have disappeared were it not for stimulus money?" -- just count the job as saved and don't worry about it! Simple.

Here in New York City, the transit workers union just got an 11% pay raise that the arbitrators (one of whom was the president of the union) said could be financed with $350 million of stimulus funds. (As noted previously.)

Is that another 33,000 jobs saved? No -- by the math of Southwest Georgia Community Action, it's 363,000 jobs saved!

More significantly, by the official policy of the Obama Adminstration, it looks like 3,630 jobs saved.

"If I give you a raise, it is going to save a portion of your job." ??

(As an afterthought, this is making me feel great about all the national accounts. What kind of survey do they use for GDP?)