Stimulus Spending Preserves Jobs Rather Than Creating Them

(MoneyWatch)  The $787 billion U.S. stimulus package is proving to be more of a job-preservation than a job-creation measure -- at least in the early going. Initial tallies of the aid package's employment impact are coming in and the main beneficiary so far: public-school teachers spared layoff notices.

Preliminary data obtained by the Associated Press, for instance, showed two-thirds of California's spending went to saving or creating 62,000 jobs in public schools and universities, while in Michigan, public education accounted for 75% of the 19,500 saved or created jobs.

State officials faced a Saturday deadline to report how many and what types of jobs their state created and saved with their share of the billions in aid. The accounting had to be quite specific and was: Utah reported hiring one person at a food bank, North Dakota hired two forensic scientists and Texas hired 11 people to repave a road in Caldwell, according to AP.

In terms of new hiring, as expected, workers in the construction trades appear to be the chief beneficiaries so far. States ramped up planned public-works projects such as highway and bridge building to provide jobs for construction workers struggling since the housing market collapsed.

States are required to file quarterly spending reports with the Recovery Accountability and Transparency Board, set up by Congress to monitor stimulus-package spending. The first nationwide accounting is to be released later this month

The state reports are expected to provide hard data on the package's true employment impact. The White House estimates the aid bill signed in February has saved or created 1 million jobs to this point, a figure which is essentially a highly educated guess based on economic models.

While Republicans in Congress are decrying a "jobless recovery," the Obama administration said in pushing for the stimulus program's passage that the job impact would come over a period of up to two years.

That timetable led some critics to argue the late-stage stimulus spending would be unnecessary overkill once a recovery is well underway. Yet with many economists now warning of a possible "double-dip" recession, that late-stage spending may ultimately provide the labor market a little added support if the recovery falters.