Roughly a year after the $787 billion stimulus bill became law, the Obama administration is claiming that it created or saved 1.7-2 million jobs. While that’s at least better than the 640,000 it was claiming in October, for 2 million jobs, that still comes out to $393,500 per job. Spread over 2 years, that’s still $196,750 per job per year–nice work if you can get it! That’s quite a bit higher than the average wage plus benefits afforded to federal government workers ($119,982 per year) and much higher than that earned by private sector workers ($59,908).
It suggests that if the goal were simply to create or save jobs, the stimulus bill is doing this in a very inefficient fashion. If the government had simply paid people $100,000 in salary and benefits (and administration costs) for two years, it could have created 3,935,000 of these “jobs.” I’m not sure what we’d get out of people having these “jobs,” but it’s not entirely clear what we’ve gotten out of the stimulus yet, either.
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Laura Vanderkam is the author of 168 Hours: You Have More Time Than You Think (Portfolio, 2010) and Grindhopping: Build a Rewarding Career without Paying Your Dues (McGraw-Hill, 2007). She is a member of USA Today's Board of Contributors, and her work has appeared in Reader's Digest, Scientific American, Wired, The American, Portfolio and other publications.
Write to her at lvanderkam at yahoo dot com.
Laura, I suspect that your math leads you to the wrong conclusions. First, you did not take into account that only between 33% and 45% of the stimulus funds have been spent, the precise number depending on the chunk you look at.
Second, by dividing the stimulus money by the number of jobs created or saved, and comparing it to wages + benefits, you are assuming that all the stimulus money ends up in salaries + benefits, which is very far from reality. A big chunk goes, for instance, to public works like roads and bridges, and another big part to tax breaks, which does not necessarily fully translate to more workers hired or kept.
Domestic spending in roads and bridges and so on will also create more jobs in the future. For instance, if you build new road paths that make businesses save money on transportation of goods, these reduction in fix costs may allow businesses to hire more workers in the long term.
If you take all this into account, the conclusions are going to be very different.
You can get numbers at http://www.recovery.gov .