Cynical Synapse

Sun, 18 Oct 2009

Stimulus Money Not Helping Michigan

Filed under: Bailout, Budget, Economy, Government, Life, Michigan, People, Politics, Unemployment — cynicalsynapse @ 1:50 pm

A few days ago, the government released their estimate of how many jobs were created or saved from Stimulus bill Federal contracts. It’s not clear to me how they figure how many jobs they save. Is it “thank goodness for that Stimulus money; I was gonna lay Bob off next week”? Anyway, Federal contracts using Stimulus money supposedly equated to 30,000 jobs. These are for things like new fencing at government installations and such. Not what I consider long-lasting jobs for the future. In any case, the Federal contracts amount to about 5% of all Stimulus money.

So, how did Michigan fare in jobs from Stimulus Federal contracts? Certainly the Obama administration is doing everything they can to help the state with the highest unemployment in the nation, right? Well, no. No, they’re not. According to the Detroit Free Press, Michigan is 25th in Stimulus jobs from Federal contracts. Worse, 397 jobs compared to Colorado’s nearly 4,700 isn’t even 10% of the top job-getter. This in a state where unemployment in August fell to just 7.3%! What’s up with that?

US employment, 2009

The whole point of the Stimulus was to jumpstart the private sector. Instead, states are using a large share of their Stimulus dollars for state government life support. While that may save some jobs, mostly government jobs, it also defers making hard choices for a year or two. When there are no more Stimulus dollars, states will need to take chainsaws to their budgets or turn peoples pockets inside out. Simple as that. Politicians don’t get the structural deficits they’ve built into budgets. It’s gonna be ugly.

Back to all those Stimulus jobs, though. The US unemployment rate inched up to 9.8% in September. In fact, the unemployment rate has risen every month for the last 21 months. So far this year, 4,127,000 people have lost their jobs. Construction, an area where Stimulusshould be playing a big part, has seen a monthly average of 66,000 jobs disappear, most during the summer construction season.

recoveryunemploy-200909
Source: theblogprof

And in Michigan, the situation is even more dire. With the highest unemployment rate in the country, 204,000 Michiganians lost their jobs this year. That brings the state’s total unemployment to nearly a quarter million: 740,000. So, those 379 jobs from Federal Stimulus contracts? A mere 0.05% of the unemployed. Gov. Granholm said Stimulus money created or saved 33,000 jobs on Fox News Sunday. So, can somebody explain to me why Michigan’s official website says only 19,498 jobs were created or saved? Is Granholm math dislexic or something?

Her view of Stimulus: “Clearly the stimulus helped although unemployment is at a ridiculously high level.” Really? Using Michigan Recovery’s number of jobs saved or created, 19,498 is still only 2.6% of the total Michigan jobs lost this year. Even Granholm’s inflated number represents a pathetic 4.4%. Better than nothing, but Stimulus is not a long term solution. In fact, it’s not even a short term solution.

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