Old and busted: Jobs “saved or created.” New hotness: Jobs “supported.” In attempting to advance the argument for Barack Obama’s new jobs stimulus plan, the White House has decided to create a new term that has, er, even less meaning than their previous measure:
The American Jobs Act Will Support Nearly 400,000 Education Jobs—Preventing Layoffs and Allowing Thousands More to Be Hired or Rehired: The President’s plan will more than offset projected layoffs, providing support for nearly 400,000 education jobs—enough for states to avoid harmful layoffs and rehire tens of thousands of teachers who lost their jobs over the past three years.
How exactly did the White House come up with its new metric? Chuck Blahous gives us a detailed analysis of exactly how they crafted this measure to be, well, unmeasurable:
To start the process of estimating educator jobs at risk, the Administration refers to a June, 2011 paper by the Center on Budget and Policy Priorities (a left-of-center think tank). This paper quantifies recent and projected shortfalls in state budgets.
The Administration then makes various assumptions about how the projected shortfalls would be filled. In effect, they assume first that shortfalls would be filled by a combination of tax increases and spending reductions, and then that spending cuts would be applied proportionally across all categories including education. As the Administration materials state, “These spending reduction numbers were then converted into estimates of educator jobs at risk based on estimates of average teacher compensation by state. These calculations implied that, if spending reductions had their full negative impact on education staffing, up to 280,000 educator jobs across the country would be at risk in the 2011-2012 school year.”
The Administration then points to $30 billion in spending contained in the proposed American Jobs Act. The purpose of this spending, as specified in the bill text, is to “prevent teacher layoffs and support the creation of additional jobs in public early childhood, elementary, and secondary education in the 2011-12 and 2012-13 school years.”
Does this give readers a sense of deja vu? The block grants in Porkulus also assumed that states would simply lay off teachers and first responders as a result of large-scale budget deficits in the throes of the Great Recession. That’s where jobs “saved and created” originated; Obama and his team meant public-sector employees in states and local governments. Only those organizations employ a lot more people than just teachers, police officers, and fire fighters; most states have vast bureaucracies that ended up getting “saved” thanks to the infusion of cash that allowed legislatures to put off tough decisions on the size and nature of government during the economic crisis.
Well, the acute economic crisis is over. What’s the excuse for procrastination now? Instead of having the states take responsibility for tough budget decisions, Obama wants to let states like Illinois and California off the hook by forcing other states to subsidize their bad budgeting decisions. Why? Take a look at the recent history of the Electoral College for one reason, and the fact that most of these bureaucrats belong to public-employee unions like SEIU and AFCSME for another reason. That’s what Obama is “supporting.” Let’s recall the extensive reporting in 2009 that showed that jobs “saved or created” were a myth, even in the public sector:
- New Hampshire
- Florida and Georgia
- New Jersey
- California (San Diego)
- New York
At the time, I called these “Porkulus fables,” and it looks like jobs “supported” will be the newest addition to the Obama pantheon of mythical creatures. Blahous explains why:
First, the initial assumption made is that in the absence of these federal appropriations, states would make no effort to prioritize education spending relative to across-the-board budget cuts. Federal funding is to be credited with “supporting” any “job at risk” that is not lost, without accounting for displacement effects. In the real world, however, the presence or absence of external funding for a particular spending priority will have enormous spillover effects upon the tough decisions states and localities must otherwise make to operate within existing budget constraints.
Second, this foundational assumption clashes with empirical results like those shown in Figure 4 of the Administration paper – in which local education employment is seen to plummet virtually at the precise moment that the 2009 Recovery Act’s funds are reportedly supporting education job retention. Advocates will naturally say that “without the funds, the employment decline would have been much worse.” This could well be true to a significant extent, but just as with the “jobs created or saved” claims this is essentially being assumed rather than demonstrated.
Third, there are some conspicuous gaps in the chain of reasoning. The basic logic is that teacher layoffs are driven by state budget shortfalls; funding provided to states/localities under the jobs bill would therefore prevent future layoffs and allow rehires of those previously let go. But the Administration’s state-by-state projections of education jobs “supported” doesn’t fully comport with this representation. For example, the original CBPP paper shows no shortfalls for either Montana or North Dakota in any of fiscal years 2009-13. Yet the Administration document shows a (small) number of jobs “supported” in each of those states under their proposals. This makes little sense if state budgeting shortfalls are indeed the source of all of the education “jobs at risk.”
The biggest problem is that even if numbers of “jobs at risk” were correct, this would tell us nothing about the desirability of the Administration’s proposed policy response. The figures presented effectively describe a set of assumptions about state budgets; they carry no hard information about the efficacy of the AJA. And so we are left with a number that draws no clear connection between the policy advocated and the results claimed. By this same standard, virtually any advocate could reasonably claim that an opposing approach to funding education at the state level would “support nearly 400,000 jobs” – almost irrespective of the specific policy. For evaluating the relative merit of policy alternatives, this is not illuminating.
The cost per job supported comes in right at $75,000 per job, too — which sounds like about the average compensation level for public-sector employees when counting overhead. This presumes that the program has no overhead costs of its own, and I suspect it will resemble the “saved or created” metric in that the only proof of the jobs being “supported” will be the fact that the money got spent. As the series of Porkulus fables proved, that assumption failed badly with “saved or created,” and there’s no reason to believe it will work any better with “jobs supported.”