Commentary

Stimulus: $28 billion Creates 65,110 jobs

Bob Poole’s most recent edition of Surface Transportation Innovations newsletter (No. 93, July 2011) reminded me of this study from the General Accountability Office (June 2011) throwing a lot of cold water on the hyped-up promise creating jobs through the Stimulus Program. Almost all the transportation allotment has been obligated ($45 billion out of the total original Stimulus (Recovery Act) budget of $800 billion). About $28 billion actually has been spent. So, how many jobs were created? That’s a tricky number, but, according to GAO:

“The Recovery Act helped fund transportation jobs, but long-term benefits are unclear. For example, according to recipient reported data, transportation projects supported between approximately 31,460 and 65,110 full-time equivalents (FTE) quarterly from October 2009 through March 2011. Officials reported other benefits, including improved coordination among federal, state, and local officials.”

Note that the language of the report says jobs were “supported,” not created. That’s a much better way to characterize the spending and more honest than the rhetoric surrounding the initial claims of job creation from the stimulus program. These aren’t jobs “created” as much as they are supported by propping up spending (many of which are projects with dubious benefit to productivity and economic efficiency).

But, the bottom line is this: 65,110 jobs does not amount to much for $28 billion spent. Even if we include a standard rule of thumb multiplier of 2 (or even three), a back of the envelope estimate of jobs created would be about 200,000 (or about $430,000 per job).

Interestingly, this estimated number of jobs supported is also far below the more recent job creation potential estimates provided by the U.S. Department of Transportation suggesting that a billion dollars of federal and state/local spending on transportation would support 27,800 jobs.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.

Staley is the author of several books, most recently co-authoring Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century (Rowman & Littlefield, 2008). Texas Gov. Rick Perry aid Staley and Moore "get it right" and world bank urban planner Alain Bartaud called it "a must read for urban managers of large cities in the United States and around the world."

He is also co-author, with Ted Balaker, of The Road More Traveled: Why The Congestion Crisis Matters More Than You Think, and What We Can Do About It (Rowman and Littlefield, September, 2006). Author Joel Kotkin said, "The Road More Traveled should be required reading not only for planners and their students, but anyone who loves cities and wants them to thrive as real places, not merely as museums, in the 21st Century." Former U.S. Secretary of Transportation Mary Peters said, "Balaker and Staley clearly debunk the myth that there is nothing we can do about congestion."

Staley's previous book, Smarter Growth: Market-based Strategies for Land-use Planning in the 21st Century (Greenwood Press, 2001), was called the "most thorough challenge yet to regional land-use plans" by Planning magazine.

In addition to these books, he is the author of Drug Policy and the Decline of American Cities (Transaction Publishers, 1992) and Planning Rules and Urban Economic Performance: The Case of Hong Kong (Chinese University Press, 1994).

His more than 100 professional articles, studies, and reports have appeared in publications such as The Wall Street Journal, The New York Times, Washington Post, Los Angeles Times, Investor's Business Daily, Journal of the American Planning Association, Planning magazine, Reason magazine, National Review and many others.

Staley's approach to urban development, transportation and public policy blends more than 20 years of experience as an economic development consultant, academic researcher, urban policy analyst, and community leader.

Staley is a former chair for his local planning board in his hometown of Bellbrook, Ohio. He is also a former member of its Board of Zoning Appeals and Property Review Commission, vice chair of his local park district's open space master plan committee, and chair of its Charter Review Commission.

Staley received his B.A. in Economics and Public Policy from Colby College, M.S. in Social and Applied Economics from Wright State University, and Ph.D. in Public Administration, with concentrations in urban planning and public finance from Ohio State University.