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Stimulus Details
STIMULUS DETAILS....In case you're curious, Barack Obama's economic boffins now estimate that his stimulus plan will create 3.6 million additional jobs over the next two years. And if you're further curious about how likely this is to affect you, the estimated breakdown by industry is on the right:
To get more detailed information on the breakdown of the jobs created, we use a simulation from a prominent private forecaster on a plan that is similar — though not identical — to the type of plan the President-Elect is considering....The estimates suggest that 30% of the jobs created will be in construction and manufacturing, even though these industries employ only 15% of all workers. Both sectors have been particularly hard hit recently. The other two significant sectors that are disproportionately represented in job creation are retail trade and leisure and hospitality.
Later in the report the authors helpfully estimate that 42% of the new jobs will go to women. Bruce Bartlett emails a very brief critique of the report: "Some of these numbers look rather dubious to me, especially those for 'indirect' job creation." Perhaps so, though the broad methodology seems within the ballpark of reasonableness: they assume a net multiplier (spending + tax cuts) of around 1.3 producing nominal GDP growth in 2010 of $500 billion, combined with a "conservative rule of thumb that a 1 percent increase in GDP corresponds to an increase in employment of approximately 1 million jobs." Paul Krugman thinks these numbers sound roughly right and show that the stimulus package is too small. I'll pass along other economic comment as I see it.
Later in the report the authors helpfully estimate that 42% of the new jobs will go to women.
Kevin, that's a weird line from the report for you to emphasize. At first glance, one might think this shows discrimination against women, but as the report says:
Summing across industries suggests that the total number of created jobs likely to go to women is roughly 42% of the jobs created by the package. Given that so far in the recession women have accounted for roughly 20% of the decline in payroll employment, this calculation could reflect that the stimulus package skews job creation somewhat toward women, possibly as a result of the investments in healthcare, education, and state fiscal relief.
The fuller statement would seem to demonstrate the opposite of what your statement insinuates.
Recently, feminists like Katha Pollitt have advocated that the economic stimulus be used to create more jobs for women:
"The economic stimulus is a great place to start addressing gender inequality. In a recent Boston Globe op-ed, "The Macho Stimulus Plan," economist Randy Albelda points out that the jobs Obama talks about--building roads, bridges and schools, developing eco-friendly technologies--are overwhelmingly held by men. It would be nice if suddenly half of construction workers were female, but given that they're now 2.7 percent, realistically that is not going to happen. Even doubling or tripling the small number of women in the relevant job categories would be a stretch. Albelda proposes an additional stimulus plan, for the female side of the economy: "Caring for those who cannot care for themselves, healthcare, and primary education are the very foundation of a civil society. Investing in these outcomes is as vital to our long-term economic health as airports, highways, wind turbines, and energy-retrofitted buildings." Not only do these jobs disproportionately employ women, she points out, but "investments in direct care, education, and healthcare would also go a long way in alleviating poverty."
The reality is that even without the economic stimulus, trends in society that Obama (we hope) will likely continue (aka, emphasis on healthcare, emphasis in education (and even as your graph shows, increased white collar/professional services)) already favor industries where women are doing very well (compared to men.)
According to the Boston Globe, over the past year, "1,069,000 fewer men are working than a year ago. 12,000 more women are working." ( http://www.boston.com/business/articles/2008/12/05/losing_jobs_in_unequa... )
Here's a Labor Department graphic of the gender breakdown of current job losses.
cache.boston.com/bonzai-fba/Globe_Graphic/2008/12/05/globegiftastic__1228466472_3621.gif
So I am not sure what your 42% line is supposed to be demonstrating. Perhaps in this economic downturn, it would be better for all of America if men, who lost jobs, were actually emphasized in the economic stimulus plan. I don't see a lot of construction workers or assembly line workers becoming doctors, lawyers, management consultants, health care workers....
(Yet another instance of "Feminism not being aligned with liberal or progressive values.)
(actual links removed to get past your stupid spam filter.)
Should be:
Recently, feminists like Katha Pollitt have advocated that the economic stimulus be used to intentionally and disproportionately create more jobs for women, including a call for a specific economic stimulus plan just for women.
I found this at Glenn Sacks' blog -- if you bothered to read Sacks, you would probably agree he holds mostly liberal views -- perhaps more liberal than yourself and certainly as liberal as many of the feminist bloggers you like to blogroll. Just not as kneejerk because kneejerk was never meant to be part of the liberal platform.
Regarding the percent of the jobs that would go to women...
You're right - On page 9, the report that you linked to states 42%: "Summing across industries suggests that the total number of created jobs likely to go to women is roughly 42% of the jobs created by the package."
But on the very next page (10), in Table 5 "Fraction of Employment that is Female " the jobs are broken down by industry and totaled at the bottom. The total says 49%.
I'm not an economist, so I could be mixing apples and oranges, but I checked this quickly by taking the total number of jobs that would go to women (1,529,000) provided in Table 5, and divided it by the total number of jobs overall (3,675,000) from Table 4 in your post, and on page 8. The answer my calculator gave me was 41.6%.
So where does this 49% figure in Table 5 come from?
Just asking...
Almost 700,000 construction jobs and only 240,000 education jobs. Good thinking. That will keep the next education bubble from ruining our economy. Wait, what?
gee, around 150,000* people enter the workforce every month due to population growth, 150k * 24 is 3.6mil, so those 3.6mil "new" jobs will be just about enough to keep the employment to population ratio constant. very bold.
* choose your own number, I've also seen 120k used instead
Instead of funding specific infrastructure projects, Congress should just give states per capita block grants, let them decide if they need to build new roads or pay their teachers or cut state taxes.
Conveniently enough, the Constitution divides up the House on a per capita basis. If Congress gave states a billion for each House seat ($435 billion total, not counting DC and territories), that's a cool $53 billion for California.
However, step one of any stimulus plan should be a FICA tax holiday. Since its starts on dollar one of income (it caps out around $100,000) and the $65 billion a month tax bill is split between worker and employer, it would immediately put more money into the hands of families and businesses. Even "shovel-ready" infrastructure projects will take 3 or months to get money circulating, the FICA tax holiday could kick with the next paycheck, and can be scaled back or repealed just as quickly.
"boffin". Hmmm; good word.
supersaurus: You are right with the 150K number (or 160K). I have seen this number used very widely and it has been that way the last few years. A minor correction: You said this many people are entering the job market every month. Correction: this is the number of net new job seekers (i.e. number_entering_workforce - number_leaving_workforce).
As far these projections for new jobs are concerned, the important question to ask is How long will jobs be around, considering that these are a result of a temporary injection of funds? This money is being borrowed from our future generations. We are stealing from our (grand)children to pay for our profligacy.
Dang, I ate some words. My question was: How long will these newly created jobs be around...
rational,
According to the dictionary, "boffin" has been around since the early 1940s. Thanks Kevin for keeping it alive.
rational: yes, thanks for the correction about net new job seekers, sloppy thinking on my part.
the fact that this number is largely ignored by the media is what allowed bush to get away with babbling about strong jobs creation so many times when in fact the net was negative.
We are stealing from our (grand)children to pay for our profligacy.
at the moment I think a lot of economists would argue that 1) whatever we've already stolen is a sunk cost so there is no use whining about that, and 2) what we are at least attempting to do is prevent a catastrophe much worse than raising the national debt.
we won't get to do the experiment since there is only one universe, but it seems likely that our grandchildren would be happier to read about a nasty recession in their pasts than to have lived through the tail end of a decade-long depression. yes, it is impossible to know the alternate paths, but there sure seem to be a lot of economists who are terrified about the present prospects if the government is unable to restart the motor.
Before March 2003 several people pointed out that the Iraq war was unnecessary. Yet Bush dragged us through it and we later found out that the skeptics were very right. A responsible nation would have punished the people who took us through the Iraq war.
Same with this Credit crisis. The insanity of living on borrowed dime and the excesses surrounding lending and leverage were pointed out for several years. The nation ignored these skeptics, but now, after they were proven right, says "hey it is a sunk cost. Let's move on." That attitude guarantees us that we are focused on covering up our mistakes rather than learning from them.
What a wonderful country. People in power and wealth are allowed to rape and pillage the population in broad daylight. And the population tries very hard to ignore the pain in the orifices, and prepare to bend over again for more of the same.
Sorry for the visual, but that is how I feel about "sunk costs" because I know how everyone ignored warnings well before the costs were sunk.
The job-creation numbers are impressive, but I hope the other details don't get lost in the discussion. I think we need the stimulus plan, and it needs to be very large, but Congress needs to make sure that it continues providing benefits in the long term, not just a shot in the arm for the short term.
The infrastructure spending will help keep the economy growing in the long term, but it would also be helpful if Congress could find a way to encourage businesses to invest in infrastructure as well. Possibly they could do this by making sure there are fewer unnecessary regulations that dissuade businesses from making those investments. There seem to be many businesses that have money to invest, but not as many that are actively investing in any forward-thinking enterprise. Hopefully Congress can find ways to get that money flowing.
The tax cuts on businesses would certainly be helpful, especially on small businesses or businesses in sectors where there is potential for significant job creation. We need the businesses like that to be able to resume their traditional role as the engine of our economy. The government can certainly assist the process getting started, but businesses will actually provide the growth.
I think the aid to the state governments is also needed, because the programs that the state governments support are needed for sustained growth. For instance, the state governments support schools and public workforce training programs. It is important to make sure both of those programs survive to make sure we are able to provide workers for whichever sectors of the economy are providing the jobs.
I recently saw that the Friends of the U.S. Chamber of Commerce is working with Congress to make sure that they take these things into account when they are designing the stimulus package. They have a petition that I encourage everyone to sign to make sure Congress knows that we want the economy fixed - but we want it fixed for the long-term - http://www.friendsoftheuschamber.com/takeaction/index.cfm?ID=76
Anything which purports to make this specific amount of predictions about large economies, I would think is bogus. But I may be wrong. Coming from a pure science field I just know how hard it is to get things right when there are only a few variables. I would hate to predict anything so chaotic as the number of jobs created by a government action.
Kevin, I challenge you to compare this prediction with the actual data when it comes out.
rational: you misunderstand my use of the term "sunk cost". a sunk cost is one you can't recover or change by a proposed course of action, that doesn't mean the things that ran up the current national debt were necessarily good. one can argue about the errors that led to it until the cows come home, but none of that will change it, hence it is better to spend time arguing about how to get out of the current mess. you have to consider the fact of the current debt when planning of course, but the worthwhile question is "will this course of action make things better in the future" not "who screwed us in the past". of course that doesn't mean nobody can think about punishment, but that isn't really an economist's job.
The tax cuts on businesses would certainly be helpful, especially on small businesses or businesses in sectors where there is potential for significant job creation.
really? in 1950 the effective corporate income tax rate ("effective rate" takes deductions and loopholes into account) was about 50%. in 2004 (latest numbers I could find) it was about 25%, see http://www.gao.gov/new.items/d08950.pdf.
so we have a long history of cutting these rates, but if we do it just one more time then suddenly the magic will happen?
people like the WSJ editorial page like to complain about the high (40%) nominal rate, but that doesn't really matter since that isn't the real tax rate. try proposing to businesses that we cut the nominal rate to 30% but remove all the loopholes they have lobbied so hard to get over the last 50 years. don't forget the current corporate tax system is one corporate america bought and paid for.
Obama says his stimulus plan will create 3.6 million jobs but he does not state that these are the only jobs that will be created by the economy. To look at that and say, as supersaurus does, that this only creates enough jobs for people entering the job market is really beside the point. Although the economy is dismal, there are new jobs being created, just not enough. So Obama is trying to use federal money to boost the number of jobs. And he's trying to create jobs that will be long lasting and for work that will be long lasting.
BC: I did not state anywhere that the stimulus jobs are the only ones that might be created, please confine your rebuttals to non-strawmen, however I am taking Obama at his word when he says 3.6 million jobs. this is not even enough to cover the net change in the workforce let alone the jobs that have recently been lost.
I cannot see how the net number of jobs created is "beside the point"...I thought that was what we were discussing.
don't get the idea I don't think the economy needs to be stimulated, rather I'm complaining about too much moderation in the stimulus package(s). better to aim high and scale back later than to aim low and fail in the restart. it wouldn't be difficult to adjust if suddenly we found too much money floating around, but people like krugman, i.e. real economists, don't seem to be worried about that side at all, rather they worry that the trickle won't do the job.
supersaurus: I agree we need to dig ourselves out of this situation because we are here and can't change it. But very little is being done to address why we got here and to punish the people who ignored warnings and deliberately got us here. There are enough people in our country to spread between working on reacting to the problem and working on identifying and fixing the fundamental problems.
For example, how many people were punished for lying and taking us into the Iraq war? Those bad actors got what they wanted and the country had to scramble to react to the consequences of that malice. Now we have new problems elsewhere so we don't have the time and motivation to go back and punish the bad actors. The message is clear: You can get away with almost anything if you do it on a large enough scale. We keep getting ourselves into the same old problems because we hardly do anything to identify root causes and address them.
Any attempt to use the economic stimulus plan to solve social justice issues is just plain stupid. Just what one would expect from progressives.
My calculations also predict 3.6 million jobs over the next two years, but my analysis differs. I see either no result or negative result from the Obama stimulus, but growth resulting in 3.6 million jobs from the Bush tax cuts kicking in and trickle down from defense spending, where you get the biggest bang for the buck.
Ah Luther, you really are a Johnny one-note aren't you?
Heh heh. You should join the other rigid 'conservative' leaders competing to see who can be the best at "getting back to the past."
Heh heh. Unfortunately for you time's arrow points only one direction and even at the quantum level travel to the past is greatly limited.
Hey, I didn't make the rules, I just follow them.