The Palmetto Insider

The blog of the South Carolina Policy Council

Fuzzy Math Questioned in Stimulus Job Creation Figures for SC

with 2 comments

mathtestA report in today’s Charleston Post and Courier highlights the difficulties associated with assessing stimulus-related job creation.

After Curd Enterprises Inc., a Mount Pleasant plastics manufacturer, won a $7,654 federal contract earlier this year for 67 floating buoys, workers packaged the buoys they had in stock and shipped them to the Army Corps of Engineers for use in Tennessee, the paper reported.

But because the government agency purchased the items with part of the $787 billion federal stimulus money, the company later was asked how many jobs the order created?

At Curd, figuring out the jobs number stumped sales executive Cheri Moody, who used her best judgment to estimate the buoy order’s economic impact, the Post and Courier reported.

“In the end, she wrote down that two jobs were saved, a number that doesn’t account for the order’s transportation, processing and handling of raw materials,” according to the Post and Courier.

“That order came on a slow week, so we were able to keep two more people working in our facility,” Moody said.

Curd’s difficulties illustrate the imprecise nature of assessing the impact of the American Recovery and Reinvestment Act of 2009.

Federal officials recently released an estimate of jobs that either were saved or created through the federal stimulus, putting that figure at about 640,000 jobs nationally and at 8,147 in South Carolina.

The report was released to show Washington’s attempt to prop up the ailing economy, but a closer look reveals that the state’s jobs estimate was calculated using misreported figures and relied on business owners’ best judgment, according to the Post and Courier.

Recently, the state Comptroller General’s Office, which has been attempting to track the flow of stimulus money in South Carolina, expressed reservations regarding information that appears to inflate the number of stimulus-related jobs created in the Palmetto State, as reported on the Palmetto Insider.

“I don’t know that we will ever have numbers that we have confidence in,” Comptroller General’s Office spokesman R.J. Shealy told the Greenville News. “It’s that we don’t have faith in the way the feds are counting the numbers. The process is designed to show a higher number of jobs created than are actually created.”

Case in point: the S.C. Department of Commerce, which registered the largest job creation effort so far. Some 3,495 jobs were created, the result of a statewide temporary summer work program, mostly for young people. Only about one-fifth of those jobs became permanent.

“The idea was to expose those young people to the world of work,” said Peggy Torrey, the Commerce Department’s deputy secretary of work force.

Torrey told the Post and Courier that her agency reported the job numbers based on instructions from the U.S. Department of Labor.

Frank Hefner, a College of Charleston economics professor, said assigning a certain number of jobs to a fixed amount of federal money is a nearly impossible task, but said he was amused that executives and agencies had to “take a wild stab at it.”

“This money clearly helps companies,” he said. “There’s no doubt about that, but does it reflect in any job savings?”

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Written by Cotton Boll Conspiracy

November 10, 2009 at 12:24 pm

2 Responses

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  1. […] 11, 2009 12:56 pm The Charleston Post and Courier deserves plaudits for its recent work analyzing stimulus job creation in South […]

  2. […] already written about the bloated number of jobs “created or saved” by the […]


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