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Jobs Before Money? Money Before Jobs? Both Are Possible

We all know that creating jobs is more important than counting jobs. But when misinterpreting the count casts doubt on their creation, it is worth talking about the count.

We all know that creating jobs is more important than counting jobs. But when misinterpreting the count casts doubt on their creation, it is worth talking about the count. Two aspects in particular worth discussing are how recipients create jobs before receiving money, and why some awards don’t yet show jobs.

Some critics have raised questions about jobs being reported as created or saved without any money been spent by the recipient.   They ask, “How could this happen?” 

In many cases we would expect to see job creation before a recipient receives or spends money. For example, sometimes states are not able to pay State Fiscal Stabilization funds to school districts right away. However, knowledge that these funds are on the way have allowed many school districts to retain teachers that they would otherwise cut. When districts know they can count on the money, they can keep teachers on the job. And this isn’t just a hypothetical example. It’s a real, tangible example of what you would see in Connecticut. You can check it out online here.

There are countless other examples, not only in education. Sometimes you see this in transportation programs, where the government only pays out money only after a reimbursement request is submitted. So, a contractor could have hired hundreds of people, and built an entire stretch of road before receiving a dime. If you believed what the critics say, you may think there’s no way these jobs could exist—that someone cooked the books, or entered wrong data. But you’d be wrong. You see this accelerated job creation in our science spending as well – for example, in South Carolina where a $591,000 grant to a research foundation allowed that foundation to keep two people hired as a result. How much money had the foundation received? None, but they know it’s coming, so they planned ahead.

Some critics point to the opposite sort of report: many awards that show money being spent, but no jobs being created. Let’s see why this is not a cause for concern. 

Many recipients got their money at the very end of the reporting period, and simply hadn’t yet hired anyone before the period ended. Several awards (literally billions of dollars worth) were awarded just before the close of the reporting period. You can see this yourself if you look at many of the NIH awards on Will a large number of these awards create jobs soon? Yes! Take an NIH grant received by a university in Pennsylvania for $2.7 million. This grant was awarded on 9/30/2009—literally the last day before reports had to be prepared.   So it’s no surprise that this university got funds, but hasn’t yet hired. The fact that these awards show money received but no jobs created isn’t bad news— it’s telling us that the best is yet to come.

Many recipients are just starting work on their awards, and explicitly say so in their reports. Awards of billions of dollars show the same.   When filing reports, recipients were able to comment on how complete their project is: zero percent, less than fifty percent, more than fifty percent, or complete. A zero job award may not mean the same thing if it is also not yet started—and there are many of these. One simply has to look. Take this example: a police department in North Carolina received almost $500,000 but had reported no jobs. Their project status shows less than 50% complete. A simple reading of the description would paint a fuller picture: “Although no jobs have yet been created, 4 Crime Analysts will be hired in October. We had started the hiring process at the end of September.” 

And don’t forget: many recipients are creating jobs, but they’re just not the types of jobs that get reported on. Nevertheless, they can be seen across the reports: reports on science equipment ordered, on construction material bought, on cars bought. These things create jobs... just not reported on jobs. Some non reported jobs are even more obvious: one recipient in Georgia states “Although they are not included in our direct hire FTE calculations... more than 1,000 staff augmentation subcontract workers have been added to our site ARRA workforce.” Again, non-reported on jobs can be spotted across reports from every corner of the country.

Sure, at the end of the day people may wish every report was audited. But of course, that can’t be done—funds were not provided to hire auditors, not to mention that that would have been a waste of needed funds. Instead, the reports are online for everyone to see. All people have to do is look.

G. Edward DeSeve is Special Advisor to the President, Assistant to the Vice President and Special Advisor to the OMB Director for Implementation of the Recovery Act