Did Stimulus Dollars Hire the Unemployed?

[dkf]

ARRA funds led to worker hiring and retention at stimulus-receiving organizations that responded to our voluntary survey (Figure 1). On average an organization that received stimulus funds equal to 10 percent of its annual revenue reported retaining or hiring workers equal to 5 percent to 6 percent of its workforce . ARRA funds did more than just sit in bank accounts or pad company profits. However, our data don’t tell how many of these hires were for were part-time or temporary jobs. Our in-person interviews indicated companies frequently included parttime and temporary jobs in reported job totals.

Hiring isn’t the same as net job creation. In our survey, just 42.1 percent of the workers hired at ARRA-receiving organizations after January 31, 2009, were unemployed at the time they were hired (Appendix C). More were hired directly from other organizations (47.3 percent of post-ARRA workers), while a handful came from school (6.5%) or from outside the labor force (4.1%)(Figure 2). Thus, there was an almost even split between “job creating” and “job switching.” This suggests just how hard it is for Keynesian job creation to work in a modern, expertise-based economy: even in a weak economy, organizations hired the employed about as often as the unemployed.

Only about half (47 percent) of responding ARRA-receiving organizations said it was easier to hire high-quality workers than before the financial crisis. The rest said hiring good people was either as hard as (41 percent) or harder than (12 percent) before the financial crisis of 2008 (Appendix B).

There was no tendency for stimulus funds to go to organizations that found it easy to hire good people. Under Keynesian theory, government spending has its greatest effect when targeted toward sectors of the economy with slack; by this job-focused measure, stimulus funds were poorly targeted (Tables 3, 4).

http://mercatus.org/publication/did-stimulus-dollars-hire-unemployed

[midnight]

1. K&R

[WhiteTara]

2. So, almost half the money hired unemployed

people, so the answer to that question is yes, Stimulus Dollars were spent on hiring unemployed people. Remember the people who switched jobs left an empty one behind to be filled.

[Coyote_Bandit]

3. "the people who switched jobs left an empty one behind to be filled"

Not necessarily.

Lots of people are working harder and longer because those positions are not being filled.

Unless there is a labor agreement requiring that the position be filled there is little reason for an employer to fill the position if the remaining employees can fill the job responsibilities for a cost less than that of carrying an additional employee. Those costs are going up because of health care insurance rates. And the remaining employees are all too willing to do what is necessary to keep their jobs.

[WhiteTara]

6. That would be great. Let's get a Democratic House

and hold the Senate.

[kenny blankenship]

4. Stimulus isn't just about hiring unemployed. It also matters that the wages are spent, by whomever.

It might be ideal if all the stimulus money hired people who were out of work - socially speaking. Economically speaking, it just matters that the money is put in the hands of working people who can be expected to SPEND it all, thus filling in the pothole of deflation and preventing deflation's negative feedback loop from running away. The article concedes that many unemployed people were directly hired. I certainly never expected that the stimulus would only go to hiring unemployed people and I can't imagine anyone saying that it would , or that it was supposed to- not unless they were a Rush Limbaugh type that is just looking for a phony yardstick by which to declare Keynesian stimulus a failed theory. But that wouldn't apply to anyone around here, would it? Stopping a deflationary tailspin with fiscal policy stops people who still have jobs from LOSING them. And that's very important, too.

If you want to bitch about something, why don't you bitch about the stimulus being less than half the size it should have been - and being half composed of ineffective tax cuts? It was more like a stimu-less.

[BeFree]

5. Afghan and Iraq Wars: Do they stimulate?

Yes. Our War spending greatly stimulates the economies of Afghanistan and Iraq.

Maybe we should close those and start a war here to get our economy going?
Makes perfect economic sense, right?