The Corner

Job Creation in the States

Using the most recent quarter of stimulus data from Recovery.gov and data from the Bureau of Labor Statistics, I made this chart to put the job-creation numbers in context. This quarter boasts the largest job-creation claims yet from Recovery.gov: 755,454 temporary jobs. However, this must be taken with the accompanying 2.62 million American jobs that have been lost since the passage of the Recovery Act.

As you can see, we are far from the millions of jobs promised by Christina Romer and the White House (see here).

Also, I say temporary jobs because when the stimulus money goes away, the jobs are likely to go away. In fact this is the main reason why we should be against bailing out the states and against more stimulus money. This temporary money allows the states to delay addressing the fundamental reasons why their budgets are in the red: They spent too much money. This paper by Matt Mitchell has the data:

State and local government spending has grown at a remarkable clip over the last half-century. Since the close of World War II, aggregate state and local spending grew 34 percent faster than the private sector and 37 percent faster than federal government spending. In recent years, the difference in growth rates has widened. From 2000 to 2009, state and local government spending grew nearly twice as fast as the private sector (while over the same period, the federal government grew even faster). Spending growth has not been uniform across spending categories, and Medicaid spending is by far the fastest-growing component of state expenditures.

Giving the states federal money isn’t addressing their spending problem. In fact, it is just allowing the states to delay necessary spending cuts. As a result, the teaching jobs are only temporarily off the chopping block.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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