How To Make A Job
Tuesday, February 2nd, 2010
The American Recovery and Reinvestment Act may have great potential for economic boosting, but we cannot depend upon it to drive new jobs. The federal government website www.recovery.gov provides detailed information on how the $787 billion of American Recovery and Reinvestment Act funds are being distributed. As of January 22, the government has paid out $268.8 billion in the form of tax benefits ($92.8 billion), contracts, grants, and loans ($73.2 billion), and entitlements ($102.8 billion). Data on the recipients of stimulus funds is broken down by sub-units as small as zip codes.
ShoreBank’s oldest location is in the heart of the South Shore neighborhood in zip code 60649, where unemployment is more than 20% and home values have declined by more than 40% in one year. A total of just one contract and one grant have been awarded in this zip code. The contract was for $1,800 to H L Jackson Consulting Company to review grant applications. The grant was for $200,000 to an organization called Featherfist to provide services to the homeless. That $200,000 is part of a larger $34 million grant to the City of Chicago which in turn created just 60 jobs, although none at Featherfist.
Based on aggregate data from recipients, 599,108 American workers were being paid by stimulus funds in the fourth quarter of 2009. This seems like a pathetically small number, with more than 15 million Americans unemployed. But it merely underlines what should be obvious: government does not have the capacity to be the primary job creator. Government primes the pump, but the private sector does the work.
Recent reports on Gross Domestic Product growth and strengthening activity in manufacturing are the real signs of progress. GDP surged 5.7% in the fourth quarter, fueled by gains in business spending on software and equipment. Manufacturing activity in January expanded for the sixth consecutive month and manufacturing industry employment is projected to increase in the months ahead. Employment is already growing in fields as diverse as textiles, petroleum & coal products, and transportation equipment. Hopefully, it won’t be too long until job growth returns to 60649 and beyond.
These unconventional lenders bring new energy and new concerns to the field of energy efficiency. For instance, for my colleagues in Portland, while reducing energy consumption is a priority, so too are creating social equity, job opportunities for disadvantaged populations, and proliferation in access to responsible credit for under-served communities. Reconciling this larger set of goals against the historical focus on energy savings alone will be an important challenge going forward.