Let the Count Begin!

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For Your Reading // Learn Something

This month, New York City will report on the actual number of jobs created in the five boroughs by the American Recovery and Reinvestment Act (ARRA), commonly known as “the stimulus package”. Unprecedented federal disclosoure requirements mandate specific rules for job tracking.  The first ARRA reporting period closes this week.

The City is expected to release employment numbers on October 30, 2009.

Currently, the City tracks job estimates and posts them on the Mayor’s Office of Operations’ NYC Stimulus Tracker website. I was recently at conference where City officials were careful to stress the word estimate when fielding questions regarding job creation.
When it comes to counting jobs created, the word estimate could be a synonym for “fun with statistics” or “really clever econometrics” or “projections so long-range that they are meaningless”. You get the point…
The City uses three types of jobs in its projections:
  • direct jobs – jobs created when a new contract is funded by ARRA money allocated to the City
  • indirect jobs – jobs created when a company, armed with a fully funded contract, hires new employees
  • induced jobs – jobs created by other jobs that were created

When a company hires 50 new roofers, those roofers eat lunch at a local deil. The money they spend pays for the deli to hire a new sandwhich maker.  That sandwhich maker just received an induced job!

These projections can be relevant.  Although, they typically end up inflated.  Clever estimates explain how an ARRA funded ferry terminal project creates an estimated 4,000 jobs when only 20 people in construction hats are actually on site.

Federal reporting requirements are far more stringent.  If a company wants to say they used stimulus money to save a job, they must have their employee sign an affidavit stating that they would have been laid off if not for stimulus funds!

Critics say the stringent requirements might cause under reporting.  This is bad news for those looking to fend off critics of the stimulus package as a whole.

One thing is for sure, you can look for the City’s job estimates to change drastically when they morph into concrete numbers this month.

Also, employment estimates are currently broken down by project.  However, federal requirements only mandate reporting of the numbers according to funding stream.  If the City leaves these numbers in the aggregate, it will be difficult to tell exactly where the worst inflation occurred.  Transparency advocates are pushing the City to break down these numbers.

Tell the Mayor’s Office of Operations to do the right thing and report real job numbers in a meaningful way.