What Jobs May Be Created by the Stimulus?


By Christopher S. Rugaber — AP Economics Writer

WASHINGTON (AP) — President Barack Obama says his $825 billion stimulus package will create or save 3 million to 4 million jobs. But what kind of jobs would they be?

If it works as planned, the stimulus proposal would create thousands of construction jobs building and repairing roads, bridges and other infrastructure. But it also aims to boost employment in the manufacturing, information technology and energy sectors, among others.

The stimulus includes a whopping $550 billion in spending and about $275 billion in tax cuts. Democratic leaders in Congress hope to approve the bill by the middle of next month.

Here are some questions and answers about the types of jobs likely to be created by the stimulus plan.

Q: Would the stimulus plan stop workers from losing jobs?

A: Not necessarily. Mark Zandi, chief economist at Moody's Economy.com, estimates that the stimulus package would simply reduce the number of jobs lost in the next two years.

Zandi, who favors the stimulus and is a former adviser to Arizona Sen. John McCain, said in a paper last week that without it roughly 8 million jobs would be lost by the end of 2010, pushing the unemployment rate to more than 11 percent.

If the stimulus is approved, he forecasts that job losses would be held to 5 million and the jobless rate would peak at 9 percent.

Q: OK, so how would the stimulus proposal save jobs?

A: By spending roughly $90 billion building and repairing highways, bridges, mass transit systems and other infrastructure projects, for starters.

That would create about 670,000 new construction jobs by the end of 2010, according to Zandi.

But other types of companies would also gain thousands of jobs, according to a study funded by the Alliance for American Manufacturing, including steel makers, concrete and cement companies, and glass, rubber and plastics manufacturers.

Q: Sounds good, but what if I don't work in construction or manufacturing?

A: Obama and congressional Democrats are also planning to spend billions of dollars upgrading the nation's electrical grid. And they plan to expand broadband Internet access and put medical records online.

Those efforts would create jobs for software programmers, computer equipment makers, telecommunications technicians, engineers and other information technology professionals, says Robert Atkinson, president of the Information Technology and Innovation Foundation, a think tank.

Atkinson said that expanding broadband Internet access to rural areas — a $6 billion project in the stimulus plan — would spur additional economic activity, as consumers buy new computers, audio speakers, webcams and other equipment to take advantage of the fast connections.

Q: Are there other areas where jobs would be created?

A: The stimulus would provide approximately $200 billion to state and local governments to pay for health, education and public safety programs. A House committee says that would save jobs for teachers, firefighters and police officers.

Thousands of jobs also could be created indirectly, as people spend money from the stimulus at stores, restaurants, and even on vacation at hotels.

"The construction worker gets hired, and that means he has more money to buy goods," said Gus Faucher, director of macroeconomics at Moody's Economy.com. Consumers will also have more money to spend as a result of the plan's tax cuts, Faucher noted.

That additional spending could support up to 525,000 additional retail jobs and 435,000 restaurant, hotel and other leisure jobs, Economy.com estimates.

Q: Will all this government spending translate into lots of new government jobs?

A: The plan is intended to save many state and local government jobs. It's not clear how many federal jobs will be added. The Obama administration says 90 percent of the jobs created by the stimulus will be in the private sector.

Q: What if I still can't find a job after the plan goes into effect?

A: Obama's stimulus proposal would continue an emergency extension of unemployment benefits until the end of 2009. The program, which provides up to 33 weeks of additional payments, is currently set to expire in March.

The stimulus also boosts food stamp benefits and aims to make it easier for laid off workers to keep their health care insurance.

Q: Does everyone think this will work?

A: No. Many conservative economists think the stimulus is too big, and spends money that could be more productively invested by the private sector.

"When's the last time a bunch of politicians came up with a good way to spend money?" asked David Keating, executive director of the Club for Growth, a conservative group.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Show Comments

Back to Top