The Job Exchange

Tapping Into The Hidden Job Market

The Math for 3.5 Million Jobs

From Time Magazine

Congress…has put together a $789 billion stimulus package to get the economy on the road again. The most interesting and obtuse comment about the new plan came from Senator Harry Reid, who said the legislation would create 3.5 million jobs.

The 3.5 million jobs forecast has always been a mysterious subject. The language used in the original House stimulus bill indicated that the programs in the legislation would create or save 3 to 4 million jobs. The “save” part is an important distinction.

No one was discussing…what will happen if the economy continues to lose jobs at the rate it did in January. A total of 3.5 million people could be out of work between the beginning of this year and the end of June. The stimulus package will probably not have even kicked in by then. So, with the job losses from January 2009 through the end of June at 600,000 a month, the entire $789 billion will be spent filling this unemployment crater. What will it cost to add another 3.5 million jobs after the job losses from the first half of the year have been reversed? Perhaps another $789 billion.

There is a temptation to say that the stimulus package is simply a cruel trick, meant to give people some hope. Members of Congress will be able to take credit for its results two years from now if it works, or they can simply say the economy was too far gone to be saved if it fails. Either way, the issue is not creating 3.5 million jobs–it is creating 8 or 9 million.

02/12/2009 - Posted by | Economy, jobs | , ,

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