Commentary Magazine


Contentions

Study: Half of Hired Stimulus Workers Were Already Employed

This is yet another example of why it’s tough to calculate the actual job-stimulating benefits of the stimulus plan. The Recovery Act’s success is typically measured by looking at how many jobs have been created. But there’s also job “shifting,” which happens when a business uses stimulus funds to hire someone who was already employed at another company. And according to a new study from George Mason University’s Mercatus Center, that’s been the case with nearly half of the workers hired under the Recovery Act:

Hiring isn’t the same as net job creation. In our survey, just 42.1 percent of the workers hired at ARRA-receiving organizations after January 31, 2009, were unemployed at the time they were hired (Appendix C). More were hired directly from other organizations (47.3 percent of post-ARRA workers), while a handful came from school (6.5 percent) or from outside the labor force (4.1 percent)(Figure 2). Thus, there was an almost even split between “job creating” and “job switching.” This suggests just how hard it is for Keynesian job creation to work in a modern, expertise-based economy: even in a weak economy, organizations hired the employed about as often as the unemployed.

A substantial portion of the jobless population has been out of work for longer than six months, but this group is also the hardest to help. The problem isn’t necessarily a lack of jobs, but a lack of suitable education or skills. The Obama administration has proposed federally-funded job training programs, but these courses tend to be inadequate. In the eyes of many employers, training isn’t a substitute for a college degree or experience.

The latest proposal – which will likely be included in Obama’s upcoming jobs plan – is to create a program similar to the one in Georgia, which gives people eight weeks of paid, on-the-job training at an actual company:

Obama wants to help those who have been out of work for six months or more, which adds up to about 6 million Americans. Specifically the president is looking at a program such as Georgia Works – which gives unemployed Americans eight weeks of training at a local company while allowing them to still collect their unemployment benefits. And it’s no cost to the participating company.

There have been questions about the effectiveness of Georgia Works that Politico tackled recently. The program has also drawn opposition from unions, which are worried about it being exploited by companies looking for free labor – and they do have a point. When businesses are provided with an endless supply of temporary workers, wouldn’t that actually make them less likely to hire full-time employees? Beyond that, it does sound like a creative way to address the problem, and would least give on-the-job experience to the unemployed, which couldn’t hurt.


Join the discussion…

Are you a subscriber? Log in to comment »

Not a subscriber? Join the discussion today, subscribe to Commentary »





Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor to our site, you are allowed 8 free articles this month.
This is your first of 8 free articles.

If you are already a digital subscriber, log in here »

Print subscriber? For free access to the website and iPad, register here »

To subscribe, click here to see our subscription offers »

Please note this is an advertisement skip this ad
Clearly, you have a passion for ideas.
Subscribe today for unlimited digital access to the publication that shapes the minds of the people who shape our world.
Get for just
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor, you are allowed 8 free articles.
This is your first article.
You have read of 8 free articles this month.
YOU HAVE READ 8 OF 8
FREE ARTICLES THIS MONTH.
for full access to
CommentaryMagazine.com
INCLUDES FULL ACCESS TO:
Digital subscriber?
Print subscriber? Get free access »
Call to subscribe: 1-800-829-6270
You can also subscribe
on your computer at
CommentaryMagazine.com.
LOG IN WITH YOUR
COMMENTARY MAGAZINE ID
Don't have a CommentaryMagazine.com log in?
CREATE A COMMENTARY
LOG IN ID
Enter you email address and password below. A confirmation email will be sent to the email address that you provide.