Reality Check: The Very Real Jobs the Recovery Act is Supporting

Reality Check

Three months ago, the critics denied that the Recovery Act was making any jobs.  Today, everyone – including the critics - can see those jobs for themselves on Recovery.gov.  Now that the evidence has proven them wrong, they are left to cast doubts about just how many jobs were made and where.  But for all of the attempts to distract and distort from the program’s progress, these reports – directly from the recipients of Recovery Act dollars - make one thing indisputably clear: the Recovery Act is now responsible for supporting at least one million jobs across the country. 

It’s time to keep the critics honest.  Here are some of the misleading things you may have been hearing about how we are tracking our progress supporting jobs through the Recovery Act – and the truth behind them:

FICTION: The reports recipients of Recovery Act funds filed are riddled with errors.
FACT: More than 130,000 reports were collected from recipients who were required to fill out 99 different data fields – that's over 12 million pieces of information collected directly from those putting the funds to work.  Much has been made of incorrectly coded Congressional Districts, but that issue – which the Recovery Board has already fixed – affected about 1 percent of reports.  And other potential over or under-counts of jobs you may have seen highlighted in the media amount to less than 5 percent of all reports.

FICTION: The Administration is misleading people about where Recovery Act money is going.
FACT: The reports you see on Recovery.gov were filed by over 130,000 recipients of Recovery Act dollars and they were responsible for inputting the information – including their Congressional District.  We don’t expect that these recipients – many of which are small community organizations or businesses - will do this perfectly the first time out of the gate, but we do take our role reviewing the reports very seriously and continue to work with the recipients to improve the accuracy of their reports.  The fact is, though, that the errors you are seeing are simply typos or basic human error.

FICTION: The jobs that were listed in non-existent Congressional Districts were not real.
FACT: The jobs and related projects listed are legitimate – they were just coded in the wrong Congressional District.  The Recovery Board moved quickly to correct the coding and posting error – but before that happened, the public was still able to click through to find the address of the recipient and confirm their correct Congressional District on their own.

FICTION: The Administration has failed to meet expectations it set for the quality of data it would collect.
FACT: From the beginning, even before the data was collected, Administration officials said repeatedly that they did not expect the initial reports to be perfect, but certainly expected them to provide an unprecedented and largely accurate look at the Recovery Act at work – and they do.  We will continue to collect this information every three months and we expect the data we collect to get sharper and more precise each time we do it.

FICTION: These errors mean that none of the reports and related jobs numbers can be trusted.
FACT: Overall, less than 5 percent of the reports have been identified as potential over or under-counts of jobs.  That is a lower possible revision rate than most long-standing, widely-accepted government economic indicators.  Take for example:

  • Payroll Employment, 2008: Original Average Monthly Decline – 157,000, Revised Average Monthly Decline –230,000, 46 percent lower than original

Independent economist Mark Zandi said it best:

  • "Well, these numbers are [verified]. The 600,000-plus estimates from the administration come from recipients of the stimulus aid. And, so, we know for sure that these jobs are for real.  Now, of course, it doesn't count all of the other jobs created by the tax cuts and other elements of the stimulus. That is much more difficult to count, at least directly. But the 600,000-plus, that's numbers that are counted directly and accurate...  All of the statistics that we get on the economy that the government collects are based on surveys and samples, similar to the one that was conducted here. So, I think they are using the same approaches and techniques in constructing these estimates then -- that we use for constructing all kinds of estimates to try to get a gauge of where the economy is."  [Newshour, 10/30/09]

FICTION:  The jobs numbers are already lower than expected – and this lack of credibility just makes the case for the job impact of the Recovery Act even weaker.
FACT:  In fact, economists say that, because the reports cover less than half of the money put to work so far and only direct jobs, they point to a job impact of at least double what was reported.  So even if reports totaled only 500,000 jobs – not the over 600,000 reported – it would still confirm Administration and independent estimates of over 1 million jobs
But don’t take our word for it.  Here is what economist John Irons, who is testifying before the House Oversight and Government Reform Committee on Recovery Act jobs today, had to say:

  • "New data from recipients of grants, loans, and contracts made under the Recovery Act count about 650,000 new jobs created or retained to date, one of the strongest signs yet that the Recovery Act has led to significant job creation. The data, which reflect a fraction of all the Recovery Act investments made to date, are consistent with other estimates of jobs creation showing that between 1.1 and 1.5 million jobs have been created or preserved as a result of the stimulus package to date. It follows recent news that the economy as a whole grew by a 3.5% annual rate in the third quarter, another indication that the Recovery Act has provided a much needed spark to the economy."  [Economic Policy Institute, 10/30/09]

FICTION: The Administration already had to remove 60,000 inaccurate jobs from the website – who knows what other inaccurate items they’ve posted that should come down.
FACT: The Administration worked with the Recovery Board to have 60,000 over-counted jobs removed from the list before it was ever posted on Recovery.gov in order to dramatically increase accuracy pre-posting.  Items flagged as possible over or under reports since the data was posted on Recovery.gov are a fraction of this size, indicating the vast majority of errors were caught before then.

Liz Oxhorn is Recovery Act Communications Director

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