Article 43


Tuesday, November 24, 2009

A Stimulus Plan That Doesn’t Create Jobs

Is federal stimulus money being used for IT hardware, not hiring?
Info from reveals $26 million in federal spending at technology companies accounts for only 21 jobs either created or saved

By Patrick Thibodeau
November 24, 2009

As part of the ECONOMIC RECOVERY PLAN passed by Congress and signed into law earlier this year by PRESIDENT OBAMA, government agencies, private companies, and non-profits are required to report the number of jobs created or saved by the stimulus package. Those job numbers are now available at RECOVERY DOT GOV, and a sampling of them indicates that the money spent so far has been better for HARDWARE than HIRING.

Among the technology companies getting money from FEDERAL STIMULUS SPENDING is Computer Sciences Corp. (CSC), which won two IT projects at NASA that total nearly $10 million. But no jobs are being created with that money.

CDW Government received two contracts, one for $2.4 million and another for $3.9 million, both for computer equipment and services at the U.S. Department of State. On both contracts, CDW said the “cumulative effect” of the awards resulted in four retained jobs, such as account managers, field account executives, advanced technology account executives, sales specialists, and sales management “as CDW-G is primarily staffed with these types of positions.”

Oracle was awarded $1.25 million for “custom computer programming services” for the Social Security Administration, but that project created no new jobs. Oracle declined to comment.

IBM was also awarded a Social Security Administration contract—this one worth about $8.5 million—to upgrade systems around the country. IBM put the number of jobs created or saved at 16.8.

In total, these projects represent about $26 million in federal spending and account for about 21 jobs either created or saved. The paucity of job creation seen to date, given the hundreds of billions of dollars allocated for the ailing economy, has raised questions about how well the stimulus package is working. Critics have argued that more needs to be done, given the nation’s 10.2 percent unemployment rate, and even Obama himself is now planning a jobs summit next month.

But stimulus backers have countered that direct hiring is only one piece of the employment puzzle. To get a complete picture, the government says the job estimates need to include indirect jobs, which could be subcontractors, equipment orders, even money spent on restaurants and travel in support of the work.

The federal government estimates that for every $92,000 spent by the U.S. one job is created or saved, although that figure covers all occupations, including highly paid ones. The U.S. claims the stimulus money has created an estimated 640,000 jobs.

But drawing a line that connects the $787 billion stimulus package to tech hiring is difficult. The hemorrhaging of tech jobs may have stopped, according to the latest employment data, but there’s no way of connecting that with federal spending at The same is true for anecdotal employment indexes, such as jobs board, which shows an increase in hiring activity in both contract and full-time employment. In July, Dice said it had 48,993 jobs listed, including contract work. It’s now at nearly 54,000, a 10 percent gain.


Posted by Elvis on 11/24/09 •
Section Dying America
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