A report released by President-Elect Obama’s top economic advisers outlines where the new economic stimulus package will create jobs. The expected number of jobs is 3,675,000.
Here’s a chart from the Wall Street Journal outlining where the jobs will be:
The biggest sector will be in Construction – almost 10%. I’m guessing this will be due to all of the infrastructure projects.
What’s interesting is the next biggest percent increase will be in Retail Trade; 4%. This tells me that there is an expectation that consumer spending will grow. This could be due to tax cuts which will help both businesses and consumers.
Interesting so far. We’re seeing more details for the economic stimulus every day. Let’s hope that the money will be put to good use and the jobs created will be necessary ones that can be sustained long-term without much government spending. My fear here is that the jobs created may be dependant on government funds which turns this project into a version of socialism. We’ll see.
What do you think?
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{ 21 comments… read them below or add one }
I like the idea of new jobs in the economic stimulus, and I like the fact that we are seeing some level of transparency. However, I’m not terribly impressed with the tax cuts. I don’t think that, in the long run (and maybe not in the short run), they won’t be all that effective.
Miranda’s last blog post..Economic Stimulus: Why I Think Tax Cuts Are a Bad Idea
@ Miranda – I guess the tax cuts will help with consumer confidence to eventually get them spending. A one-time check won’t work as we saw but knowing that an increase in your paycheck could work for many in the long-haul. It’s a little like when the Fed announces what they plan to do with rates over a year. When companies are confident that rates will remain at a certain figure they can better budget. Of course this depends on how long these cuts will be there too!
@ Craig – I couldn’t say how this breakdown was determined. It seems like Obama has something of an all-star team of economists either working for him or ready to help. Not that economists are perfect either but it does lend itself to some confidence that his plan may help.
If the predictions are wrong? Yeah, let’s not go there just yet.
How do you think they determined this breakdown. Like you mentioned it seems like a high increase in retail jobs, that’s assuming consumer spending will pick up. What if there predictions are wrong?
I suppose they may help in some degree with confidence, but I’m not so sure. The cuts won’t be that big, and they’ll not amount to a whole lot per paycheck. And, of course, at some point they’ll have to be raised again. That’s going to cause whoever is in office some major grief.
Miranda’s last blog post..Economic Stimulus: Why I Think Tax Cuts Are a Bad Idea
@ Miranda – I would see it as a gradual thing where people get back on their feet and start spending again. For people with bigger paychecks a small cut could add up to a lot. When it comes time to raise taxes I would hope it would be done gradually as well with an expectation built in way before. On top of all of this companies would be getting some breaks too which helps ease prices for consumers as well.
I’m trying to positive in all of this. I hope it works but only time will tell.
I wish the best of luck to him with this idea. You can’t ever be sure that things will go according to plan, but if it does it’ll help a lot of people.
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I’m interested to see where Obama’s administration will take us. I think job creation is a great way to stimulate the economy (better than handouts), but I don’t know how effective it will be and how long it will take. President OPbama has a lot of big plans, and if he even partially succeed on most of them, then our economy should improve.
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@ Patrick – So far he has some good ideas. Now it’s a matter of seeing if they can be implemented and if they work.
I’d like to see where the jobs have been lost, and how that matches up with the proposed creation chart…
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@ Joe – Good question! But I don’t think you could really match it up one for one. Take investment banking/financial services. They’ve lost a lot of jobs and those people will be moving to different industries when they find work.
@ Dustin – For sure Americans are going to have to re-think their spending habits if we are really going to get out of this financial mess.
I seems to me that trying to get people to spend more money and live outside their means is the exact reason why we are in this mess to begin with. A lot of Americans are already up to their eyeballs in debt and can’t pay their mortgages, but yet government wants to wiggle a few dollars in front of them so they go out and spend more. And the same irresponsible Americans who foreclosed on their houses are going to think that this tiny tax cut means that they can go out and buy that new plasma tv and go more in debt…
@ FFB,
I don’t expect them to match 1-1, but I’m just curious if there is any weighting given to the sectors that have lost more. Your example of financial services workers out of a job makes me wonder how well their skill set would transfer to construction. It’s something I keep thinking about when I hear “infrastructure” jobs being touted as part of the jobs creation aspect… how many unemployed workers are going to be able to jump into that line of work, and for how long? Is that really a solution to high unemployment, or just a feel good band-aid approach to say the administration took action?
Joe’s last blog post..Jim Cramer’s Tips for Detecting Sector Rotation Stock Bottoms
@ Joe – To use the same example, I’m thinking more like that accountant in financial services might be finding work not as a construction worker but perhaps in accounting for a construction company. Or instead of investment banking that person might find similar accounting work in a media company. They keep the same skills but use them in a different sector.
How can Americans be gaurnteed that the jobs will be created? How do you know that people that get the money won’t buy new cars, boats, furs, have lavish vacations, or buy private planes with the money? You can’t control that? Unless you have a monitor for each and every company that will get the stimulus money. The same thing is happening with the banks. The banks are not going to give people loans. Huh! They took that money and bought themselves lavish gifts and gave themselves generous retirement packages. I am in support of President Obama 200%, but I want the President to realize that once that stimulus check is written and delivered there are no controls to how the executive will spend the money.
Another item of concern is bringing the White House into the 21st Century. How will the President and his staff get the technology they need to run the White House and all of the other entities under the White House into the digital divide? Maybe because non of the previous administrations did not use computer technology is why the finances/economics are all array. The white house is still using paper and pencil to account for the money that they are spending. And apparantly they are operating the White House as they did in President Roosevelt’s time in office. Good for President Obama if he is able to bring the White House into the 21st Century – technology wise.
@ Tru B – I don’t think there is a plan to send out checks again; just cut taxes. And I get the feeling that we’ll be getting closer to the 21st century. Part of the infrastructure money could go towards building more wifi hotspots.
Obama’s stimulus plan should also envision changing regulations & economic policies to have short-term & long-term effects on unemployment, middle-class and the market stability. Strengthening the middle class and creating more job opportunities should be the primary objective of the package, rather than handing the blank check to the Wall Street and failed big corporations.
@FFB,
I love wifi hotspots as much as the next guy, but does that really belong in a stimulus bill? Most places don’t charge for using their wifi hotspots, and I’m not sure there are many long lasting jobs creating by such things…
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@ Joe – It goes in the same vein as libraries and schools. It’s building infrastructure. The more internet access we can grant the more online companies, computer companies, and cellular companies can innovate and grow. It’s just one example. But I think some projects like that can help the economy overall. I know there are plenty of places with free wifi but many don’t. And the free ones could be disappearing as companies cut back.
The report from Obama’s staff show the jobs they think will be created, but I found a list of where the dollars are actually going (below).
Many of these don’t really appear to be related to improving the economy. This list is from when the total was around $600 billion. Could someone direct me to a website with the latest ($900B is the last figure I heard).
44,000,000 – Repair to Attorney General’s headquarters in DC
50,000,000 – National Endowment for the Arts
60,000,000 – Mob museum in Las Vegas
200,000,000 – Study electric cars for use in government
209,000,000 – Maintenance upgrades to USDA research building
276,000,000 – State Department computer upgrades
400,000,000 – NOAA to study habitat restoration
400,000,000 – Maintenance of “national treasures” (ex National Mall and Smithsonian)
600,000,000 – Global warming research to NASA
600,000,000 – Help doctors, nurses and dentists “prepare” for universal health care
650,000,000 – Additional $$$ for DTV
850,000,000 – Wildfire prevention in California
1,000,000,000 – Preserve 500 at risk salmon in CA
1,500,000,000 – Build community health centers
1,900,000,000 – “Basic research on physical sciences” for the Department of Energy
2,400,000,000 – Research for “carbon capture technology”
2,500,000,000 – Upgrades of energy efficiency for government run housing
2,700,000,000 – “Rural water disposal” (research how to convert rural homes from septic to sewer)
3,100,000,000 – Improvements to parks and fisheries
6,200,000,000 – “Weatherize” low income homes
20,000,000,000 – “Nutritional assistance for middle income” Americans (expanding foodstamps to 400% of poverty line)
30,000,000,000 – Improvements for roads and bridges (ie “infrastructure”)
100,000,000,000 – Expand Medicaid
150,000,000,000 – Explore “alternative” energy
275,000,000,000 – Paying “refundable” tax credits (welfare checks)
@ Gus – Thanks for the list. Interesting.