Administration helps with estimating jobs created

Agencies can use simple formula for job creation

Agencies should use a simple rule to estimate the jobs created by the economic stimulus law: For each $92,000 in stimulus spending, the result is one job for a year, according to a guidance report issued by the president’s Council of Economic Advisers.

The $787 billion provided by the law will create about 1.5 million jobs by year’s end and 3.5 million jobs by Dec. 31, 2010, the report states. It was released May 11 on the Web.

The council suggested that federal agencies apply the simple rule that $92,000 in government spending creates one job for a year. Using that rule reduces the chances of agencies spending a lot of time developing a patchwork of possibly conflicting job-creation estimates, the authors said.

“The rule’s key virtue is its simplicity and conservatism,” the report states, although the methodology is “somewhat crude.”

Because the rule was developed to be consistent with economic forecasts for job creation, it minimizes discrepancies between agency estimates and “minimizes the resources devoted to early job estimation,” the report states.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

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