Jobs may suffer when stimulus runs out
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Kai Ryssdal: The president did mention the economy briefly this evening. And there is some news on that score.
Last month the White House claimed its stimulus plan had created or saved almost 640,000 jobs. That number was met with a whole lot of head scratching, here included. But today the Congressional Budget Office said the administration’s guess might have been too low. That the stimulus helped save anywhere from 600,000 to 1.5 million jobs. Thing is, that stimulus money is eventually going to go away. So we asked Marketplace’s Nancy Marshall Genzer what happens then.
NANCY MARSHALL GENZER: A chunk of the stimulus cash went toward creating construction jobs. Thousands of workers were hired for infrastructure projects. Things like highway and bridge repair. What’ll happen to those workers when the government stimulus money runs out? Their jobs will run out, too.
Ken Simonson is chief economist at the Associated General Contractors of America, a trade group in Washington.
KEN SIMONSON: Three quarters of construction firms, highway construction firms expect to have to lay off people next year.
And they’re not the only ones. A lot of states used the stimulus money to avoid laying off teachers and other government workers.
Joel Naroff is president of Naroff Economic Advisers.
JOEL NAROFF: State governments that used the money to retain a lot of their workers, they’re going to be facing a crisis as you get to the next fiscal year starting next summer.
But problems could start sooner than that. Only about a third of the $787 billion in stimulus money has been spent so far. But economist Cary Leahey of Decision Economics says the money will run out in March.
CARY LEAHEY: If the private job creation machine doesn’t get sparked up by then, there won’t be much to replace the lost stimulus and people are worried about a very sluggish and disappointing job market.
The unemployment rate is expected to hover in the 10 percent range at least for the first half of next year. It was at 10.2 percent in October. We’ll get November’s jobless figures this Friday.
In Washington, I’m Nancy Marshall Genzer for Marketplace.
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