Thursday, November 12, 2009
Tweet[IWS] CRS: JOB LOSS & INFRASTRUCTURE JOB CREATION SPENDING DURING THE RECESSION [2 October 2009]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Job Loss and Infrastructure Job Creation Spending During the Recession
Linda Levine, Specialist in Labor Economics
October 2, 2009
http://opencrs.com/document/R40080/2009-10-02/download/1013/
[full-text, 16 pages]
Summary
After the long economic expansion that characterized much of the current decade, the nation
entered its eleventh postwar recession in December 2007. The unemployment rate, which is a
lagging economic indicator, did not start to rise until May 2008 when it jumped 0.5 percentage
points to 5.5%. By December 2008, the unemployment rate exceeded 7.0% and well over
600,000 jobs were lost—the biggest monthly decrease since December 1974, when another deep
recession was taking place. These labor market indicators and comments equating the latest
recession to the Great Depression intensified congressional interest in passage of legislation early
in 2009 aimed at encouraging creation of new jobs and warding off further loss of jobs. (See CRS
Report R40655, The Labor Market During the Great Depression and the Current Recession.)
To mitigate all but one recession since the 1960s, Congress chose to increase federal spending on
infrastructure. (See CRS Report 92-939, Countercyclical Job Creation Programs.) But, there are
a number of issues associated with using expenditures on public works to quickly create jobs in
times of recession. (See CRS Report R40107, The Role of Public Works Infrastructure in
Economic Stimulus.)
Public works expenditures traditionally have gone chiefly to construction activities (e.g., building
highways and bridges, dams and flood control structures) which indirectly increase demand in
industries that supply their products to construction firms (e.g., manufacturing). Today, the
definition of infrastructure has been expanded to include green jobs, which include those in
industries that utilize renewable resources (e.g., electricity generated by wind), produce energyefficient
goods and services (e.g., mass transit), and install energy-conserving products (e.g.,
retrofitting buildings with thermal-pane windows).
A question that typically arises during congressional consideration of economic stimulus
legislation is which approach produces the most bang for the buck. In the instant case, this means
how many jobs might be supported by federal expenditures on traditional and green infrastructure
projects. Once stimulus legislation is signed into law, the focus of Congress customarily turns to
estimates of the number of jobs that result as federal funds are allocated to specific activities.
Therefore, after briefly examining the trend in employment and unemployment since the
recession's onset, the report turns to an in-depth look at estimates of job creation, including the
limitations of the methodology often used to derive them and the difficulties associated with
developing job estimates for green infrastructure in particular. The report closes with a review of
what is known to date about the number of jobs supported by infrastructure spending among other
provisions in the American Recovery and Reinvestment Act (ARRA, P.L. 111-5). Section 1512
requires entities that receive ARRA appropriations from federal agencies, totaling approximately
$271 billion, to include in quarterly reports the number of jobs created or maintained as a result.
Section 1513 requires the Council of Economic Advisors to report quarterly on the effect of
ARRA provisions on employment and other economic indicators.
Contents
Employment and Unemployment Through Job Loss....................................................................1
Infrastructure Spending and Job Creation Estimates ....................................................................4
Job Creation Estimates: What Are They?...............................................................................5
Some Caveats .................................................................................................................6
The Multiplier Effect.......................................................................................................6
Job Estimates and Construction Spending .............................................................................7
The Federal Highway Administration..............................................................................7
BLS Employment Requirements Table............................................................................8
BEA's Regional Input-Output Modeling System (RIMS II) .............................................9
Job Estimates and Green Infrastructure Spending ................................................................10
Measuring Jobs Supported by Spending Provisions in the American Recovery and
Reinvestment Act ...................................................................................................................12
Tables
Table 1. Payroll Jobs at Nonfarm Employers ...............................................................................2
Table 2. Number of Payroll Jobs by Industry ...............................................................................3
Table 3. Number of Direct and Indirect Jobs by State Dependent on an Expenditure of $1 Billion in the Construction Industry......9
Contacts
Author Contact Information ......................................................................................................13
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Job Loss and Infrastructure Job Creation Spending During the Recession
Linda Levine, Specialist in Labor Economics
October 2, 2009
http://opencrs.com/document/R40080/2009-10-02/download/1013/
[full-text, 16 pages]
Summary
After the long economic expansion that characterized much of the current decade, the nation
entered its eleventh postwar recession in December 2007. The unemployment rate, which is a
lagging economic indicator, did not start to rise until May 2008 when it jumped 0.5 percentage
points to 5.5%. By December 2008, the unemployment rate exceeded 7.0% and well over
600,000 jobs were lost—the biggest monthly decrease since December 1974, when another deep
recession was taking place. These labor market indicators and comments equating the latest
recession to the Great Depression intensified congressional interest in passage of legislation early
in 2009 aimed at encouraging creation of new jobs and warding off further loss of jobs. (See CRS
Report R40655, The Labor Market During the Great Depression and the Current Recession.)
To mitigate all but one recession since the 1960s, Congress chose to increase federal spending on
infrastructure. (See CRS Report 92-939, Countercyclical Job Creation Programs.) But, there are
a number of issues associated with using expenditures on public works to quickly create jobs in
times of recession. (See CRS Report R40107, The Role of Public Works Infrastructure in
Economic Stimulus.)
Public works expenditures traditionally have gone chiefly to construction activities (e.g., building
highways and bridges, dams and flood control structures) which indirectly increase demand in
industries that supply their products to construction firms (e.g., manufacturing). Today, the
definition of infrastructure has been expanded to include green jobs, which include those in
industries that utilize renewable resources (e.g., electricity generated by wind), produce energyefficient
goods and services (e.g., mass transit), and install energy-conserving products (e.g.,
retrofitting buildings with thermal-pane windows).
A question that typically arises during congressional consideration of economic stimulus
legislation is which approach produces the most bang for the buck. In the instant case, this means
how many jobs might be supported by federal expenditures on traditional and green infrastructure
projects. Once stimulus legislation is signed into law, the focus of Congress customarily turns to
estimates of the number of jobs that result as federal funds are allocated to specific activities.
Therefore, after briefly examining the trend in employment and unemployment since the
recession's onset, the report turns to an in-depth look at estimates of job creation, including the
limitations of the methodology often used to derive them and the difficulties associated with
developing job estimates for green infrastructure in particular. The report closes with a review of
what is known to date about the number of jobs supported by infrastructure spending among other
provisions in the American Recovery and Reinvestment Act (ARRA, P.L. 111-5). Section 1512
requires entities that receive ARRA appropriations from federal agencies, totaling approximately
$271 billion, to include in quarterly reports the number of jobs created or maintained as a result.
Section 1513 requires the Council of Economic Advisors to report quarterly on the effect of
ARRA provisions on employment and other economic indicators.
Contents
Employment and Unemployment Through Job Loss....................................................................1
Infrastructure Spending and Job Creation Estimates ....................................................................4
Job Creation Estimates: What Are They?...............................................................................5
Some Caveats .................................................................................................................6
The Multiplier Effect.......................................................................................................6
Job Estimates and Construction Spending .............................................................................7
The Federal Highway Administration..............................................................................7
BLS Employment Requirements Table............................................................................8
BEA's Regional Input-Output Modeling System (RIMS II) .............................................9
Job Estimates and Green Infrastructure Spending ................................................................10
Measuring Jobs Supported by Spending Provisions in the American Recovery and
Reinvestment Act ...................................................................................................................12
Tables
Table 1. Payroll Jobs at Nonfarm Employers ...............................................................................2
Table 2. Number of Payroll Jobs by Industry ...............................................................................3
Table 3. Number of Direct and Indirect Jobs by State Dependent on an Expenditure of $1 Billion in the Construction Industry......9
Contacts
Author Contact Information ......................................................................................................13
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 4:06 PM
