Despite Surge in Unemployment, White House Says Economic Stimulus ‘Saved or Created’ 250,000 Jobs

By Fred Lucas | October 19, 2009 | 6:55 PM EDT

In this March 5, 2009 file photo, job seekers join a line of hundreds of people at a job fair sponsored by in New York. Even with an economic revival, many U.S. jobs lost during the recession may be gone forever and a weak employment market could linger for years. (AP Photo/Mark Lennihan, file)

( – The stimulus is working, a White House economic adviser declared on Monday, citing a new report that 250,000 education jobs were “saved or created.” This news, however, comes at a time of 9.8 percent unemployment and 21 straight months of job losses nationwide.

It is difficult to say how many jobs were “saved” and how many were “created” by the $67 billion in stimulus education grants, said Jared Bernstein, executive director of the White House’s Middle Class Task Force and chief economist for Vice President Joe Biden. He also did not know how many jobs were teaching jobs or other public school staff positions.

“These are jobs directly created or saved through spending, through the recovery act,” Bernstein told reporters at the daily White House press briefing. “Layoffs were avoided in this case.”

The White House report, “Educational Impact of the American Recovery and Reinvestment Act,” covers the period from Feb. 17, when President Barack Obama signed the $787 billion stimulus bill into law, through Sept. 30, 2009.

“Saving and generating jobs for teachers has had clear effects in the classroom,” according to the report.  “As local school districts are faced with budget shortfalls in a slowing economy, the number of teachers employed may decline. … However, the need to educate students does not decrease. Fewer teacher jobs, without fewer students, may lead to larger and often unacceptable class sizes.”

“Faced with these circumstances, some school districts have chosen to use ARRA funds to avert such class size expansion,” the report states. “For example, reports indicate that Peoria, IL used ARRA funding to focus on increasing the number of teaching positions and reducing class sizes in kindergarten, and at the first- and second-grade levels. At the Rothschild Middle School in Columbus, GA, the principal was able to use ARRA funds to hire more math teachers to deliver individualized attention to students through smaller classes.”

Still, a total of 15 million people are unemployed and 2.6 million lost their jobs since the recovery bill was enacted, according to the Bureau of Labor Statistics. Moreover, the unemployment rate could have exceeded double digits had it not been for 571,000 discouraged jobs seekers that dropped out of the work force entirely in September and were therefore not included in the unemployment statistics, according to the Associated Press.

At best, the stimulus has had a net zero effect on the economy, said Brian Reidl, senior federal budget analyst for the conservative Heritage Foundation.

“Of course when the government spends money, some of those dollars will go to hire and employ people,” Reidl told

“But that came from money that was taxed or borrowed out of the economy, so fewer people are employed in the private sector,” he said. “This is killing as many jobs as it’s creating. It’s why government stimulus programs didn’t work in the Great Depression and why they didn’t work in Japan in the 1990s.”

Vice President Joe Biden speaks about the economy and the American Recovery and Reinvestment Act (stimulus law) on Thursday, Sept. 3, 2009, at the Brookings Institution in Washington. (AP Photo/Charles Dharapak)

Still, in the face of mounting job losses, Bernstein thinks the recent gains in public school jobs indicate that the stimulus is “on track” to saving or creating 3 million to 4 million jobs.

It is not the first time the White House has praised the economic stimulus act in the face of high unemployment figures. On Sept. 24, Vice President Joe Biden said, “In my wildest dreams, I never thought [the stimulus] would work this well.”

Bernstein deferred the distinction to the states as to whether the jobs were new or jobs that were simply maintained.

“We don’t have a breakdown of jobs created and jobs saved,” he said.

While the 250,000 jobs came directly from stimulus dollars, Bernstein contends that about 1 million jobs have been saved, both directly and indirectly, through stimulus spending.

“Indirect jobs are created when the teachers who are not laid off go shopping and spend money they otherwise wouldn’t have,” Bernstein said.