OK, Michael Steele doesn't think that localities or the state have ever created ONE job. That's truly hilarious as my office gets calls all the time from unemployed laborers and craftsmen asking "Where can I apply for work?" once they hear there's a bid awarded for such and such project. When they get hired and make between $25 and $35 per hour, they're pretty happy campers and I'll see them at the job site and will always get a gregarious response to "How are you doing today?" Not one job?
But then again, Michael Steele tried to sell himself as a Democrat in Baltimore back when he was running for Senate in 2006 so I think he really knows better. I also think he's under investigation for violating campaign laws....And this man will lead the Republican Party? I'd say the Republicans have a problem. And Steele may be needing a job in 2010.
There's been a "serious" study as to the economic impact of public housing expenditures. Back when Republicans ruled the roost, the Council of Large Public Housing Authorities thought they had to get Republican consultants to gussy up the public housing image. One product was an economic impact study which has proven quite useful. You can find it here:
It is useful because I am sure our advocates used it to include public housing in the Recovery Act's list of "stimulus" programs: remember, $4 billion distributed to boost capital investment in public housing.
It basically argues that for every $1 of capital investment, $2 of economic benefit are "spun off" in the local economy.
New Bedford was one of the participating PHA's and we were charted at the lower end of the scale. I'm not sure I can agree to such a low multiplier. I recall URI fishery studies which suggested a $1:4 multiplier affect from our local and somewhat robust (depending on the species being caught) fishing industry, so I have to maintain a healthy skepticism about these "multipliers".
But you get the picture: when we spend, it resonates in the community. I personally approve payments to all manner of local vendors and on a monthly basis, there are tens to hundreds of thousands of dollars cumulatively spent on every imaginable item. We have well over 2000 items in our "stock" list and god knows how many local and regional vendors get some of the "action".
Looking at our monthly operational statements for just last month I can say that 109 vendors received $860,931.26 in expenditures for every manner of activity, from rags and rubber gloves to highly technical control parts and boiler components.
And when we spend capital dollars, it not only resonates in the community, but it is purposely designed to resonate as close to home as possible, as we maintain a "local labor" provision on any federal project over $250,000 in size.
By that we mean that 50% of EVERY trade needs to have labor from the locality (first defined as a metropolitan area and now more closely defined as the city, even though we enforce the metro area). We make provisions for allowing smaller firms to participate, and we allow them to have "key individuals" as superintendents and such, "outside" of the base from which the 50% is derived.
So we try to target the $1:2 impact as locally as we can while maintaining as much bid competition as we can muster.
After all, its our unemployed construction workers who've become part of a roving "basic" industry of construction trades who travel hither and yon in search of work. No matter where they work, the paycheck comes back to New Bedford.
So here's the scoop for 2008...we had $5,887,992 in operating expense directed at maintenance and another $ 8.5 million in capital (we're not even including Section 8 for the time being)...if you take 1:2 as the standard multiplier, we generated $28.8 million in local impact. If you look at the Census Bureau's Reports, New Bedford total economic output (2007) was $2,678,278,960...so public housing's contribution accounts for slightly more than 1% of total local economic output. Not an inconsequential sum.
But we started off talking about Michael Steele's remarkably misguided statement about "not one job" every created by the government. Just how many jobs are created per $100,000 of capital expenditure? It's rather easy (at least on the surface) to trace, as we have clerks who keep daily logs on things that happen at the job site, including the number of workers that are engaged in activities.
We've had a fairly robust $5 million interior renovation underway since the summer and its produced these jobs for reporting periods mentioned, along with the construction expenditures for the month listed:
Jobs in
(Month) Construction Expense
October 23 2008 26 jobs* $358,770 7.25
November 13, 2008 19 jobs $333,346 5.70
December 22, 2008 21 jobs $371,655 5.65
January 27, 2008 22 jobs $330,898 6.65
Summary Total 88 jobs $1,394,669 6.31
*carpenters, laborers,electricians, plumbers, plasterers, asbestos abaters, painters
We have shown a daily figure aligned with the monthly construction total to yield a number per $100,000 in capital investment. There are some problems with these measures, in that there's daily fluctuation of labor: we could be more accurate in tallying the daily job totals and adjusting for the number of 40 hour jobs per month before dividing by the $100,000 factor, but this is at least suggestive that approximately 6 jobs are created for every $100,000 spent.
We can make some general assumptions from this example as they relate to economic recovery. First, the annual appropriation for public housing operations, $4.5 billion will reverberate throughout local economies to the estimated amount of some $9 billion. While these operational funds aren't "new" stimulation to the economy, they maintain an existing web of services that employ tens of thousands of local vendors throughout the nation. And the introduction of an additional $5 billion of capital expenditure over and above the $2.5 billion already appropriated should generate approximately 450,000 jobs over the three year life of capital spending...or approximately 150,000 jobs per year. Certainly not enough to fuel an entire recovery, but not insignificant in light of the over 5,000,000 unemployed created since the financial meltdown.
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