This is yet another example of why it’s tough to calculate the actual job-stimulating benefits of the stimulus plan. The Recovery Act’s success is typically measured by looking at how many jobs have been created. But there’s also job “shifting,” which happens when a business uses stimulus funds to hire someone who was already employed at another company. And according to a new study from George Mason University’s Mercatus Center, that’s been the case with nearly half of the workers hired under the Recovery Act:
Hiring isn’t the same as net job creation. In our survey, just 42.1 percent of the workers hired at ARRA-receiving organizations after January 31, 2009, were unemployed at the time they were hired (Appendix C). More were hired directly from other organizations (47.3 percent of post-ARRA workers), while a handful came from school (6.5 percent) or from outside the labor force (4.1 percent)(Figure 2). Thus, there was an almost even split between “job creating” and “job switching.” This suggests just how hard it is for Keynesian job creation to work in a modern, expertise-based economy: even in a weak economy, organizations hired the employed about as often as the unemployed.