"In the three months before the act took effect, America lost 750,000 jobs a month. In the last three months, we've lost about 35,000 jobs a month."
Joe Biden on Wednesday, February 17th, 2010 in an op-ed in 'USA Today'
Biden says job losses have fallen from 750,000 per month to 35,000 per month
The stimulus bill is one year old. To celebrate its anniversary, administration officials are touting its successes.
Vice President Joe Biden is among those talking up the bill. In a USA Today op-ed, he wrote that the success of the stimulus legislation, formally known as the American Recovery and Reinvestment Act, can be measured by the number of jobs it has created.
"We think the Recovery Act is working because of the progress we've made in slowing job loss," Biden wrote on Feb. 17, 2010, exactly a year since the stimulus bill was signed by President Barack Obama. "In the three months before the act took effect, America lost 750,000 jobs a month. In the last three months, we've lost about 35,000 jobs a month. That's progress — not good enough, not where we need to be, but progress. And most economists agree that that progress is thanks in a very large part to the Recovery Act."
For this item, we'll focus on whether Biden is correct that America lost 750,000 jobs a month before the stimulus bill went into effect and only 35,000 a month in the last three months.
Jay Carney, Biden's communications director, said that the numbers cited in the op-ed came from monthly job losses reported by the Bureau of Labor Statistics in January, February and March of 2009, as well as the last three months. On average, the economy lost about 752,000 jobs per month in the first three months of 2009, which is close to the 750,000 that Biden wrote in his op-ed.
But Biden specifically wrote that job losses averaged that amount "in the three months before the act took effect," which was officially Feb. 17, 2009, the day the bill was signed. So, that time frame includes November and December of 2008, and January 2009. For that time period, the average was about 726,000 jobs.
So, when it comes to job loss averages in the months before the stimulus bill officially went into effect, Biden is off by about 26,000 jobs. Carney said that the stimulus bill had very little effect on the economy until April 2009, so that's why they included March in their calculations.
Next, we turned to average job losses for the last three months. The Bureau of Labor Statistics has not published data for February yet, so we focused on November and December of 2009, and January 2010. In this case, Biden is spot on: The average number of job losses over the last three months has been about 35,000.
Whether the stimulus is entirely responsible for slowing job losses is a matter of opinion, and the subject of heated debate between conservative and liberal economists.
Brian Riedl, a budget expert with the conservative Heritage Foundation, said that knowing whether the bill has helped stem job losses requires knowing how the economy would have performed had the stimulus bill never been put into law. He argues that the economy may have actually lost jobs as a result of the stimulus bill. For every job that's created through government spending, the government has to take money away from another part of the economy, which can produce job losses, he said.
"At best, it's a zero-sum game."
Jim Horney, director of federal fiscal policy at the left-leaning Center on Budget and Policy Priorities, says that it's difficult to say exactly how many jobs have been created by the stimulus.
"You can't look at a job and say, 'This job would not have been here without the stimulus.'"
But you can measure the stimulus bill's impact on employment by looking at aggregate demand, Horney added. People have been buying more groceries, clothes and other goods, which indicates a stabilizing job market.
So, back to Biden's claim. He said that job losses averaged about 750,000 in the three months before the stimulus bill went into effect. Including job loss statistics for the month of March 2009, Biden is correct. But the bill was signed Feb. 17, 2009, and officially went into effect that day. And using that measure — November and December of 2008, and January 2009 — Biden is off by about 26,000 jobs. Biden also said that job losses averaged about 35,000 for November and December 2009, and January of 2010, which is also correct. Because Biden is not quite right on the first part of his statement, we'll knock him down a point. As a result, we find his claim to be Mostly True.