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The Suburbanite
  • Stimulus in Stark: Money creates jobs, but unemployment still high

  • Though the stimulus bill that Congress passed more a year ago has created and saved hundreds to thousands of jobs, Stark County’s unemployment rate is the worst in decades. Critics say the American Recovery and Reinvestment Act is a failure that put the nation deeper into debt. Its supporters say it prevented a second Great Depression and higher unemployment and many of its benefits have not yet been realized.

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  • Gail Repp and Linda Clark have lost their jobs. Both Stark County residents voted for President Barack Obama. And they disagree today on whether the president’s $787 billion stimulus bill has and will stem joblessness.
    Repp says the American Recovery and Reinvestment Act that Obama signed into law a year ago hasn’t done what she expected.
    The 54-year-old Perry Township woman recently was let go from her seasonal job at Harry London Chocolates. Her husband, a longtime Hoover worker, was laid off from the Timken Co. in March and was out of work. And Stark County’s unemployment rate had more than doubled in two years to 12.2 percent in December.
    “The Recovery Act ... it’s not doing anything for the economy,” Repp said. “I just don’t feel (Obama’s) doing anything. It’s getting worse.”
    She said the stimulus bill has increased the national debt while creating only temporary jobs.
     
    Chart: Civilian labor force estimates for Stark County
    “It’s going to last for a couple of years, and where are those people going to be — unemployed,” Repp lamented. “I don’t want to be a Third World country.”
    Clark, 38, of Canton, is a former Obama campaign volunteer with a psychology degree. She had found only one short-term job with the U.S. Census since she was let go from a nonprofit in July 2008. Her unemployment benefits are about two months from running out.
    While she hasn’t seen any signs yet the Recovery Act is creating jobs, the single mother of two teens believes it gradually will revive the local economy.
    “I didn’t expect an overnight fix like some people I know,” Clark said. “It’s only been a year. It took (President) Bush so many years to screw things up.”
    A year after the Recovery Act became law and with congressional elections being held later this year, people are debating whether the stimulus bill was worth the high cost, and how much job growth, if any, has occurred. It doesn’t help that it’s difficult to measure results so far.
    INCOMPLETE JOB COUNT
    A preliminary look at the county’s more than $116 million in stimulus projects appears to show that the act created or saved more than 600 confirmed jobs in the county, with many being in the education, construction, law enforcement and nonprofit sectors.
    But that count is incomplete due to the following factors:
    • There are a large number of recipients; not all could be reached; and the federal government’s list is not frequently updated.
     
    • Many of the jobs are not full time, so some recipients had not calculated how many jobs they have created or retained. For example, Mount Union College got nearly $52,000 in stimulus funds to help pay salaries of students working on-campus in the federal work-study program. But the number of work hours can vary by student, and the stimulus portion is only part of the $297,000 that funds Mount Union’s program.
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    • Several employers are counting employees paid by stimulus funds as stimulus-funded jobs, even though the employees’ jobs may not have been at risk. Often, employers say they don’t know how many people they would have laid off without the grants. The Lake Local School District is using some of its $1.8 million in stimulus cash to pay 17 employees. Treasurer Bob Moffat said the district would have paid them out of its reserve funds without stimulus money. Yet the federal government counts the Lake employees in its job numbers.
     
    • An unknown number of jobs in the county have been or will be created due to other elements of the stimulus package. Local stimulus projects, employees who kept their jobs or were hired due to the legislation and those who benefited from tax cuts and assistance programs have purchased goods and services from local companies. Stimulus projects based outside the county may have bought goods and services from Stark County companies and hired Stark County residents.
    Whatever the job creation, many agencies focused their stimulus funds on preventing layoffs rather than hiring. For example, Canton used its stimulus grant to keep eight police officers on the job.
    And while the Alliance City School District did use part of its stimulus grants totaling about $2.2 million to hire 10 people, including tutors, a teacher’s aide and program directors, the district spent $993,000 from another Recovery Act grant to prevent the layoffs of 13 teachers.
    Meanwhile its neighbor, the Marlington Local School District, sought to minimize any hiring because most of the stimulus funding will begin to expire next year.
    Marlington used some of its $1.5 million in stimulus grants to fund half the salary of a sheriff’s deputy, hired two kindergarten teachers and prevented at least two teachers from being laid off. Much of the money went to buy a bus, computers, furniture, contracted therapists, supplies and teacher training, district Treasurer Sandra Moeglin said.
    “We did not want to hire people only for two years,” she said.
    While most of the created jobs are temporary, Jared Bernstein, chief economic adviser to Vice President Joe Biden, said about 15 percent of the Recovery Act money funds investments in emerging sectors such as energy efficiency and high-speed rail that will start bolstering the economy when the funding expires.
    FIERCE DEBATE
    While recipients are glad they got the money, James Slepian, a spokesman for Jim Renacci, a Republican running for Congress in the 16th District, said the Recovery Act hasn’t created enough jobs, relies on “government handouts” and should have had more tax cuts.
    “To (say) this stimulus package is working is laughable,” said Slepian, adding that U.S. Rep. John Boccieri, D-Alliance, “voted for a stimulus package that hasn’t stimulated anything other than a deficit.”
    Page 3 of 3 - “We brought the economy from the brink of a great depression,” Boccieri said.
    He added that much of the job losses occurred before the act was passed and pointed to government figures that say the U.S. economy grew robustly in the last quarter. He said the Recovery Act contained the largest amount of tax reduction ever, except it wasn’t targeted just for the wealthy.
    Julia Frankland, an associate professor of business administration at Malone University, says expectations of a quick return to normal employment were unrealistic. She believes unemployment would have been worse without the act.
    “It stops the downward slide,” Frankland said. “It’s just enough to get you stabilized so you can start climbing back again.”
    Bernstein said most economists agree that “in the absence of the Recovery Act, the economy would have taken a longer time to recover ... the unemployment rate would have been higher than it is, and we’d still be losing jobs at a faster rate.”
    But he added the Federal government will have to deploy other tools to reverse the high rates of joblessness further.
    “It’s equally true there is more to be done,” Bernstein said. “I can’t expect any American living in a county with something like 12 percent unemployment to stand up and clap because things would have been worse without the act.”