Analysis: What has the stimulus package done for San Diego?

It has been nearly two and a half years since the Obama Administration offered up its $787 billion stimulus package to boost the economy.

But what has it done for San Diego?

In some ways it has helped our local economy, but it hasn't done nearly what it was advertised to do for San Diego, or the rest of the country.

San Diego, through contracts, grants and loans, received $2.5 billion in stimulus money, but all of those dollars created only 1,978 jobs as of last March.

“So that calculates out to $1.2 million – $1.25 million per job created in San Diego, which is twice as expensive as for California, it was $676,000 per job,” said economist Kelly Cunningham of National University .

According to a report from White House economists last Friday, the stimulus saved or created 2.4 million jobs, which the Weekly Standard calculated the cost per job to be $278,000.

To Cunningham, this is not money well spent.

“I don't mean to be too critical because we need as many jobs as we can get, but that seems not to be a very efficient way of creating jobs,” Cunningham said.

The Weekly Standard article said if the government had given a $100,000 check to everyone who was supposed to have gotten a job through stimulus, the taxpayers could have saved $427 billion.

As for San Diego, the bulk of the stimulus money was in the form of grants for research and development, which are good, high paying jobs.

“Some of these jobs will be able to spawn off new industries, that was the hope in the beginning that the stimulus would create and sustain itself going forward,” Cunningham said.

San Diego lost 105,000 jobs in this recession. And while the stimulus research dollars provided some immediate jobs, the research will create new products and companies, and in turn create more jobs, but that's down the road.

“So, has it been the most efficient way of doing it? I'm not so sure about that.  Seems like an awful lot of money spent… for not creating that many jobs,” Cunningham said.

The recovery continues to be slow, and job growth remains anemic. We'll get the June unemployment report in a few weeks.

“I think for San Diego we'll see it over 10% again.  It got below (10%) as of May, but when June is reported, I think it will be well over 10% again,” said Cunningham.

Cunningham thinks it will take a decade or more for the unemployment rate to drop to what we consider as normal, about 5%.

Categories: KUSI