President Obama has repeatedly proclaimed that the stimulus package he signed into law will save or create 3.5 million jobs nationwide. But even if these numbers are realistic, will that have a significant impact as national unemployment approaches the double digits—challenging the post-Depression record of 10.8 percent set in 1982?
Our friends at mint.com asked that question and answered it by analyzing the White House’s “Job Impact by Congressional District” to determine the total number of jobs to be created and then comparing it to the number of unemployed persons in each state. The result is a hypothetical percentage of each state’s unemployment that will be resolved by the stimulus. Of course, that assumes that the White House isn’t overestimating the new job totals at all.
Those that stand to benefit most are some traditionally red states with small total populations. North Dakota, South Dakota, Nebraska, and Utah will all hypothetically see over 60 per cent of their unemployment erased by the stimulus spending. Wyoming ends up as the biggest winner with 87 percent of the over 9,000 unemployment citizens hypothetically getting jobs due to the federal spending.
Sounds like good news for those states, but these states have also weathered the recession better than their larger neighbors and are among the states with the lowest unemployment. Preliminary data for March 2009 shows that Wyoming has an unemployment rate of just 4.5 percent, with the other four states ranging from 4.2 to 5.2 percent. If these numbers really do play out, we’ll see those rates drop down to less than two percent, which is widely considered virtually full employment.
But how do the states that are in dire straits fare? California, South Carolina, and Rhode Island are all facing unemployment of greater than ten percent (based on preliminary data for March 2009). Mint.com calculates that these three states will hypothetically see just a 23-27 percent reduction in their unemployment due to the stimulus spending, bringing their unemployment rates down to near seven percent.
These calculations do not consider upcoming layoffs. While it is impossible to predict the exact unemployment rate, it has been rising by 0.4-0.5 percent per month. Also, keep in mind that the “official” unemployment rate does not include workers who have gone from full-time to part-time work, or those who have stopped actively looking for work. Some experts estimate the “real” unemployment rate to be 17.5 percent or higher.
Chart courtesy of mint.com, used with permission.
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