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Tuesday, October 21, 2014         

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Most of state's stimulus jobs fall outside the private sector

By Sean Hao

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More than half of the jobs directly saved or created in Hawaii via federal stimulus spending continue to be in the government, rather than the private sector, according to data released yesterday.

There were 3,580 jobs pegged to the massive federal program during the second quarter. Fully 1,931 of the jobs were with state and local government, according to data released by Recovery.gov and the state.

When jobs indirectly saved or created are included, the stimulus program has created or saved 13,000 jobs since it began in the spring of 2009, according to previously released data from the White House Council of Economic Advisers.

Overall, about $341 million has been spent locally since the spring of 2009 on capital improvement projects, tax breaks, unemployment insurance and food stamps. During that period, total nonfarm jobs statewide were down from 599,000 in March 2009 to 593,000 at the end of June. Statewide jobs hit a peak of 627,000 in early 2008, according to the University of Hawaii Economic Research Organization.

Without the stimulus, the jobs picture could be much worse, said UH economist Byron Gangnes. The loss of 13,000 jobs today would equate to a roughly 2 percentage-point rise in the statewide jobless rate to about 8.5 percent, he said.

"We don't know where we'd be today if we didn't have those jobs," Gangnes said. "Should we have expected more? I don't think so.

"The program was never that big," Gangnes added. "You would have had to do a lot more tax cutting and more spending to get the economy back to full employment."

So far the state has been awarded $1.1 billion in stimulus money. Much of the stimulus money is paying for highways and bridges, transit systems, clean-water projects, public housing improvements and affordable housing.

According to Recovery.gov, a federal clearinghouse for stimulus data, the program directly saved or created 3,580 jobs in Hawaii during the second quarter of this year, which is up from the 2,566 jobs attributed to the program during the first quarter.

The data also indicate that economic activity spurred by the program remains concentrated in the government.

That's because much of the money is going to help support state and local government -- including preventing teacher layoffs. Other jobs are being created under newly implemented state energy efficiency and renewable energy programs.

Some of those jobs have relatively high pay. For example, the Department of Business, Economic Development and Tourism plans to add 20 new jobs with stimulus money. The agency would not disclose individual salary range of those jobs, but on average the new positions will pay nearly $71,000 apiece annually for three years.

Separately, the agency has purchased laptop computers and office furniture, and plans to spend $311,277 on travel as it manages $21.2 million in programs such as developing an undersea power cable and issuing electric vehicle-related grants.

DBEDT had initially planned to hire a $109,000-a-year energy portfolio manager with stimulus funds, however, the agency no longer plans to fill that position, said Ted Peck, DBEDT's energy administrator.

The agency needs to pay relatively high wages to attract qualified candidates, Peck said.

"Actually I've lost a lot of people because I couldn't pay them enough," he said.

The new jobs and other program expenses are expected to cost the state $5 million to $7 million a year if the state opts to continue the program once the stimulus money runs out.

There are still many significant stimulus efforts that have yet to start including renewable energy, broadband infrastructure and building construction and renovation projects, said Jennifer Sabas, U.S. Sen. Daniel K. Inouye's chief of staff in Honolulu.

"There's still big jobs that haven't really happened yet," she said. "I think we're comfortable with where we are (in terms of job creation).

"We were able to at least fill a gap so it wasn't worse."






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