Accounting for jobs in the stimulus cash

by NATHAN NEWMAN and GORDON LAFER
published in The Oregonian
March 20, 2009

In order to comply with new transparency requirements under the American Recovery and Reinvestment Act, state governments across the country are scrambling to report to the public how they spend recovery dollars. Unfortunately, no existing state government Web sites that are accounting for the recovery funds report the number of jobs created by private contractors. Without such data, the sites are close to meaningless.

Fortunately, Oregon is leading an effort to require contractors to report the number of jobs they create, as well as the hours worked and wages received by their employees. These proposed requirements would ensure Oregonians' tax money actually goes toward creating quality jobs.

The benefits are clear. If contractors are creating quality jobs, they should get more public funds. If they aren't, the state can stop funding them and target resources to those programs that are succeeding at job creation. Such standards will make Oregon a model state in terms of the criteria for receiving federal stimulus funds, since all state governments must report quarterly on the number of jobs created by contractors under the recovery act.

Such accountability is clearly demanded by the public.

In a January poll by Lake Research Partners, 76 percent of Americans said they considered it "extremely important" or "very important" that state governments track "what companies and government agencies are getting funds, for what purposes, and the number and quality of jobs being created."

The need for such standards has never been more urgent, since public work -- in states across the country -- has increasingly been outsourced to private contractors, often resulting in waste and misuse of taxpayer dollars.

In 2006, for instance, mismanagement by private contractor Accenture caused 30,000 children to drop off the rolls of Texas' Children's Health Insurance Program, while in Massachusetts, outsourcing of oversight of the "Big Dig" construction project to Bechtel resulted in millions of wasted taxpayer dollars.

Here in Oregon, the Department of Administrative Services estimates that the state spent more than $4 billion on private contracts in just the past 22 months, with about 40 percent of Multnomah County's budget going toward private contracts. With such colossal failures piling up in other states, Oregonians must be sure they are receiving quality service and quality jobs in exchange for the huge sums provided to contractors.

As they move to direct more than $6.48 billion in recovery funds toward "shovel-ready" projects in the next few months, Oregon lawmakers have a rare opportunity to make a huge difference in the state's economy, at a time when it is desperately needed. By insisting that contractors have the same accountability as government agencies, lawmakers can put measures in place to ensure that money goes into the hands of the hardworking families who have been hardest hit by the recession.

If Oregon legislators pass the proposed provisions, they will have safeguarded the interests of all Oregonians, and made the state a model for the country as a whole

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Nathan Newman is interim executive director of the Progressive States Network. Gordon Lafer is a professor at the University of Oregon's Labor Education and Research Center.