Is Federal Stimulus Money Being Used for IT Hardware, Not Hiring?
Congress allocated $787 billion earlier this year in a stimulus package President Obama signed in an effort to jump-start the economy. So where are the IT jobs?
Mon, November 23, 2009
Computerworld — WASHINGTON -- As part of the economic recovery plan passed by Congress and signed into law earlier this year by President Obama, government agencies, private companies and non-profits are required to report the number of jobs created or saved by the stimulus package. Those job numbers are now available at Recovery.gov , and a sampling of them indicates that the money spent so far has been better for hardware than hiring.
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Among the technology companies getting money from federal stimulus spending is Computer Sciences Corp. (CSC), which won two IT projects at NASA that total nearly $10 million. But no jobs are being created with that money.
CDW Government Inc. received two contracts, one for $2.4 million and another for $3.9 million, both for computer equipment and services at the U.S. Department of State. On both contracts, CDW said the "cumulative effect" of the awards resulted in four retained jobs, such as account managers, field account executives, advanced technology account executives, sales specialists and sales management "as CDW-G is primarily staffed with these types of positions."
Oracle Corp. was awarded $1.25 million for "custom computer programming services" for the Social Security Administration, but that project created no new jobs. Oracle declined to comment.
IBM was also awarded a Social Security Administration contract -- this one worth about $8.5 million -- to upgrade systems around the country. IBM put the number of jobs created or saved at 16.8.
In total, these projects represent about $26 million in federal spending and account for about 21 jobs either created or saved. The paucity of job creation seen to date, given the hundreds of billions of dollars allocated for the ailing economy, has raised questions about how well the stimulus package is working. Critics have argued that more needs to be done, given the nation's 10.2% unemployment rate, and even Obama himself is now planning a jobs summit next month.
But stimulus backers have countered that direct hiring is only one piece of the employment puzzle. To get a complete picture, the government says the job estimates need to include indirect jobs, which could be subcontractors, equipment orders, even money spent on restaurants and travel in support of the work.
The federal government estimates that for every $92,000 spent by the U.S. one job is created or saved, although that figure covers all occupations, including highly paid ones. The U.S. claims the stimulus money has created an estimated 640,000 jobs.
