Center for American Progress Action

WONK ROOM: Conservatives Peddle Myth That Stimulus Spends $275,000 For Every Job Created
Press Release

WONK ROOM: Conservatives Peddle Myth That Stimulus Spends $275,000 For Every Job Created

Conservatives Peddle Myth That Stimulus Spends $275,000 For Every Job Created

WASHINGTON DC—In staking out their opposition to the economic recovery package, conservatives have been peddling a variety of myths. One of their favorites is that taxpayers will pay $275,000 for every new job:

Rep. John Boehner (R-OH): All told, the plan would spend a whopping $275,000 in taxpayer dollars for every new job it aims to create, saddling each and every household with $6,700 in additional debt.

Rep. Jerry Lewis (R-CA): [T]his bill will spend a shocking $275,000 for each new job created (assuming they actually materialize). Even worse, this calculation is only a partial measure of cost…It is more than likely the private sector could have created more than one job for $275,000 – especially considering the average U.S. household income is around $45,000.

Today, Paul Krugman broke down this “bogus talking point“:

[I]t involves taking the cost of a plan that will extend over several years, creating millions of jobs each year, and dividing it by the jobs created in just one of those years. It’s as if an opponent of the school lunch program were to take an estimate of the cost of that program over the next five years, then divide it by the number of lunches provided in just one of those years, and assert that the program was hugely wasteful, because it cost $13 per lunch.

Joe Klein called the number “phony-baloney propaganda,” while Dean Baker noted that “the media have been typically derelict in simply reporting this number without making any assessment to evaluate it.”

As Scott Lilly pointed out, the actual cost per job is closer to $50,000, without taking into account the “substantial number of additional jobs [created] beyond 2012.” And even if the conservatives’ number was anywhere close to accurate, their proposed job creation program — tax cuts — would cost more than three times as much per job. As Christian Weller and John Halpin found, “even under the most optimistic assumptions about the relationship between tax cuts and jobs,” President Bush’s 2001 tax cut cost $871,000 for every job created.

Of course, the recovery package is meant do a lot more than create jobs. It will also spark economic activity, which means the jobs won’t simply disappear when the stimulus runs out. And it will invest in education, health care, and infrastructure, raising our standard of living for years to come. To act as if the package is solely about job creation — when it also has to fill the economy’s “output gap” — is disingenuous.