Some stimulus recipients say job numbers don't add up

JoLynn Johnson
JoLynn Johnson, owner of Crystal Kitchen Center, received $35,000 in federal stimulus money, but is credited with saving eight jobs.
MPR Photo / Mark Zdechlik

Some Minnesota recipients of federal stimulus money say the White House has overstated the number of jobs the program has impacted.

The White House said Friday that American Recovery and Reinvestment Act spending through September has directly saved or created nearly 650,000 jobs nationally, and more than 14,300 jobs in Minnesota.

The Obama administration has promised this new, more comprehensive round of stimulus data will be far more reliable than numbers released earlier this month. An Associated Press analysis of the earlier data concluded one in every six jobs federal officials claimed were created or saved, did not exist.

But a check of recipients around the state finds that the new numbers may not be reliable, either.

The Open Door Health Center in Mankato, for instance, added 10 new positions, but is listed in the federal report as having created or saved 18.5 jobs -- the total employment of the clinic.

Another stimulus funding recipient in Minnesota - Crystal Kitchen Center in suburban Minneapolis - got a lot of attention last month when the head of the Small Business Administration paid a visit to the upscale remodeling company to tout stimulus spending.

According to the Small Business Administration, a $35,000 loan to the Crystal Kitchen Center saved eight jobs. But the company hasn't had nearly that many employees since last year, long before the stimulus bill was passed.

"So in December we were seven people and right now we're four," said JoLynn Johnson, the center's owner.

Johnson, who has owned the Crystal Kitchen Center for 15 years, said she's delighted she got the stimulus funded loan. It's covering several months of mortgage payments on her relatively new office and showroom space.

That said, Johnson says her business would not have folded without the money.

"I wouldn't have gone under, you know -- the $35,000 is not going to make or break Crystal Kitchen Center," she said. "But it certainly is helpful."

Johnson also says it's way too early to say whether the stimulus loan did anything for employment at her business. The money didn't even come until last month.

"If you came back in four months, in five months and asked me that question, I could answer that better," she said. "So it's too early for me to say that it developed a job, it created a job, it saved a job."

The Obama administration has a lot riding on the success or failure of the $787 billion stimulus program. The president set a goal of saving or creating 3.5 million jobs by the end of next year, and the administration says the new numbers show it's on track to meet that goal.

State economist Tom Stinson says he's not surprised cases of inflated job numbers are surfacing. He says the White House is in a difficult position trying to count every job created by the stimulus spending.

Stinson says it's clear that the stimulus is working and that the nation and Minnesota would be in much worse shape without it.

"When historians look back on what went on in 2008 and 2009 they are going to say that the stimulus package was a success, that the pieces of it worked and that without it, things would have been a lot worse than they were," he said. "And they were bad enough with the stimulus."

Sarah Kruse, who runs the Open Door Health Center, said that without the $1.3 million of stimulus money, she would have been cutting services. Instead, the clinic, which provides health care for low-income people, is expanding.

Kruse said the center's new hires include a dentist, a dental hygienist, social workers, and a community health worker.

"It's helping us stabilize and expand some programs, particularly at a time when our economy is so tough right now," she said.

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