One of the features of fiscal policy initiatives is that they can be
targeted to industries and geographic areas in greatest need. The
American Recovery and Reinvestment Act (the stimulus plan) is aimed
at construction, energy alternatives, health care, education, and a
number of infrastructure categories thought to not only create jobs but
build a foundation for future growth. These industries have been listed
in some detail in the actual wording of the Act.
However, the geographic targeting is less precise. Since a key
objective of the stimulus plan is to preserve and create jobs, initial
estimates have been provided by the administration in Washington
showing the number of jobs expected by each state through 2010 (see
The initial estimates are sure to be refined, and as funds are
distributed under the Act, it is likely that the employment effects
will differ from the initial estimates now available.
The table (see Western Blue Chip)
sets out the employment growth expected from the stimulus plan, and
provides a comparison with jobs lost in each Western state from
December 2007, when the recession began, to January 2009 (data are
As an approximation, each state's share of jobs from the stimulus
plan is similar to the state's share of population and overall national
employment. Thus, Arizona is slated to receive 1.9 percent of all 3.6
million stimulus jobs, similar to the state's share of employment.
However, as may be seen from the table, Arizona accounts for 4.5
percent of all 3.7 million jobs lost in the nation between December
2007 and January 2009.
Moreover, the table shows that Arizona is already behind the
curve, in that the jobs to be stimulated through 2010 by the Act
(70,000) are eclipsed by the actual jobs lost in the recession to date
(166,700). Other states in a similar jobs deficit are Idaho, Oregon,
Nevada, and especially California. In California, 541,200 jobs have
been lost so far in the recession, or 14.5 percent of the national
total, but the Golden State is estimated to receive 11.0 percent of
Several other Western states seem to be on track to receive
disproportionately larger shares of stimulus jobs compared to actual
job losses. Those are Colorado, New Mexico, Utah and Washington.
Two states, Wyoming and Texas, are still adding jobs but are
expected to benefit from the plan anyway. The current estimate is that
Texas will see 269,000 new jobs from the plan, and has already added
43,100 since the recession began.
One of the requirements of the Act is that recipient states and
agencies must file quarterly reports of the number of jobs created with
the stimulus funds. Analysts will be watching closely to determine
whether these funds are going not only to favored spending categories,
but also to those parts of the country most in need of economic