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Where are jobs after stimulus is gone?

Stimulus money is driving the work on the Leroy Selmon Crosstown Connector with Interstate 4. Here, workers prepare a metal casing for a bridge support. The project is expected to employ up to 450 people over a three-year period.

WILLIE J. ALLEN JR. | Times

Stimulus money is driving the work on the Leroy Selmon Crosstown Connector with Interstate 4. Here, workers prepare a metal casing for a bridge support. The project is expected to employ up to 450 people over a three-year period.

At first glance, Florida appears to be in a whirl of job creation.

Tens of thousands of construction workers and teachers benefiting from federal stimulus dollars. Hospitals and small businesses tapping government-backed subsidies to add up to 11,000 workers. About 63,700 U.S. Census takers hired statewide.

Those positions have one thing in common: They're all short-term.

So what happens when those jobs end?

The hope is that by then the private sector will jump back into job hiring mode, perhaps by year's end or early next year. They'll keep some of the short-term hires on permanently, the theory goes, or other businesses will pick up the slack as some stimulus dollars and other federally funded programs start to dry up.

But it will be a tricky transition, particularly in states like Florida, where double-digit unemployment could drag well into next year.

"The hope is that the engine eventually sparks and the stimulus is just a way to bridge through this period of downturn in the economy," said John Challenger of the Chicago-based outplacement firm Challenger Gray & Christmas.

If the stimulus doesn't work, "that would be the double-dip scenario" lurking as a possibility, he said.

Challenger thinks a double dip is unlikely. So does Scott Brown, chief economist for Raymond James Financial in St. Petersburg. Yet, Brown acknowledges the path will be treacherous.

In addition to stimulus programs winding down in 2010 and 2011, thousands of unemployed Floridians will run out of extended insurance benefits, he points out. Those who don't find work will have less money in their pockets to spend on Florida goods and services and will further strain the social services network.

Meanwhile, the state has postponed for two years a huge increase in unemployment taxes charged to businesses. But employers know that won't last forever, another reason for them to take it slow in bringing on new workers.

"There's still a lot of headwinds for the economy. The residential hangover. Problems in commercial real estate. Bank lending is still tight. The price of oil is always a major wild card," Brown said.

"We hope hiring picks up (as stimulus funds dry up). We think it probably will, but it's uncertain."

Hiring 'a little hazy'

Don Winstead, who was tapped by Gov. Charlie Crist to oversee the federal stimulus dollars flowing into Florida, is watching the calendar closely.

Short-term hiring funded by stimulus money should build throughout 2010 and well into 2011, then "substantially" fade out in the latter part of 2011, he said. Some projects, particularly those in construction, will be slow to gain steam. Other short-term ventures, like the Back to Work program and hiring of part-time census workers (which is not connected to the stimulus program), will largely phase out by the end of this year.

And when will Florida employers ramp up hiring?

"That," Winstead said, "is the key question. … My crystal ball gets a little hazy."

Based in part on a January report from the Council of Economic Advisors, Winstead's office estimates that the total impact of the stimulus in Florida so far is 128,800 jobs.

Without the stimulus money, Florida's already bloated 12.2 percent unemployment rate would be between a half a percentage point and 1.5 percentage points higher, Winstead said.

The stimulus funding is splintered through many different entities and projects, which makes it difficult to predict its impact over the next two years.

"There's not one pot of money, but lots of pots of money," Winstead said. "And each has its own lifespan."

Stimulus funding for teachers, for example, has been split across two fiscal years, so it will last until the summer of 2011. Energy funds will probably last another year and a half. Transportation money will run out by the end of 2011.

The industry waiting longest for the stimulus job surge is the one hardest-hit: construction.

The Florida Department of Transportation's two biggest stimulus jobs — improving U.S. 19 through north Pinellas County and building the Interstate 4/Selmon Expressway Connector — will both ramp up hiring later this year.

Regina Rehfield of PCL Construction, one of two partners building the Selmon Connector, said the project will employ up to 450 subcontractors, material suppliers, skilled workers and others over a three-year period. Construction began this month, with 170 people on board so far. Peak employment, she said, should be sometime in mid 2011.

Winstead expects to get a much clearer picture of the stimulus' impact when the next quarterly report comes out in mid April. For now, like many, he takes heart at signs that the worst of the downturn is over: mass layoff numbers are down dramatically, the number of first-time unemployment claims is falling and hiring of temps is on the rise.

Job growth, the ultimate lagging indicator of every economic recovery, could remain the missing ingredient for a long time. Challenger doesn't expect to see any real job growth until late this year or early next year.

Gov. Crist, for one, prefers to not to even ponder long-term job recovery, but focus on the present. Crist, who was chastised by fellow Republicans for backing the stimulus program, contends short-term jobs funded by the government are an important first step toward recovery.

"Our concern has to be the here and the now," he said during a recent trip to Tampa. "We're operating in the present day. People need jobs now."

Times staff writer Kim Wilmath contributed to this report. Jeff Harrington can be reached at jharrington@sptimes.com.

Where are jobs after stimulus is gone? 03/27/10 [Last modified: Friday, March 26, 2010 9:58pm]

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