Stanford’s Stimulus Dollars Create Few Jobs

Two years after the House and Senate passed the national stimulus plan into action, Stanford University continues to receive stimulus funding in all seven schools, enabling professors to pursue new research directions. However, the funds have resulted in few jobs relatively few jobs.

Stimulus funds awarded to Stanford are part of an initiative to stimulate the economy through research in science and investment in education. To date, approximately 192 million dollars worth of funding has been put to use by Stanford University, distributed across campus in the form of 307 grant-awarded projects.

The nearly $200 million in federal spending has resulted in the creation of 339 jobs on campus thus far. Based on reported data, for every $566,000 in stimulus dollars spent on campus, one job has been created.

“The idea of borrowing and spending half a million dollars simply isn’t defensible. It’s not sound politics. It’s not even good politics,” explained Bill Whalen, research fellow at the Hoover Institution.

“For that level of investment, the federal government could have given 10 deserving people in East Palo $50,000 each and done wonders for their lives.”

The American Recovery and Reinvestment Act of February 2009 provided for the infusion of roughly $787 billion into the economy in the form of federal grants, tax cuts, and welfare benefits following the financial downturn of 2008. A central focus of the initiative included “technological advancements in science and health.” Much of Stanford’s use of the stimulus money has been the result of this objective, primarily through research grants backed by organizations such as the National Institute of Health (NIH) and the National Science Foundation (NSF).

Senior Associate Dean of the Stanford Medical School Marcia Cohen stressed the importance of stimulus funding to medical research: “Since the end of the doubling of the NIH budget, [Stanford Medical School’s] real purchasing power for research has gone down,” she explained. “The funding we have received hasn’t kept up with inflation.”

Across the entire medical complex at Stanford, stimulus funding is estimated to provide for 100 to 200 new employees. Across the state of California, $48,640,864,370 in stimulus funding, the largest sum for any state provided an estimated total of 54,298 jobs. Based on that data, for every $895,000 in stimulus dollars spent in the state, one job has been created.

A significant portion of California’s funds went toward education, with California’s state university system the 5th highest recipient of stimulus funding at $716 million.  Although the UC system was hit the worst by the crisis, Stanford University also suffered severe losses.

By the end of 2009, Stanford University’s endowment shrunk by 30%, resulting in approximately 470 layoffs due to budget cuts.

Stimulus funds that Stanford has received over the last two years have been in the form of science and technology grant money; the primary purpose of these grants being to help facilitate new discoveries in science and technology independent of the number of jobs created.

For Professor Daniel Schwartz’s research in the School of Education, research dollars were reportedly critical to the creation of jobs. His stimulus-backed grant funding investigates how science is introduced in the classroom.

While the project itself has only created one part-time job and one post-doctoral position, the majority of his grant funding has been allocated to employee salaries. According to Professor Schwartz, these are jobs that would have had “zero-chance” of being created with less funding, with “nearly all” of the grant money being spent on salaries over supplies.

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