The Auto Bailout Saved 1.5 Million Jobs — and Likely Made $50,000 on Each One
According to a new study, the 2008-2009 auto bailouts saved 1.5 million jobs in the auto industry — meaning that each job cost the country less than $12,000 since 2009. In return, those employees have contributed more than $105 billion to the government in taxes — a net gain of nearly $59,000 apiece.
The study, conducted by the Center for Automotive Research and reported by NBC News evaluated the effect of the loans from the government to auto companies under the Troubled Asset Relief Program, or TARP. The $79.7 billion loans, CAR found, prevented the immediate loss of 2.63 million jobs in 2009, of which 1.5 million people would still be out of work in 2010. By contrast, the entire job addition since January 2009 nationally stands at 2.34 million, including the estimated number of jobs added in November.
The country still hasn't regained all of the jobs lost since January 2008, as the chart below shows. (The red line is cumulative job totals; blue bars are monthly job loss/gain.) With those 1.5 million jobs missing, that hole would be 2.78 million jobs deep instead of 1.28 million.
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The Treasury Department tracks the spending and repayment of TARP funds over time. Of the nearly $80 billion loaned to the car companies, only $10.9 billion is still considered outstanding as of this month, with $62.2 billion repaid. (The difference is largely in write-offs.) The government is just sold its remaining GM stock, absorbing most of that $10.9 billion loss.
But in other words: the government invested $11,666 per person in order to keep those 1.5 million jobs — or $2,900 for each year since 2009. (If you only consider the outstanding amount, that figure drops to $7,266 per person, or $1,800 a year.) And according to NBC, those employees contributed $105.3 billion in "unemployment benefit payments and the loss of personal and social insurance tax collections" — meaning a net profit per employee of $58,533 per person. Some of those people might have found other work had they been laid off, certainly, but some loss of tax income and outlay of unemployment was certainly avoided.
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One of the study's authors was optimistic about how the bailout would be viewed over the long term. "This peacetime intervention in the private sector by the U.S. Government," CAR chief economist Sean McAlinden said, "will be viewed as one of the most successful interventions in U.S. economic history." But political sentiment doesn't always track with data. Last month, the conservative-leaning Rasmussen Reports found that only 39 percent of Americans consider the auto bailout to have been good for the country.
This article was originally published at http://www.thewire.com/politics/2013/12/auto-bailout-saved-15-million-jobs-and-likely-made-government-money/355943/
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