ECONOMIC RECOVERY ACT FORUM: ARRA has been an economic lifeboat

By Randy Albelda*

When President-Elect Obama announced his set of stimulus spending plans in November 2009, I wrote an op-ed decrying it as the “Macho Stimulus Plan” because he emphasized the important investments in physical infrastructure and the green economy – areas in which men predominated – as the keys to recovering and then renewing our economy. Another problem with what turned out to be “spin” about the stimulus plan was that it conspicuously left out investments in our human infrastructure – where women predominate and an area that has long been undervalued.

In actuality, the American Recovery and Reinvestment Act, isn’t very “macho” at all. One-third went to tax cuts (split between benefiting high income filers and low-income ones), and about one-quarter continues to make its way to states to help alleviate some of their fiscal bleeding with targeted funds for Medicaid and education spending. Another sizable portion of ARRA is going to supporting unemployed workers and low-income individuals, families and communities through expansion of funding for Unemployment Insurance, SNAP (the former Food Stamps program), child care, and community health centers. As it turns out, only as small portion is dedicated to physical infrastructure and developing our green economy.

Overall, ARRA has been an economic lifeboat. Without it, all of us would be facing a much bleaker economic picture: higher unemployment rates and even more devastating cuts to state and local services. And while ARRA has not been macho in its effect (women and men probably have benefited equally, although differently), it remains a missed opportunity for women in two ways.

First, the macho spin remains. Spending on building roads, bridges, schools and a green economy are still seen as long-term paths to a better future. And perhaps they are. But so is spending to save our human infrastructure – health care, education and direct care of children, disabled and elders. These areas of spending, however, are at best portrayed as helping out the states, not the long-term investment that they are. Women could use the spin. They are the vast majority of often underpaid paid caregivers in hospitals, health clinics, schools, and nursing homes.

Second, ARRA missed a shot at making key changes to anti-poverty and workforce development programs despite temporarily spending more on them. The lackluster economic performance in the early 2000s, the lack of employer-based benefits in low-wage work, and this recession makes hollow the 1980s and 1990s poverty alleviation strategy of “get a job” directed at single mothers.

*Randy Albelda is a professor of economics and Senior Research Fellow at the Center for Social Policy at University of Massachusetts Boston


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