Ohio Unemployment Up: Will Second Stimulus Help?

A new poll conducted by Harris Interactive found that more than half of Americans felt the government stimulus checks recently sent out did not stimulate the economy. The reason? According to the people surveyed, 36 percent used their rebate checks to pay off bills or credit cards, not to buy anything new.

With Election Day just eight weeks away, some lawmakers are considering another stimulus plan-- but it may not mean another check from Uncle Sam. While many details are still being worked out, stimulus No. 2 could give states more money to help with infrastructure projects, Medicaid costs and disaster assistance payments.

The focus on infrastructure has the attention of some economists and union workers.

"When you put money into infrastructure, you're putting local people to work," said Tom Hucker of the Laborers' International Union of North America. "You're making the economy run more smoothly."

Economist Josh Bivens from the Economic Policy Institute explains it this way: "Let's say you hire a construction crew. Then they have spending power. They can go out to the local restaurant, buy clothes for the kids."

In fact, some economists say that one dollar spent on fixing roads and bridges could yield as much as $8 in economic benefits.

"Economists call that the multiplier effect of stimulus spending," said Bivens. "It's essentially putting money in one person's pocket, and then that spending power filters through the rest of the economy and keeps other peoples' incomes up."

According to labor statistics, Washington's economy has experienced less of this "multiplier effect" because the state unemployment rate is up.

The most recent numbers from the U.S. Labor Department show that in July 2008, an extra 36,237 Ohioans lost their jobs, bringing the total number of unemployed people in our state to 429,956.