Errors in stimulus reporting mar data
Agency’s claims off, review shows
WASHINGTON — A trove of data on $517 billion in emergency smallbusiness loans contains numerous errors that cast doubt on the Trump administration’s jobs claims and obscure the real economic impact of the program, according to a Washington Post analysis and interviews with bankers and borrowers.
A Post analysis of data on 4.9 million loans released last week by the Small Business Administration shows that many companies are reported to have “retained” far more workers than they employ. Likewise, in some cases the agency’s jobs claim for entire industries surpasses the total number of workers in those sectors.
The flaws raise questions about the claims by the Trump administration that 51 million jobs were “supported” by the Paycheck Protection Program. Many economists credit the program with helping soften the blow to the job market by offering forgivable loans to small businesses that rehire or keep workers on their payroll.
But repeated claims by President Donald Trump and administration officials about the success of the program are belied by
errors in data collection, according to the Post analysis.
For every loan offered to businesses under the program, the Small Business Administration lists a number of “jobs retained.” But in numerous cases, the listed number of jobs retained exceeded the total employment at the company, according to interviews with individual loan recipients.
BIG DIFFERENCE IN NUMBERS
The Post found half a dozen businesses that said they had fewer employees than the agency reported the businesses had retained. Bankers also said employment figures for hundreds of businesses had been incorrectly reported by the agency.
Fire Protection Systems, a sprinkler system installer in Kent, Wash., retained more than 500 jobs using its program funds, according to the data. The company says it has only 20 employees. Also said to have retained more than 500 jobs was Trinity Episcopal Church outside Houston. The church says it has 12 paid staffers.
The data also claimed that International Dunnage, a manufacturer in Thunderbolt, Ga., saved more than 500 jobs. But the company says it has just seven employees and two owners.
“I don’t know where you got the 500,” owner David Crenshaw said in an email.
The problematic figures extend to entire sectors. The data claims that companies listed in the field of landscape architecture retained 114,000 jobs — more than three times the number of people who worked in that sector in 2019, according to Labor Department statistics.
The Paycheck Protection Program also supposedly preserved tens of thousands more jobs than are known to exist in other industry sectors, such as oilseed and grain farming, performing arts and employment placement.
MORE ASSESSMENT NEEDED
Some businesses may have reported the wrong industry code when applying for a loan. However, experts said that could not explain the scale of the discrepancies, especially considering that jobs at companies with more than 500 employees are for the most part not eligible for program support.
Treasury Department and Small Business Administration officials say job numbers and industry classification information were provided by borrowers and that by allowing companies to self-certify their information the government could more quickly distribute funds to companies struggling to make ends meet amid the pandemic.
But the problems in the data complicate efforts to assess the impact of the program. The Trump administration has declared the program an “indisputable success,” but that declaration is premature, experts say, cautioning that economists will need much more time and information to assess the results of taxpayers’ significant investment.
Trump administration officials have repeatedly touted the 51 million jobs as a top reason they consider the program a success, but they have used differing terminology to explain the program’s effect on employment.
Trump said the program is “saving and supporting the jobs of tens of millions of American workers” at a July 2 news conference.
In a congressional hearing last month, Treasury Secretary Steven Mnuchin said the program, which is authorized to spend up to $660 billion on forgivable loans, was “supporting an estimated 50 million jobs.”
LANGUAGE UNCLEAR
In the data the Small Business Administration released last week, the agency included for each loan the number of “Jobs Retained,” which officials said equates to the figures companies filled in on their applications in a field asking for the “Number of Employees.”
But by sometimes saying millions of jobs have been “saved” and in other instances saying jobs have been “supported” or “retained,” administration officials have not been clear about the program’s effect. More-accurate data about how the funding has supported employment should become available as borrowers have their loans forgiven, which requires them to demonstrate how they delivered funding to workers.
“At this point in time, it’s hard to believe that the 4.89 million PPP loans granted by the SBA would support 51.1 million small-business jobs,” Beth Ann Bovino, chief U.S. economist at Standard & Poor’s Global, said in an email.
She said that errors in data collection probably “skewed the overall jobs figure upward.”
“Even if we assume no data collection errors, based on other data from the SBA and the Census [Bureau], it still seems doubtful that the loans would support that many jobs,” Bovino said. “One would have to assume that the 4.89 million loans largely went to small businesses with significant payrolls, a very unlikely outcome.”