August 29, 1993
"Ordinary Job Growth - Clinton is Not a Miracle Worker"
San Jose Mercury News
By Timothy Taylor
<< Back to 1993
IN THE creation of new jobs, George Bush's term of office was
an outright disaster. From February 1990 to November 1992 -- that is, for the
33 months leading up to last year's presidential election -- the number of civilian
U.S. jobs increased by zero percent. That's zip. Zilch. Nil. Naught. Nada. Goose
egg. Bagel. Not at all.
Meanwhile, over that time period, enough new workers entered the labor force
that the unemployment rate rose from 5.3 percent to 7.3 percent.
Little wonder that job creation was one of Bill Clinton's strongest campaign
issues. As his proposed budget staggered through Congress this summer, he even
made a specific promise: that enactment of his program would create 8 million
jobs over the next four years.
Currently, about 9 million Americans are unemployed. Thus, at first glance,
it might seem that Clinton has promised that almost all of the unemployed will
find jobs by 1996, and that the unemployment rate will be less than 1 percent.
If that were to happen, Clinton could probably take out a long-term lease on the
But Clinton's promise of 8 million new jobs is actually a far more modest claim.
In fact, he's merely pledging that the number of jobs will continue to grow at
an ordinary rate. This point deserves some illustration.
Clinton's budget offers forecasts of the unemployment rate for the next few
years. As the 8 million new jobs combine with growth in the number of workers,
the budget predicts that the unemployment rate will fall from 7.3 percent in 1992
to 5.9 percent in 1996. Even by 1998, as far into the future as the budget projects,
the Clinton budget predicts an unemployment rate of 5.7 percent.
By comparison, the national unemployment rate was 5.5 percent in 1988, 5.3
percent in 1989, and 5.5 percent in 1990. By Clinton's own predictions, six full
years of Clintonomics will not create enough jobs to reduce unemployment to the
level that Ronald Reagan left behind.
In historical terms, Clinton's projection also looks modest. Eight million
new jobs works out to an increase of 6.7 percent over four years; not up to the
rapid job growth of Reagan's second term, Carter's four years in office, or the
late 1960s, but still respectable.
In fact, Clinton's pledge of 8 million new jobs essentially amounts to saying
that the economy will continue much as it has through the first part of this year.
In July, the Department of the Treasury put out a media release boasting that
in "the first five months of the Clinton presidency there have been 740,000
private sector jobs created -- nearly 150,000 per month." So multiply it
out. Over 48 months, job growth of 150,000 per month will total 7.2 million new
It's a bit silly for Clinton to be claiming credit for the current state of
the economy. Just as an ocean liner doesn't change direction when a new captain
walks out on the deck, no president can claim responsibility for altering the
course of the $6 trillion U.S. economy immediately upon assuming office.
The truth is that Bill Clinton inherited from George Bush an economy with some
modest forward momentum: it has now been growing for more than two years, and
as Clinton has boasted this summer, the recent statistics on job growth look fairly
good. The policy environment for the 1993 economy, and some proportion of later
years as well, isa legacy of Bush.
When it comes to job creation over an extended period, broad demographic and
economic forces probably matter as much as political decisions. For example, one
reason that relatively few jobs were created in the 1950s is that birth rates
were low in the Great Depression of the 1930s, so the workforce was not expanding
by much. Conversely, one reason that so many new jobs were created from the late
1960s through the 1970s is the surge in workers as many women and the postwar
baby boom surged into the labor market.
From this perspective, Clinton's promise of 8 million new jobs may be too optimistic.
The Bureau of Labor Statistics recently estimated that job growth will average
1.2 percent per year from 1990 to 2005, less than 5 percent growth during a four-year
presidential term. The bureau points out that the working-age population will
not be growing as rapidly, so there simply won't be as many workers. It makes
a good political story to treat Clinton as some sort of economic deity, who can
reach into the nothingness and say: "Let there be jobs." But Clinton's
key economic challenges are more earthbound and pragmatic.
Many of his proposals will create a stronger business environment over time
but also involve short-run job dislocations. Examples include reduced defense
spending, overhauling the health care system, embracing free trade with Mexico,
and cutting the budget deficit.
As Clinton and Congress grapple with these issues, they would do well to remember
that presidents and legislatures don't create jobs. They can transfer jobs from
one place to another, by taxing money that would have supported jobs in one area
and spending it somewhere else. Or they can try to create a healthier business
climate, by making it more attractive and profitable for businesses to hire new
|WORKING ON JOBS
|The table shows the growth in civilian jobs during each four-year
presidential term of office since World War II, both in total number and as a
|Clinton 1993-'97 (promised)
Source: Bureau of Labor Statistics. All measurements from February to February
of the years provided.
<< Back to 1993