Job creation: what's it going to take

[ProSense]

Clinton has one of the best jobs records in recent times, and his average was about 2.84 million per year (a total of 22.7 million in two terms)

FDR's created about 18.3 million (7 million in his first term for an average of about 1.75 million). Of course, the population was about 40 percent of what it is today.

In November 1933, FDR created 4 million jobs via the CWA:

The Civil Works Administration was established by the New Deal during the Great Depression to create jobs for millions of unemployed. The jobs were merely temporary, for the duration of the hard winter. Harry L. Hopkins was put in charge of the organization. US President Franklin D. Roosevelt unveiled the CWA on November 8, 1933.

The CWA was a project created under the Federal Emergency Relief Administration (FERA). In order to increase the benefits, another program was needed and the CWA was set up along with the Civilian Conservation Corps, a.k.a. the CCC.

The CWA created construction jobs, mainly improving or constructing buildings and bridges. It ended on March 31, 1934, under the advice of Lewis Douglas, after costing $200 million a month. So much was spent on this administration because it hired 4 million people and was mostly concerned with paying high wages.

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An article in Slate stated: Four million jobs in two years? FDR did it in two months.

... Roosevelt diverted not quite one-third of Ickes' PWA budget to Hopkins' CWA with the goal of putting to work 4 million people. As a percentage of the population, that would be the equivalent of putting 10 million people to work today. In his first weekly radio address, Obama pledged that the stimulus package would "save or create 3 to 4 million jobs over the next few years." (His budget director estimates that 75 percent of the money will be spent within 18 months.) Hopkins got there within two months.

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The only serious obstacle the CWA encountered is the same one that President Obama would face today: politics. Republicans and conservative Democrats in Congress screamed bloody murder about Roosevelt's dalliance with state socialism—Republicans like Landon who were willing to admit a government program might actually work were as rare then as they are today—and the segregationist Georgia Gov. Eugene Talmadge was apoplectic to learn that black laborers were being paid as much as white ones. Once winter had passed, Roosevelt, worried that the controversy would cost him Democratic seats in the coming midterm congressional elections, ordered Hopkins to shut the CWA down. Hopkins promptly and uncomplainingly did so. A year later, though, Roosevelt recognized his error and put Hopkins in charge of the Works Progress Administration (later the Work Projects Administration). Over its life, the WPA would create, on the model of the CWA, more than 8 million jobs, which today would be equivalent to creating more than 20 million.

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Interesting because 20 million is near the 23 million Clinton created in his two terms. Of course, FDR created more than 18 million jobs in his three terms. To extrapolate based on the population stat above, FDR created the equivalent of 45 million jobs, or 15 million per term and 3.75 million per year.

So 2.5 million per is adequate. More than 3.5 million jobs per year is excellent.

The stimulus has created or saved 3 million jobs. As in the 1930s, President has to reverse a huge jobs deficit. In 2010, the economy created 1.1 million jobs, which is less than half the jobs required for adequate job creation.

If President Obama can bring the economy to create in the range of 2.5 million jobs in 2010, it will make a dent. More is better.

In December 2009, Krugman created a benchmark:

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Anyway, I thought it might be useful to create a sort of benchmark for the level of job growth that would really count as good news. I start from the fact that we’ve lost about 8 million jobs since the recession began — that’s the official number plus the preliminary estimate of the coming benchmark revision. I then take EPI’s estimate that we need to add 127,000 jobs a month. EPI points out that when you put these numbers together, they say that to return to pre-crisis unemployment within two years we’d have to add 580,000 jobs a month. That’s not going to happen.

But let’s set a more modest goal: return to more or less full employment in 5 years –which means seven lean years of depressed employment. To keep up with population growth over those 7 years, the United States would have had to add 84 times 127,000 or 10.668 million jobs. (If that sounds high, bear in mind that we added more than 20 million jobs over the 8 Clinton years). Add in the need to make up lost ground, and we’re at around 18 million jobs over the next five years — or 300,000 a month.

So that’s a useful benchmark. Even if we add 300,000 jobs a month, we’re looking at a prolonged period of suffering — a huge cost from the Great Recession. So that’s kind of a minimal definition of success. Anything less than that, and it’s bad news. It sort of puts that wonderful report that we only lost 11,000 jobs in perspective, doesn’t it?

Again, Clinton created about 2.84 million jobs per year. By today's standard, FDR created about 3.75 million.

President Obama needs to create at least 300,000 jobs per month to dig out of the hole in five years. So the most agressive job creation since FDR is needed to dig out of this hole.

NYT chart from 2003:








Edited to date the chart.

[bluerum]

1. Great chart. Nice information on normalized jobs data.

Thanks for posting.

But the question remains - what is to be done? When you have a government that appears to believe that it is better to send billions of tax dollars to wealthy investment banks instead of creating latter day equivalents if CWA or WPA - what is to be done?

[AllyCat]

2. I'm actually surprised at the job creation during Reagan's terms,

but I realize there was a lot a of devastation he did to the future economy with his policies. And look at what Carter did!

We need another program like what FDR accomplished. If we used the banker bailout money to pay people to do jobs here in this country (roads, bridges, schools, VA, etc) we'd go a long way towards providing good paying jobs and putting people back into the game for improving our economy. People back to work means money in their pockets to pay for goods and services on top of the basic necessities.

[ThomCat]

3. Unfortunately

job growth under Clinton was largely temp workers and temp jobs. Salaries and wages were still absolutely stagnant under Clinton's term unless you were in the top 1%.

Clinton's gave us NAFT and Free Trade mania. He gave lifetime limits on public assistance and purged millions the safety nets, creating a huge increase in structural poverty in the US.

He had some very good ideals, but he listened to Greenspan, and Greenspan led him to do shit that to our economy that helped build bubbles. Great if you were an investor and wanted to get rich quick, but horrible if you were a poor or a worker who needed job security.

You can't keep triangulating with the right and expect that it isn't going to benefit the corporations that were underwriting the right in the end. Clinton knew that, so he figured he would steal those corporate underwriters from the right and make them the knew corporate underwriters for the left.

Hey, the Democratic party doesn't need to depend on Labor anymore for money. Our party could be a Corporate Party too! Look at all that Corporate Money rolling in! And he was right. It worked. He convinced a large portion of the part to look for corporate sponsors, and serve their interests to get their money.

It used to be that Republicans out-raised Democrats by Huge margins. That changed. Clinton turned it around so, with corporate money, Democrats were taking in as much money or even more money than Republicans. But with it we got the Blue Dogs and the DLC. Our entire party had to move to the right.

Instead of focusing on jobs, as our party always did in the past, now our party focuses on what the corporations want, and that is Competitiveness. That's how we ended up with NAFTA and free trade coming from our party, which exported millions of jobs, brought down wages for the remaining jobs, and destroyed the idea of pensions and benefits for those remaining jobs.

It's not enough to say that we need jobs. We do need jobs. But we need to make sure that we aren't funding the creation of jobs overseas. And we need to make sure they are Good Jobs, that pay well, and offer benefits, and room to grow and advance. If the only jobs that we create here are low pay dead end jobs that isn't going to do us any good in the long run.

[ProSense]

12. On these points

Instead of focusing on jobs, as our party always did in the past, now our party focuses on what the corporations want, and that is Competitiveness. That's how we ended up with NAFTA and free trade coming from our party, which exported millions of jobs, brought down wages for the remaining jobs, and destroyed the idea of pensions and benefits for those remaining jobs.

Exporting jobs is not going to increase job creation in the U.S.

It's not enough to say that we need jobs. We do need jobs. But we need to make sure that we aren't funding the creation of jobs overseas. And we need to make sure they are Good Jobs, that pay well, and offer benefits, and room to grow and advance. If the only jobs that we create here are low pay dead end jobs that isn't going to do us any good in the long run.

True, and one measure of this is going to be the quality of the jobs. If the manufacturing sector] can be revived driven by high paying jobs, then that would be a huge plus.

[ThomThom]

4. invest in infrastucture....... that is how you will create jobs

high speed trains would be good
update the interstate highways
solar powered everything
to name a few

[Clio the Leo]

5. bookmarking for later....

.... so I can read it when I'm not still half asleep. :)

[DCBob]

6. Incentives to get companies to begin hiring..

There is huge pent up demand but companies are still reluctant.. so something is needed to persuade them to begin hiring... perhaps tax incentives.

[justiceischeap]

7. Companies *are* hiring, they're just not hiring in the US

http://www.google.com/hostednews/ap/article/ALeqM5iFY0R9agrMVljqtaB6ccsILSKd3Q?docId=771fbe245e624cbd95ab5a49122dd701

Corporate profits are up. Stock prices are up. So why isn't anyone hiring?
Actually, many American companies are — just maybe not in your town. They're hiring overseas, where sales are surging and the pipeline of orders is fat.
More than half of the 15,000 people that Caterpillar Inc. has hired this year were outside the U.S. UPS is also hiring at a faster clip overseas. For both companies, sales in international markets are growing at least twice as fast as domestically.

[DCBob]

8. There are huge profit "incentives" for companies to move operations overseas..

We need to figure out a way to offset that with incentives here.

[justiceischeap]

9. I agree but I think part of the problem is that companies hiring overseas

no matter the incentives given in the US, would probably still hire overseas because of the cheap labor pool. Why pay people in the US, say $10/hr, when they can go overseas, get incentives plus only pay .50/cents an hour? Corporate greed has gotten out of hand and I don't see a way to stop that sort of thing, even with the best incentives. It's extortion that, IMO, won't come to much. When Americans become willing to work for pennies on the dollar, then the companies will start hiring in the US.

[DCBob]

10. Well, that is the bottom line.. labor costs.

I dont know the solution to that either.

[ProSense]

11. True, but

the jobs have to be created in the U.S. to apply to the OP.

[WiffenPoof]

13. Thank You ProSense....again

Extremely informative and essential. I remain a person that would love to see more of our tax dollars go towards WPA programs than to rich bank interests.

-PLA