Dukakis, Bush Tailor Jobs Statistics to Suit Their Needs
The 1988 presidential campaign is about to explore a quadrennial question: Is prosperity for Americans just around the corner, or has it slipped farther away in recent years?
Democratic presidential candidate Michael S. Dukakis, in mounting his attack on the Republicans’ stewardship of the economy in this decade, is reviving his earlier charges that the Reagan Administration has created a “Swiss-cheese” economy--replacing high-wage manufacturing jobs with lower-paying “hamburger” jobs, holding down many Americans’ incomes and shrinking the nation’s middle class.
Meanwhile, Dukakis’ Republican rival, Vice President George Bush, is boasting that the Administration he served has created 17 million new jobs over the past six years--the best performance in the industrialized world. Bush contends that most of these new jobs have been in high-wage managerial and technological fields, which pay an average $22,000 a year. He describes wage levels now as being “at a record high.”
Predictably, each candidate cites a stack of analytical studies that purport to show conclusively that his facts are correct. In one of the latest of these, the Democratic-run congressional Joint Economic Committee weighed in last week with a paper by a University of Massachusetts professor tending to support Dukakis’ view. Still more studies are due out around Labor Day. Unfortunately for the electorate, however, economists say the debate is likely to produce more heat than light. Despite the plethora of figures and reports, economists say, truly definitive data on the key points simply is not available. And many findings cited are not largely the result of any administration’s policies.
Indeed, what little is clear on the issue of how well Americans are doing, they say, is that progress or setbacks vary widely according to the age, sex and education level of each individual worker. For example, college-educated women are faring far better than they did in the 1970s, while male, 30ish, high school graduates are decidedly worse off.
Thus, as the debate intensifies, there are these considerations:
With serious gaps in the way the statistics are kept, the available figures often seem conflicting, and analysts can--and are--selecting them to prove whatever they or their candidates want to show. “This is one of those situations where the political predilections of the economists doing the studies become obvious,” says Michael Barker, a Democratic economist.
Many developments that the candidates cite are extensions of trends that began long before the Reagan Administration took office and would have occurred no matter who was President. In many cases, they are more the result of long-term demographic changes than of any administration’s economic policies. The push toward more female-headed households is an example of such a social trend.
Even the effect of the Administration’s willingness to tolerate high budget deficits and an extra-high dollar during its first few years is not a clear call, many economists say. While the Administration’s posture “made the situation worse in the short term” for Americans’ prosperity “and probably caused some long-term problems,” says Joseph J. Minarik, an economist at the Urban Institute research organization, “because this has been going on since the early 1970s, you can’t say this has been a Reagan problem.”
On the other hand, Minarik notes, “You can’t say there’s been a Reagan solution to this, either.” Indeed, even where a particular charge seems valid, economists say neither candidate so far has proposed any policies that effectively would deal with the heart of the problem.
Job Creation Dispute
That is the continued sluggishness in America’s growth in productivity. “We’ve got to decide what to do about that,” Robert Z. Lawrence, a Brookings Institution economist, asserts.
The confusing clash of statistics on prosperity is illustrated by the question of the new jobs that have been created in the economy. Dukakis, contending the Reagan-era jobs are generally substandard, cites figures that show job growth or decline industry by industry. These show that many industries--such as durable goods manufacturing--that traditionally have paid relatively high wages have suffered large job losses. Lower-wage industries, such as services, have gained.
But Bush can back up his own claims of growth in good jobs by citing statistics by occupational category. These show that the largest gains came in higher-pay areas such as managerial and professional slots, sales and construction trades. Important, too, they each cover a slightly different period. “If you’re a Democrat, you include the 1981-82 recession years,” says Frank Levy, a Brookings Institution economist. “If you’re a Republican, you leave them out.”
Moreover, the two candidates use data based on averages and median income levels.
Janet L. Norwood, commissioner of the meticulously nonpartisan Bureau of Labor Statistics, points out that none of the figures deal with the question definitively because they do not directly track displaced workers individually to see how much they were making in their previous manufacturing jobs and how much they are making now. “What you really want to find is what happened to the individual,” she says. “We don’t have much” of that type of data.
Have Americans failed to increase their paychecks during the Reagan years? Dukakis says yes, citing figures on wage levels adjusted to account for inflation. Bush asserts that Americans are earning more than ever before. As usual, both are correct--in different ways--but there’s considerable question whether the Reagan Administration can take much responsibility either way.
Brookings’ Lawrence acknowledges that real wage levels have barely risen during the past seven or eight years but contends that the stagnation results primarily because workers’ productivity has not been rising rapidly enough--a dilemma whose roots go back to the late 1960s and early 1970s. If anyone can find a way to increase productivity sharply, the problem will disappear.
Change in Income
At the same time, the Census Bureau reported last week that median family income in the United States has been rising and is now at record levels. That is partly because there are decidedly more two-earner families today than there were eight or nine years ago, and because women, many of whom only entered the work force in the mid-1970s, finally are moving up to better-paying jobs.
Is the middle class disappearing as Dukakis’ forces suggest? Census bureau statistics show that the percentage of income taken by the middle class has been shrinking for at least 20 years, but again that is not new or necessarily attributable to any one administration. Indeed, several recent studies show the bulk of the shrinkage has come because more people are moving into the upper -income brackets. The proportion at the lower end has remained relatively constant.
Brookings’ Levy, the author of “Dollars and Dreams: The Changing American Income Distribution,” argues that in many cases long-term social and demographic shifts play a much greater part in influencing prosperity than any administration’s short-term economic policies.
For example, the shift from a manufacturing economy to a service economy has been going on for decades. Today’s work force demands better-educated workers, leaving dropouts worse off than ever. There are more women and proportionally fewer teens; more two-earner families and more female-headed families.
The way Levy figures it, what the statistics really show is that how Americans have fared over the past few years varies widely according to how they fit into the demographic trends. College-educated women in the 25- to 34-year-old groups are earning about 12% more than their counterparts in 1973, in part because of more opportunities, he says. Life for men in that bracket is unchanged. Poorly educated men and women both are decidedly worse off.
“The people who have done worse are the young, less well-educated men--the 30-year-old guys who were hurt because employment in the manufacturing sector dried up,” Levy says. Partly because of higher job requirements, the income gap between those who only completed high school and those who went to college has tripled over the past two decades. “The kinds of jobs the high school guys went to were hurt by the high dollar,” which made U.S. goods less competitive in price in foreign markets.
Virtually all the economists agree that the best way to improve prosperity levels in America would be to boost productivity in the work force--by reducing the federal budget deficit, upgrading the nation’s educational system and providing a better climate for increased investment. But they say neither candidate has proffered a detailed plan yet for doing any of those.
Meanwhile, Barker predicts that this year’s debate over the “income gap” will “turn out like the missile gap debate of 1960--that a few months after the election we’ll find out there wasn’t any gap at all.”
“The whole debate has been couched in a very confusing way,” Lawrence agrees. He said he is not optimistic that it will become any clearer very soon.