Economy May Not Turn Out to Be Election Panacea for GOP

Like millions of other working Americans, Carl Rocconi voted for President Clinton in 1992, hoping he’d cure the nation’s sick economy.

Since then, Rocconi, a business agent for Chicago’s Local 1 of the Service Employees International Union, has found little to cheer about. “For working people, the economy has been just stagnant,” he complained at the union’s recent convention here. “Real wages have laid flat. It’s getting tougher and tougher to negotiate pay increases.”

From the beginning of the election season, GOP strategists have been counting on such discontent as a key to unseating Clinton--hoping that stagnant wages among traditionally Democratic lower-income voters would provide an opening for Republican arguments.

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But many voters, turned off by the Republican Congress, have tuned out the GOP appeals. Now, a series of new economic statistics indicate that the party’s troubles may have deepened.

Resistance to the GOP message can be heard in Rocconi’s reaction when asked who he will support this year--Clinton or the apparent Republican standard-bearer, Sen. Bob Dole. Clinton “is pretty much doing all he can do” to boost living standards, Rocconi says. While workers worry about corporate downsizing and slow wage growth, “I don’t think he has much control over what corporations do.”

As a union activist, of course, Rocconi is more likely to be allied with Democrats. But polls indicate that, so far, his views are widely shared.

The newer problem for the Republicans has come with the recent statistics on the economy.

First, the Labor Department announced that wages and salaries had increased 1% in the first quarter--not huge growth, but the first substantial increase since the economy slipped into recession during George Bush’s presidency. Then, a few days later, came word that the economic growth rate for the first quarter had been 2.8%, considerably above what most economists had expected. Finally, on Tuesday the government reported that despite sharp increases in the cost of gasoline and heating oil, consumer prices rose only moderately last month, dampening fears that inflation could become a problem.

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None of those measures necessarily mean that conditions are going to get much better for Ricconi and wage-earners like him. But taken together, they indicate the overall economy may be improving at the best possible time for Clinton--just as voters begin making up their minds about the election. Historically, economic figures during the spring and summer of an election year are among the strongest predictors of a president’s reelection chances.

The change in the economic climate since the last presidential election is particularly noticeable here in the Midwest. Economic fears were raw in the region during the 1992 campaign, but unemployment rates are now so low that some companies complain of having trouble finding enough workers.

The potential opening for Dole and the GOP is that while the overall economy may be growing once again, the long-term problem of stagnant living standards remains unsolved. Median household income at the end of 1994--the last year for which figures are available--was still 6.6% below what it was in 1989, at the peak of the business cycle.

While wages did grow in the first quarter, the increase for white-collar employees was double that seen by blue-collar workers. For the past two decades, wages have scarcely risen, except for those at the very top levels.

“We’ve had this long recovery and yet, at the end of the day, the average worker isn’t much better off than he was at the start and in some ways maybe worse,” said Ruy Teixeira of the Economic Policy Institute, a liberal Washington think tank.

For Dole to have a realistic chance of winning the White House, most analysts believe he will have to find a way of reaching voters aggrieved by that slow growth.

In doing that, he first has to overcome the harshly negative image that many voters now hold of the GOP--in part because of Republican proposals to cut back social programs in order to balance the federal budget.

“In 1994 our members voted [for Republicans] out of their own frustration and against the establishment,” AFL-CIO President John Sweeney said. “What they got was the shock of their lives. They didn’t vote to see Medicare and Social Security attacked.”

Republicans, of course, deny they staged any such attack, but concede the charge has stuck. “The Democratic establishment and their union allies have done a good job of defining the GOP Congress as a threat to people’s well-being,” complained former Bush campaign pollster Fred Steeper, now a Dole advisor. “People now have a caricature in their minds of the Republican Congress.”

Other Republican leaders say the party itself must share in the blame. “Republicans have failed to show they understand the legitimate anxiety that’s out there,” said Richard Williamson, an Illinois GOP leader and former Ronald Reagan aide. “Everybody has a neighbor without a job, or a brother, and Republicans have to say they understand that’s happening.”

At the same time, however, polls indicate that Clinton has only a wobbly hold on the economic issue. The most recent Los Angeles Times Poll, taken in mid-April, showed that while respondents approved of Clinton’s overall handling of his office, only 45% approved of his handling of the economy, while 46% disapproved

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To capitalize on that, “Sen. Dole has to identify the causes of slow economic growth and tie these causes back to Democratic policies,” said Whitney Ayres, who polled for Lamar Alexander’s unsuccessful bid for the GOP presidential nomination.

So far, however, Dole has had difficulty making that case. Aides say the GOP candidate plans a major speech on the economy later this month or next, but they have not yet resolved what he should say.

Ayres’ answer is to stress the Republican indictment of the Democrats as tax-hike addicts. “One of the primary economic burdens on middle-class families today are rising tax rates,” he said.

Some say Dole should push for more radical changes. Among ideas being discussed at Dole campaign headquarters is advocacy of a 10-hour workday and a four-day workweek, giving working parents an extra day for family time without losing income.

Whatever tack Dole decides to take, the party has a built-in problem because of its ties to the business community, much of which has enjoyed handsome profits lately and takes offense at talk of hard times.

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Patrick J. Buchanan, Dole’s most formidable adversary in the contest for the GOP nomination, argues that the party needs to sever its ties with giant corporations, particularly those with international interests, in order to address the economic concerns of wage-earners.

“What is good for the corporate economy is no longer good for working Americans,” Buchanan said. But he acknowledged that positions he advocates on issues such as trade run counter to deeply embedded GOP traditions and practices.

Similarly, some Democrats would prefer to see Clinton take a more aggressive stance toward business. “I’d like to see the president jawbone these corporate heads about sharing their profits with workers,” said Rep. David E. Bonior (D-Mich.), the second-ranking House Democrat.

Significant numbers of voters would support such positions, says Guy Molyneux, who has been researching voter attitudes on economic issues for the AFL-CIO. “People do blame government for what’s happening economically,” he said. “But it’s not strictly the conservative interpretation. What some people mean is that government hasn’t done a good enough job of protecting working people by not clamping down on mergers and acquisitions and buyouts.”

But while Dole and Clinton are both eager to find ways of appealing to voter anxieties about the economy, neither has shown much desire to open a broader debate about the power of corporations.

“Dole is going to be reluctant to talk about them” because of Republican links to the corporate world, Teixeira said. “And Clinton doesn’t want to remind people how much things haven’t improved.”

Times staff writer Jonathan Peterson contributed to this story.

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Potential Achilles’ Heel?

Republicans hope that the disparity between President Clinton’s overall approval rating and support for his handling of the economy, as shown in a recent Times Poll, offers the GOP a political opening. But so far, presumed presidential candidate Bob Dole has been unable to turn it to his advantage.

PUBLIC’S TWO VIEWS ON CLINTON

On how he’s handling job as president:

Approve: 55%

Disapprove: 40%

Don’t know: 5%

On how he is handling economy:

Approve: 45%

Disapprove: 46%

Don’t know: 9%

Los Angeles Times Poll of 1,374 adults nationwide, April 13-18. Margin of error plus or minus 3 percentage points.