Missing The Story On 2.5 Million Jobs
Stimulus: Media are fawning over Obama’s plan to create 2.5 million jobs in two years. But as usual on Democratic proposals, they aren’t doing their homework. By historical standards, Obama’s goal is quite modest.
The president-elect has directed his economic team “to come up with an Economic Recovery Plan that will mean 2.5 million more jobs by January of 2011.” And right on cue, the media have described the plan in glowing terms.
The Washington Post called the goal “more expansive than anything proposed so far.” Reuters described it as “bold” and “aggressive,” and NPR called it “an ambitious economic stimulus package.” “Obama pumps up his economic stimulus proposal” was the headline over the Los Angeles Times story.
Obama hasn’t released any details about the plan, other than to say it will be “a two-year, nationwide effort to jump-start job creation in America,” and that it will be “big enough to meet the challenges we face.”
It will also involve creating a lot of government jobs “rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels; fuel-efficient cars and the alternative energy technologies.”
So the only thing “bold” about the plan, as far as anyone knows, is the number of jobs he hopes to create. But while 2.5 million might look impressive, it’s not. In fact, when measured against trends, Obama has set his job-creation sights fairly low.
Every presidential candidate in recent times has claimed that his policies will lead to the creation of millions of new jobs — often making promises far bolder than Obama’s.
In 1988, George H.W. Bush promised 15 million new jobs. In 1992, Bill Clinton said his economic plan would create 8 million. In 2000, Al Gore promised 10 million new high-tech positions. That same campaign, George W. Bush said his tax cuts would add 5 million to payrolls. In 2004, John Kerry pledged 10 million.
Earlier this year, Hillary Clinton offered up a plan during the primaries that she said would create 3 million jobs just “through increased investments in the nation’s infrastructure.”
Such promises are easy for politicians to make because a growing economy creates enormous numbers of new jobs, no matter who sits in the White House.
Since Eisenhower’s first term, the economy has created an average of 1.5 million new jobs each year. Since Reagan’s first term, the average has been about 2.5 million a year. And Reagan, who inherited an economy as bad if not worse than the current one, saw 6.3 million new jobs created four years after he entered the White House.
If Obama just manages to hit the post-World War II average, there would be 3 million more jobs by 2011.
What’s more, Obama’s promise doesn’t keep pace with projected growth in the labor force. The BLS projects that roughly 2.6 million new workers will enter the labor pool over the next two years.
If that’s the case, Obama’s plan would leave the unemployment rate slightly higher in 2011 than it is now. Moreover, Obama’s stimulus plan could eventually total $700 billion, the Washington Post reports. So, as former Council of Economic Advisers chief Gregory Mankiw notes, each job Obama “creates” will cost $280,000.
Obama can hardly be faulted for continuing the tradition of presidents promising millions of new jobs. And he’s free to describe his plan as bold and brave. But that doesn’t excuse the media for parroting such claims without at least a modicum of fact-checking.