Putting America back to work will be Job One for Bill Clinton. Already, the rumor mills in Little Rock and Washington are running overtime speculating about how the new administration will do it. Some Clinton advisers predict a $60 billion infusion of federal money for public-works projects soon after the Inauguration. Others insist he will stick by his more modest campaign pledge to increase spending on roads, sewage-treatment plants and the like by $20 billion a year. There’s also talk of restoring a tax credit for businesses that buy new equipment, on the theory that more investment means more jobs. Will any of those steps increase employment fast? Easy on the optimism: from Franklin Roosevelt to Jimmy Carter, the history of federal job-creation efforts is mixed at best.
Washington has tried twice to create jobs directly on a large scale. In the 1930s, Franklin Roosevelt’s Public Works Administration sped up spending on dams, schools and other projects built by private contractors, while the WPA put 2 million impoverished workers directly onto the federal payroll between 1935 and 1939. More recently, the Comprehensive Employment and Training Act, a Nixon administration idea, financed both public works and 750,000 jobs with cities and nonprofit organizations during the 1970s, most of them during Jimmy Carter’s presidency.
The New Deal’s programs did much besides putting people to work. The WPA’s legacy runs from New York’s La Guardia Airport to thousands of park shelters and post offices, and much of what it built would have cost far more in times of lower unemployment and higher wages. But there was plenty of downside: staffed largely by unskilled workers and always in a hurry, the agency was plagued by charges of corruption and mismanagement. “They were never able to build as cheaply or as efficiently as private contractors did,” says Pace University historian Barbara Blumberg. And while the WPA provided employment, it did little to stimulate business. Most of those who left the rolls could not find work in the stagnant private sector, and many turned to the WPA once again.
CETA’s record in creating employment is more dubious. Many CETA jobs weren’t new: the money let hard-pressed cities like Cleveland, which employed CETA firemen, hang on to their workers without spending local tax revenue for their salaries. In theory, CETA rolls were supposed to decline as private-sector employment rose, but politics got in the way: by 1979, when the jobless rate fell below 6 percent, city governments and social agencies were so addicted to the free labor that they campaigned against cuts in funding. Political scientist Richard Nathan, a Nixon administration official who oversaw a largely positive study of CETA in 1979, says the biggest problem was the program’s sheer size. “Everybody says Ronald Reagan shut down public-service employment,” he says. “It was so big and controversial, if Teddy Kennedy had been elected he’d have shut it down.”
Not all employment programs are in disrepute. Policy wonks and politicians of all stripes now favor requiring most welfare recipients to take low-paying government jobs, the concept known as “workfare.” But workfare is less a jobs program than a way to make welfare benefits less attractive. “They’re never going to be the most essential jobs in society,” admits Brookings Institution economist Gary Burtless. “On the other hand, people are doing something for the benefits they get.”
No one in the Clinton camp holds up old-style programs like the WPA or CETA as models for Clinton’s new-style thinking. One of the attractions of the investment tax credit is that it avoids bureaucracy, leaving it to the business sector to create the jobs. But the ITC, too, has enjoyed only spotty success in its previous incarnations. And if the lowest interest rates in two decades aren’t inducing businesses to invest, will a tax break make that much difference?
Clinton will have some easy, symbolic opportunities to signal his concern about unemployment. About $4 billion in highway and transit programs around the country are ready for construction as soon as money is available; for a relatively small sum, the new president’s name could go up on red, white and blue sign-boards coast to coast. Luck may enable him to avoid more costly choices. Unemployment is falling, layoffs are down and small businesses are doing more hiring. By Inauguration Day in January, confidence may be on the upswing even without an extra boost from Washington. The pressure for jobs programs would fadeand the Clintonites could get on with the task of putting the economy on a sound footing for the long term.
