Voters Reluctant to Credit Clinton for Recovery

WASHINGTON —  Working Americans to Bill Clinton: Yes, Mr. President, it’s still the economy. But it’s hard to believe in a recovery that you can’t see or feel.

It has become perhaps the biggest puzzle in this extraordinary election season. The recovery appears to be in full swing but Americans aren’t giving Clinton and his fellow Democrats much credit for it. If the economy is going so well, why are so many voters in such a foul mood?

The politicians and pundits might be stumped by the mysterious absence of a Clinton economic bounce this year, but some economists believe that they have found the answer. And it is a surprisingly simple one: For the typical American family, they say, things aren’t so great after all.

The relatively robust growth of the economy and the drumbeat of positive economic reports emanating from Washington mask an underlying and far more troubling trend: American wages, benefits and living standards have continued to slide during the first two years of Clinton’s presidency, even as many workers are putting in longer hours at less secure jobs.

Granted, American businesses are enjoying booming profits and surging productivity. But most of the rewards are going to a relatively narrow slice of the electorate--highly educated, affluent households--while the typical American family continues to tread water.

What’s more, the corporate cost-cutting and layoffs that have been the hallmark of the early 1990s have left deep scars on worker psyches, making them more fearful of the future and less willing to pressure employers for bigger salaries and better benefits.

Little wonder that most Americans aren’t impressed when they hear Clinton and his advisers tout the recovery, which has increased the economy’s annual growth to 3.7% since Clinton took office, or the beneficial effects of the Administration’s economic policies.

“I don’t think it’s mysterious at all,” said Allen Sinai, chief economist at Lehman Brothers Global Economics in New York. “There is a squeeze on American workers today. . . . Productivity gains and low inflation are coming on the backs of American workers. We’ve got what looks like the healthiest economy in decades, but that doesn’t sound good if you are working two or three jobs without any benefits, and your wife is working, and you’re just keeping even with where you used to be, and you don’t have much leisure time or time for your family.”

One troubling piece of evidence was provided this month by the Census Bureau, which reported that the median family income declined 1% in 1993, after adjusting for inflation. Today, median household income is stuck at its lowest level in a decade, down more than 7% from its 1989 peak. The steady erosion of household income has continued unabated since the recovery officially began three years ago.

“Changes in income is a better barometer of political trends than national unemployment rates or changes in the national economic growth rate,” said Jack Pitney, a political scientist at Claremont McKenna College in Claremont. “Income is what Ronald Reagan was talking about when he asked: ‘Are you better off than you were four years ago?’ ”

A recent Los Angeles Times Poll suggests that Americans are riven with economic anxiety. Of those surveyed, 50% said they disapprove of Clinton’s handling of the economy and 63% said they think the economy is on shaky ground. Only 41% said they believe that a recovery is under way, while 53% said they believe that the economy is still mired in recession, and 75% said they are convinced that the unemployment rate in their communities will remain about the same or get worse in the next three months.

Some findings seem to defy reality. Although the economy has created approximately 4.8 million new jobs since December, 1992, and the jobless rate has dropped from 7.6% to 5.9%, only 20% of those polled said they believe that the unemployment situation is improving. (The survey, supervised by Times Poll Director John Brennan, queried 1,272 adults, including 1,016 self-identified registered voters, from Oct. 17 to Oct. 19. The margin of sampling error was plus or minus 3 percentage points.)

Without widespread appreciation of his economic accomplishments, some analysts believe, Clinton becomes vulnerable to a host of other voter concerns, from controversies concerning his personal affairs to doubts about his leadership abilities.

At the same time, some analysts say, the lingering perception of economic stagnation seems to be generating a poorly focused sense of anger that is directed not just at Clinton but also at Washington as an institution. In their view, Clinton is a victim only because he is the latest leader to get in the way.

“Clinton has done some good things, but things are just not as good as they should be,” said Charles Daniel, a 50-year-old mechanical supervisor for a construction company in Liberty, Tex.

“We’re still at the same pace of life that we’ve been at for the last three years. . . . People are still out of work and companies are still moving overseas. I’ve been working steady, I haven’t been laid off in four years, but I don’t have any benefits and I’ve got to have health coverage through my wife’s job,” said Daniel, who participated in the Times Poll.

Leslie Marvin, a young mother in Ottawa, Kan., expressed similar frustration. “I’m really disappointed with what Clinton is doing . . . around here, it just doesn’t seem to be doing too good. There’s still a lot of people laid off around here. . . . I’ve been trying to find a job, but it’s really hard for someone who hasn’t completed college,” she said.

This voter antipathy toward Clinton and his economic policies has the White House frazzled. Many in the Administration believe that Clinton has been denied the rightful political benefits that generally accrue to an incumbent President during a period of solid economic growth.

Clinton aides tick off the numbers: three years of declining budget deficits for the first time since the Harry S. Truman Administration, an economy contributing more than twice as much to world growth as the other six major industrialized nations combined and rapid job creation combined with consumer inflation that remains below 3% per year.

“There are more than 4 million people out there working who weren’t working before Bill Clinton became President,” said Alicia Munnell, assistant Treasury secretary for economic affairs. “They have families, and you’d think they would be happy. . . . But you don’t even see that.”

Oddly, recent surveys show that consumer confidence has been rising at the same time that many Americans voice deep dissatisfaction with the economy.

“People know there is a recovery, sort of; they recognize the numbers,” said political analyst Kevin Phillips. “But they don’t see it as a strong recovery, or as a recovery that is strong enough to restore their economic standing.”

Some analysts are convinced that the recovery’s failure to generate any real wage growth or narrow the income gap between highly and poorly educated Americans explains much of the public’s ambivalence toward Clinton’s economic policies. The striking disconnect between the macro-perspective provided by government statistics and the micro-view observed by the public seems to be at the heart of Clinton’s political troubles.

At the same time, the numbers contain a note of caution for Republicans. These are not the kind of economic trends that typically benefit conservatives. And they are not directly addressed by the Republican Party’s new “contract with America,” which calls for a balanced budget amendment and tax cuts for businesses.

Republican leaders are clearly trying to steal the “middle-class squeeze” issue away from Clinton by noting that middle-class families have fared worse under Clinton than they did under Reagan. Even so, current economic conditions could foster anger with incumbents of either party.

Other statistics bear out the complaint of many Americans that they seem to be working harder but taking home less. The average number of overtime hours U.S. workers put in recently hit its highest level since 1970, according to the Labor Department.

Productivity, as measured by hourly output per worker, has zoomed to an all-time high, rising 19% since 1980. That’s great news for U.S. corporations, but it means long, hard days for the average worker.

While the recovery has created millions of new jobs, at least half of them are what economist Sinai terms “soft jobs”--many are part-time or temporary, pay low wages or offer limited benefits.

Employment at temporary-service agencies as a percentage of the work force is at its highest levels in at least a generation, while the number of Americans with employer-provided health insurance fell from 62% in 1988 to 57% last year. Employment in manufacturing--a traditional source of high-wage, full-time work--has posted a net decline of 280,000 jobs since the recovery began.

“It’s clear that the majority of people don’t have reason to feel good about the economy,” said Harvard University economist Lawrence Katz. “And most of the growth that we are seeing is benefiting people with relatively high levels of education and who are already relatively affluent, and that is worsening our income gap.”

This growing inequality is based in large part on educational achievement. A study issued this month by the Federal Reserve Board shows that the only broad population group to experience income growth between 1989 and 1992 were higher-income families headed by college graduates. A Census Bureau study shows that college-educated workers have suffered only a slight decline in health coverage; most of the benefit reductions have befallen poorly educated workers in low-skilled jobs.

Not surprisingly, Administration officials have begun to echo their predecessors in the George Bush Administration. Perhaps the White House hasn’t communicated its accomplishments clearly enough, they say, or perhaps Americans should show more patience and give the recovery--and Clinton’s policies--more time to work.

“Maybe the message hasn’t been heard, or maybe this wasn’t a typical recession and we haven’t had a typical recovery,” said Laura D’Andrea Tyson, chief of the Council of Economic Advisers.

“But the President talked in 1992 about how Americans were working more for less, and you can’t change a trend like that--which has been going on for 15 years--in a period of 20 months,” she said. “We have put the recovery on a strong foundation, and now we have begun a strategy to deal with the economy’s long-term problems.”

The White House recognizes that such assurances won’t help much in this fall’s elections. So Administration officials are eager to prove to impatient voters that their policies are beginning to improve the lot of all Americans; the Administration recently released a preliminary study showing that more jobs in high-wage industries were created in the first few months of 1994 than in the past five years combined.

In addition, White House officials point out that last year’s expansion of the earned-income tax credit for the working poor, which took effect in April, will provide significant relief for 15 million working families when they receive big tax refunds next spring. Other Clinton programs are just now kicking in as well. His re-employment and retraining initiatives for the long-term unemployed, for example, began to pump money into state programs in July.

Some Democratic leaders, express hope that voters will soon judge Clinton’s economic policies more objectively.

“I think people are grudgingly beginning to see that progress is being made,” said Rep. Vic Fazio, (D-West Sacramento), chairman of the Democratic Congressional Campaign Committee. “As the public takes a second look at Republicans, I think they will be interested in seeing that our progress continue.”