Bill Clinton has a problem. Should he take the advice of his treasury secretary and declare that it is morning in America, 1996? Or should he listen to his labor secretary and offer to share the pain Americans are supposedly feeling from corporate downsizing and global competition?
Bob Dole has a problem. Should he tell voters that the economy is in a mess that only a Republican administration, a truly balanced budget, and an honestly downsized government can correct? Or should he acknowledge the economy's gains, claim some of the credit for his own efforts to force Clinton toward a balanced budget, and promise an even brighter morning in America if they entrust him with the chore of cutting the size of government and reducing taxes? Or should he avoid making the economy the major battleground of the campaign on the assumption that most voters are at least as, and perhaps more, concerned about other things this year?
Both men are trying to appeal to an electorate whose views on the economy and their own futures differ in surprising ways from current conventional opinion. Poll data suggest that voters don't seem terribly worried about their economic futures these days, and economic data suggest their moderately good cheer is entirely sensible.
Discounting Gloom and Doom
Most Americans today are rather positive about the economy. In a December New York Times poll, while only 4 percent described the "condition of the national economy these days" as very good, fully 47 percent called it "fairly good." Thirty-three percent said the economy was in fairly bad shape, and 13 percent very bad. The poll appeared with the paper's exceedingly long seven-part series on economic insecurity in America, and the results weren't exactly a perfect statistical backdrop for the series's much discussed gloom and doom. Indeed, it suggests that Americans are, if anything, feeling better about the economy than they did in 1992, when more than twice as many described the economy as very bad. More recent polling from the Gallup organization reinforces these findings--only 20 percent describe the economy as poor, down from 48 percent four years earlier.
Since late 1995, strong pluralities or majorities have told pollsters they are better off than they were when Bill Clinton became president; in the April Gallup poll, 47 percent said the nation's economy is in better shape now than in 1992 and 18 percent that it is in the same condition. Taken together, that is 65 percent, twice as many as those who think the economy has gotten worse.
Looking Ahead with Confidence
People are also confident about their own economic situations. In the March NBC News/Wall Street Journal poll, 73 percent were satisfied with their job security. Wirthlin Worldwide recently reported that 50 percent of those polled described themselves as "very secure" and said they thought they would "have a job" at their current place of employ as long as they wanted. Thirty-four percent described themselves as "somewhat secure" and would "probably have a job" at the same place for the "next five years." Ten percent were "somewhat insecure" and expect either to lose their job in the next five years or be given one "that pays less," while 6 percent called themselves "very insecure" and doubted they would keep their job in the coming few years. Add up all these numbers and it turns out 84 percent of supposedly insecure Americans are looking ahead with confidence to secure employment until 2001 at least.
These numbers haven't changed very much over the years. Since 1975, Gallup has asked people to think about the next 12 months and how likely it is that they will "lose [their] job or be laid off." The most anxious Americans have ever been on this score was in 1982, when roughly 20 percent said a firing or layoff was very or fairly likely. Today, 14 percent say so--a third fewer than in 1982. In March, only 7 percent told ABC News/Washington Post pollsters that they thought a firing or layoff very likely, 15 percent said somewhat likely, 19 percent said this was somewhat unlikely, and 57 percent very unlikely. The 22 percent who can be counted as worriers--those who think it very or somewhat likely that they will find themselves on the unemployment line in the next year--is roughly in line with the number who have had such concerns in the past.
Good Jobs, Good Wages
If Americans are actually feeling more secure than many politicians are suggesting, they have good reason: All the talk of downsizing can't change the fact that the economy is providing jobs for virtually all who want them. With unemployment at about 5.5 percent (3.3 percent for men with a spouse present), we are more in danger of running into shortages of workers than into shortages of jobs. And the new jobs are preponderantly good ones; a recently released study by the president's Council of Economic Advisers shows that more than two-thirds of the 8.5 million net new full-time jobs added in the past few years are in industries or occupations that pay above-average wages. "Employment in hamburger-flipping' jobs actually fell between 1994 and 1995," proudly proclaim the president's economists (although just what is wrong with such entry-level jobs is nowhere stated).
Nor is employment more unstable these days than in decades past. Job tenure--the average time a worker has been at his or her present post--hasn't changed much in over 20 years. Men surveyed by the Labor Department had held the same job for 4.6 years in 1973, and for 5.1 years in 1991, the last year for which comprehensive data are available. And women, now that they have made a fuller commitment to paid work, have seen their average job tenure increase from 2.8 years to 3.8 years over that same time. The one cloud on the horizon is that the average job tenure of uneducated men has shortened slightly, surely one of the reasons that a greater number of high school graduates are choosing to get a higher education.
None of this is to deny that some Americans are having difficulties. A majority of those who do have steady jobs say they are working harder and earning less these days. According to Gallup, nearly 60 percent know someone who has lost a job, which is certainly a new fact of life for most white-collar workers. Those whose jobs do simply disappear often have trouble finding new employment at the same salary level. And it is undeniable that Americans in the bottom 40 percent aren't living lives of luxury--while at the same time those in the top fifth are earning more and more.
But those at the bottom are not sinking. In fact, their incomes have just about kept pace with inflation. More important, they rarely stay at the bottom very long. In 1968 the University of Michigan began tracking over 50,000 individuals of all ages and income brackets. Only 5 percent of those in the bottom fifth of all earners in 1975 were still in that bracket in 1991; 80 percent had made it into the middle class, and 29 percent into the top fifth. Students, immigrants, people temporarily down on their luck, and ordinary workers (particularly those with college educations) are continually moving up the ladder. Those in the bottom fifth in 1975 increased their annual incomes by an inflation-adjusted $25,322 in the 16-year span covered by the Michigan study.
Moving Up the Ladder
Polling data show Americans are not especially insecure. Jobs data show they have little reason to fear being out of work or being shunted from job to job. Income data show most Americans have it within their power to move up what was once called "the ladder of success." And Americans are not behaving as though they are worried about the state of their finances. The economist Herbert Stein points out that people change their behavior when they are really worried about something. People who are really worried about their health cut down on their smoking and drinking. People really worried about crime lock their doors and install security systems. And people who are feeling insecure in their jobs can be expected to save for the rainy day they are expecting. But Americans continue to buy cars in record numbers--more households now have three cars than have none. They continue to buy new houses and furniture and to incur debt. Unless we have all gone mad and are engaged in a frenzied last fling before our economic world collapses, our behavior belies the notion that we are collectively a nation in terror. After all, someone who thinks he is going to lose his job doesn't dash out to buy a car--or even a new couch.
The image of a populace overcome with fear of the future seems due less to the facts than to a combination of media hype and ideological opportunism on the part of politicians eager to carve out a bigger role for government. The idea suits those, like labor secretary Robert Reich, who are perpetually searching for an excuse to enact new government programs--the very same programs they were proposing long before they ever discovered such a thing as middle-class insecurity.
An Unraveling Moral Fabric
And yet Americans are indeed experiencing anxiety and insecurity. But not about the economy. They are concerned about the moral and spiritual well-being of the nation. Americans are concerned, as Michael J. Sandel points out in his new book Democracy's Discontent, that "from family to neighborhood to nation, the moral fabric of community is unraveling around us." Does the United States have what it will take to compete with Southeast Asian nations, deal with the problems of the cities, address the breakdown of families, restore civility to everyday life?
If politicians concentrate only on the economy, they will be missing a great deal of what ails the body politic. People worry about their pocketbooks, of course. But the sources of what is taken to be their "economic anxiety" are only partly economic.
Which brings us back to the conflicting advice being received by the president from Reich on the one hand and treasury secretary Bob Rubin on the other. Clinton is skilled at walking both sides of most of the streets down which he has strolled in his political life.
So while other, more honest politicians might find it impossible to reconcile the two, he will probably have no trouble claiming that the economy is in solid shape thanks largely to his policies, while conceding that the benefits of this prosperity have not been shared as equitably as he would have wished. In short, he will take credit for the voters' gain but share any pain they may feel.
Where does this leave Bob Dole? He can hardly claim credit for the current full-employment, low-inflation economy, even though the Republicans have contributed to that salutary condition by fighting to keep taxes and government spending down. But he can argue that the economy can grow far more quickly, a view increasingly popular on both the left (Felix Rohatyn) and the right (Robert Novak). He can remind voters that the GOP is the party of smaller government, which has both economic resonance (low taxes) and moral resonance (welfare reform). The relatively high personal esteem in which he is held should provide him a base of moral authority from which to talk about the deterioration of the social fabric. But can he articulate, much less conceive, a message of national civic renewal?
Karlyn H. Bowman is a resident fellow, and Irwin M. Stelzer is a resident scholar, at the American Enterprise Institute.