Democratic presidential nominee Hillary Clinton delivers a speech on the U.S economy in Warren, Mich. on Aug. 11, 2016.Bill Pugliano/Getty Images
Hillary Clinton promised to ignite job creation with the largest U.S. infrastructure program since the Second World War and pledged to defend workers against unfair trade practices in a major speech on the economy delivered in Michigan on Thursday.
Speaking at an aerospace manufacturing company, the Democratic presidential nominee struck out at her Republican rival, Donald Trump, saying his economic ideas amounted to a giveaway to wealthy Americans like himself.
Ms. Clinton cast herself as the defender of middle-class Americans, referring to her own family history. "I am the daughter of a small-business owner and the granddaughter of a factory worker, and proud of both," she said. "Every American willing to work hard should be able to find a job that provides dignity, pride and decent pay that can support a family."
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Ms. Clinton delivered her speech just three days after an address on the same topic by Mr. Trump, who has shown a talent for tapping into the economic anxieties of Americans. Mr. Trump has said he would rip up trade agreements, slash corporate taxes and freeze regulations as a route back to prosperity.
For Ms. Clinton, the economy is a crucial but delicate issue. By objective standards, Americans are in far better shape than they were just six years ago, an improvement that Ms. Clinton would like to showcase as the achievement of a Democratic administration. But discontent is simmering among the electorate over a lack of access to economic opportunity, a dissatisfaction she must address.
To understand this apparent contradiction, look no further than the job market. The progress is undeniable: unemployment stands at 4.9 per cent, down from a peak of 10 per cent in 2009. The current jobless rate is within the range of what experts consider full employment in the United States – or the level at which people are out of work for only short-term, voluntary or skills-related reasons. Meanwhile, the economy has added jobs for 70 straight months – a prolonged stretch by historical standards – and recouped all of the positions lost during the Great Recession.
So why is this recovery frustrating? Beneath the headline figures are worrisome trends. "When you get into the weeds, you start seeing why people still don't feel happy," said Aparna Mathur, a scholar at the American Enterprise Institute, a conservative think tank in Washington.
Ms. Mathur and other economists are particularly disturbed by the fact that the proportion of working-age adults participating in the labour force has not bounced back to prerecession levels (people who are not in the labour force are not counted in the unemployment statistics). About 2.3 million workers are effectively missing, according to the Economic Policy Institute, a liberal think tank.
The prevailing hypothesis is that these Americans are so discouraged by their experience seeking work they are no longer even looking for a job. There are also indications some of them may be relying on disability payments to make ends meet.
"There are people on the sidelines who would join the work force if they were more certain that jobs were easy to find and decent jobs in particular," said Gary Burtless, a labour economist at the Brookings Institution in Washington. "If employers started to bid up wages, even modestly, more people would come out of the woodwork."
Adding to the dissatisfaction is a group of U.S. workers who are stuck in part-time jobs when they would prefer full time. Currently, six million people are in that category, a figure that is well above the level that prevailed before the 2007 recession – and indeed, higher than the preceding 15 years. That is not what anyone would expect to see in the seventh year of an economic recovery.
While economists tend to focus on the period since the most recent recession, voters have longer memories. The last time many U.S. workers felt the job market was booming was in 2000, when the unemployment rate briefly dipped below 4 per cent. A mild recession followed, but the ensuing recovery was not great for wages. Median family income in the United States, adjusted for inflation, remained 7 per cent lower in 2014 (the latest year for which figures are available) than it was in 2000. In other words, a swath of families has seen incomes stagnate or decline over the past decade and a half.
Meanwhile, some types of jobs simply have not returned to their prior strength. Elise Gould, an economist at the Economic Policy Institute, noted that the number of public-sector jobs in the United States remains lower than before the recession, a reflection of budget cuts at all levels of government. The country also has fewer public school teachers than in 2007, she said.
Another part of the problem: Even as unemployment has fallen, wages have not picked up notably. In July, average hourly earnings rose 2.6 per cent over a year earlier, a rate that represents an improvement on the recent past. But if demand for workers were truly strong, economists say, that figure would be above 3 per cent.
Dean Baker, co-director of the Center for Economic Policy Research, a liberal think tank, estimated that it would take another year of job creation – possibly two, depending on the rate – to enter a truly healthy labour market. That is one where, if "someone's got a job they don't like, they can quit it with the expectation of finding a new one in a reasonable amount of time," he said. "I just don't think we're in that picture."