President Trump's Pledge to Create 25 Million Jobs

[kevinwidrow]

Promises, Promises...

    With 2016 coming to a close, historians and political scientists have already begun and will no doubt continue to dissect a presidential election like no other. And yet, despite all the noise and hang-wringing and fake-newsing and tweet-storming, in the end, the election of Donald Trump must ultimately distill down to the basics of any presidential election: the people cede executive power to the President for four years on the assumption that he or she will follow through on promises made during the campaign. When we collectively pulled the lever in the voting booth on November 8th and when Mr. Trump swears on his bible on January 20th, we sign the contract that rests at the center of American democracy.

    Four years from now, the contract comes up for renewal. Four years from now, we will have to consider if the promises made were kept. Donald Trump vowed to do many things which flaunted or skirted all sorts of political norms: for example and most famously “building a wall” (Trump, 2016). These sorts of promises fit perfectly into a Trump political trademark built around disruption and breaking the mold. But ironically, in one crucial aspect, Trump promised something entirely in keeping with political norms when he stated quite clearly: “The Trump economy: 25 million new jobs over the next decade.” (Trump, 2016b)

    So let’s leave aside all the rhetoric and focus on Trump’s “job creation” promise so paramount to the economic well-being of the American people. Fortunately, his pledge to create 25 million new jobs will be easy to verify over time. The US Bureau of Labor Statistics (BLS) releases on the first Friday of every month an accounting of the number of people employed across all sectors of the economy. Here are the details (as of data released for November 2016): total non-farm employment stood at 145.1 million, of which 22.2 million are government employees, 19.6 million work in the goods producing sectors (manufacturing, construction, mining), leaving the bulk of Americans, 103.2 million, employed in the service sector.

 (N.B.: all of the figures quoted throughout this article come from the November 2016 BLS release)

    At this stage, the obvious first question to ask would be how feasible is it to create 25 million new jobs over the next decade. 25 million being a large number and a decade being a relatively long period of time, it simplifies things to think of this Trumpian bargain in terms of jobs created per month, i.e. 208,000. To put this in perspective, over the last 35 years, the US economy has created on average 126,000 jobs per month. President-elect Trump clearly will have his work cut out for him.

    Importantly, focusing on the BLS “total employment figure” sets the lowest bar possible for Trump to jump over. In theory, we could assume he means to create 25 million private sector jobs. Looking again at the data since 1981, the US economy has created on average 112,000 jobs per month private (non governmental) employment. And despite rhetoric ringing across the Rust Belt, not even Donald Trump could reasonably expect to create 25 million manufacturing jobs over the next decade. Since 1981, the US economy has shed on average 15 thousand manufacturing jobs per month. Currently, 12.3 million Americans are employed in manufacturing.

    Leaving the incoming President with a target of creating 208,000 jobs per month across the entire economy then remains the easiest goal to attain and the most realistic – this is the bottom-line number to which he must be held accountable. How did previous administrations do relative to this goal ? Turns out only one President in the last 35 years hit the mark. During the 8 years of the Clinton administration, the US economy created 242,000 jobs per month. Reagan came second at 166,000 (well short of the Trump target) and Obama ranked third at 108,000. The two Bush administrations lagged badly creating just 54 and 22 thousand jobs per month. If Donald Trump does indeed achieve his goal over the next four years, it will be a strong argument in favor of giving him another mandate.

    As an aside, but one which certainly provides some interesting perspective, following is a summary of President Obama’s job record compared to the average since 1981:

	During Obama Administration	Since the "Great Recession" (June2009)	Since 1981
Total Non-Farm Employment	108,000	159,000	123,000
Government	-3,000	-4,000	14,000
Goods Producing	-7,000	14,000	-12,000
Manufacturing	-6,000	6,000	-16,000
Services	119,000	148,000	121,000

(N.B.: all figures are monthly average job creation.)

    A few things to note:

• Private sector job creation (total employment minus government employment) during the Obama administration was almost exactly equivalent to the entire period from 1981 to the present.
• Government employment actually shrunk during the Obama years – the only time this has been the case since 1981.
• While manufacturing jobs have shrunk by an average of 16,000 per month since 1981, since the end of the “Great Recession” they have increased by 6,000 per month.
• Obama failed according to the “Trump 25 million job” over either his entire administration or even since the end of the Recession.

    If this can be read as a mixed result, once again, it’s all the more imperative to hold the incoming President to his clearly stated and oft-repeated standard: 208,000 jobs created per month.

For my part, I promise to be back on a quarterly basis to see how he does.

========================================================SOURCES===============================================================================
 
Bureau of Labor Statistics (2016), US Department of Labor, Bureau of Labor Statistics (Online) Available: www.bls.gov/bls/exit_BLS.htm?a=true&url=http://www.dol.gov/ (December 30, 2016)

Trump, D. (2016) Trump-Pence Make America Great Again (Online) Available: www.donaldjtrump.com/policies/immigration/ (December 30, 2016)

Trump, D. (2016b) Trump-Pence Make America Great Again (Online) Available:
www.donaldjtrump.com/press-releases/fact-sheet-donald-j.-trumps-pro-growth-economic-policy-will-create-25-milli (December 30, 2016)