Hillary Clinton’s Big Jobs Mistake
Hillary Clinton’s statement today about jobs and the economy, which she made during her first stop as the presidential nominee of the Democratic Party, inadvertently gave millions of unemployed and underemployed American workers another reason to keep the race against Republican lunatic Donald Trump closer than it should be.
I winced today as I watched Secretary Clinton say this after she visited Hatfield, Pennsylvania, where she had met the owners of K’NEX, a family-run toy manufacturer:
“They have [open] jobs but they need people who have the skills. And I looked, and there’s one million open jobs in America right now that aren’t being filled. Jobs for machinists, and welders, and tool and die makers, and coders, and all kinds of jobs…We know those are the jobs of tomorrow,” Clinton said. “Trump offers the false promise to turn back the clock to the jobs of yesterday.”
Thankfully, Clinton went on to smartly describe her sensible proposals for free community college, more internships and technical education programs.
But here’s the problem:
Secretary Clinton’s claim that there are a million or more open jobs has been thoroughly debunked many times, including by Paul Krugman and others. Repeating that false claim drives skilled but unemployed workers up the wall and is hardly the way to win their votes.
Nonetheless, Secretary Clinton says she “looked” and discovered there are a million open jobs. But where, exactly, did she look? There is at present no reliable measure or even a reliable estimate of the number of open jobs in this country. What we do have instead are seriously flawed measures, most of which are based entirely on representations made by employers, including calculations of the number of help wanted ads published online. Unfortunately, (I am truly disappointed Secretary Clinton’s advisers have apparently not briefed her on this) these days, in the modern economy, employers, and particularly the biggest employers, have many reasons to mislead others when it comes to their hiring plans. Looking at the number of help wanted ads is, in particular, a notoriously poor way to understand actual labor market conditions. In today’s world, employers often place help wanted ads because:
- Public companies are under enormous pressure to always claim they are hiring “highly qualified applicants” even when they are cutting headcount. If the companies don’t say they have “open positions” stock market analysts (I used to work for CNBC.com) may conclude the company does not expect much growth and the stock may be downgraded. To avoid that, virtually all public companies these days routinely say they have robust hiring plans even when they don’t. Enron supposedly had thousands of job openings right before the company went belly up. Watch what these companies do, not what the CEOs say.
- Employers sometimes run help wanted ads just to see if they can lure workers from a competitor, sometimes just one specific worker or type of worker. The actual number of job openings can be more limited than it appears.
- Employers often run help wanted ads to create the impression they are growing in order to attract investors or boost their stock price. Big companies often use help wanted ads as a form of image advertising, as was documented by a congressional investigation conducted during the Reagan administration. That investigation was prompted by Congresswoman Nancy Pelosi, among others, and led to procurement reforms that stopped defense contractors from using public funds to run phony help wanted ads. There is at present nothing that prevents private sector firms from running phony help wanted ads that are in reality image ads.
There are more reliable indicators of health in labor markets than the often intentionally misleading claims of open jobs. Those measures include the total age-adjusted labor market workforce participation rate, the rate at which employed individuals switch jobs, rates of increases in average pay in job categories, and overall growth in consumer or public sector spending. By these measures, most Americans are still not tripping over the open jobs that Secretary Clinton insists exist. Likewise, workers who have lost jobs to automation understand something too many Washington, D.C. Democratic Party think tankers have yet to grok: advanced manufacturing is no jobs panacea. The “advance” in “advanced manufacturing” comes from producing more and more high-quality products with fewer and fewer workers. The better “advanced manufacturing” becomes the fewer workers it will employ. Promising unemployed workers their prospects will be improved by advanced manufacturing is like telling the forest it will be improved by the fire.
What we need in this country, and increasingly around the world, instead is a frank and honest discussion about what appear to be permanent changes in global labor markets and patterns of production, a growing trend of surplus labor around the world, and the need for creative ideas about how technology-mediated improvements in productivity can be harnessed to increase rather than reduce overall standards of living. The candidate who discusses those issues, who at least acknowledges those challenges, will be the candidate talking about the “jobs of the future” — which may or may not include the “tool and die makers, welders,” or even the “coders” Secretary Clinton mentioned today.
At a minimum, though, Secretary Clinton should drop the counterproductive line about “a million open jobs.” There is no way to document whether those “open jobs” really exist. There are lots of reasons to think many if not most of them are, at best, a mirage. It would be a snap, however, to find a million or more unemployed or underemployed struggling American “machinists, welders, tool and die makers, coders, and all kinds of [workers]” who now have one more reason to doubt whether Secretary Clinton really understands what has happened to them or their families. That the open jobs paying good wages they need are really not there. Denying the frustrating, often humiliating reality that confronts skilled, unemployed or underemployed American voters will only drive more of them into the arms of the reprehensible Donald J. Trump.