Since the presidential race began more than a year ago, Donald Trump has missed few opportunities to castigate Hillary Clinton for the loss of U.S. manufacturing jobs.
He blames her for accelerating the job exodus by supporting the North American Free Trade Agreement with Canada and Mexico, which was initiated by President George H.W. Bush and signed by President Bill Clinton in 1993.
It’s prudent to resist giving American presidents too much credit or blame for the economy’s performance. Success often depends as much on luck and timing as on smart policymaking, and correlation is not causation. But it’s fair to ask what happened to manufacturing workers since Nafta and during the presidencies of the men who preceded and followed Clinton into the White House.
Manufacturing jobs increased under each of the seven Democrats and decreased under the six Republicans who became president during the past eight decades, according to data compiled by Bloomberg. Even as U.S. employment expanded – as it did under every president since Franklin D. Roosevelt – manufacturing jobs declined only under Republican presidents.
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The gains were greatest during the tenures of Roosevelt, Harry Truman, John F. Kennedy and Lyndon B. Johnson – an average of more than 20 percent for each Democratic presidency. The largest losses occurred with Presidents Ronald Reagan, George H.W. Bush and George W. Bush – an average of 9 percent. That’s since 1939, the first available year of data from Bloomberg’s compilation of U.S. Bureau of Labor Statistics measures of employees on non-farm payrolls in manufacturing and other jobs.
Nafta, which took effect in 1994 at the beginning of the Internet boom, an exuberant stock market and a budget deficit that would be transformed into a surplus, “did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters,” according to the nonpartisan Congressional Research Service in a 33-page report published last year. Whatever impact Nafta had, the economy during Clinton’s two terms was the best of any modern president as measured by the record 20 million jobs created from 1993 through 2000. During the same period, the nation added 366,000 factory workers, a 2.2-percent increase, as gross domestic product expanded by an average of 4 percent annually. (Remember the warnings by the independent presidential candidate Ross Perot that Nafta would set off “a giant sucking sound,” draining millions of jobs to Mexico?)
The biggest decline in manufacturing jobs occurred under George W. Bush: About 2.9 million, or more than 18 percent. That was despite the addition of 3.5 million jobs overall, a 2.9 percent rise from 2001 through 2008. The period was marked by tax cuts that helped wipe out the budget surplus, the terrorist attacks of Sept. 11, 2001, wars in Afghanistan and Iraq, the sub-prime lending debacle that devastated the housing market, the ensuing financial crisis and the onset of the worst recession since the Great Depression when GDP declined 2.1 percent in the last quarter of 2008.
The 12 years of the Reagan and Bush administrations proved to be the second-worst period for factory labor. Between December 1981 and December 1992, manufacturing jobs declined 8 percent as total employment increased 20.5 percent, to 109 million jobs. The 1980s began with surging interest rates, financial deregulation and a recession with the highest unemployment rate since the Depression, peaking at 10.8 percent. A mid-decade boom was interrupted by the 1987 stock market collapse, the worst since 1929. By 1989, the unemployment rate had declined to 5.0 percent before rising to 7.8 percent in 1992.
Roosevelt’s last 6 1/2 years in office and the almost eight years of Truman succeeding him put the U.S. on an unprecedented global trajectory. World War II pulled the economy out of the Depression and transformed the U.S. into the world’s dominant manufacturer. Factory labor surged 60.5 percent, adding 6 million workers, as total employment rose 59.1 percent and created 18.6 million jobs.
By 1952, the stimulus from World War II was all but extinguished as Dwight Eisenhower was poised to negotiate an agreement ending the Korean War. After bottoming at 2.5 percent in June 1953, the unemployment rate almost doubled as GDP grew 3 percent annually during his two terms through 1960 and total employment rose 8.1 percent. The manufacturing workforce declined 4.1 percent with 634,000 jobs lost.
The Kennedy and Johnson years were marked by prosperity. It was stimulated initially by a tax cut and then spending on Great Society social programs and the Vietnam War. Between 1961 and 1968, more than 3 million manufacturing jobs were created – a 20.3 percent increase – as total employment climbed 26.2 percent to 69.2 million. The unemployment rate was down to 3.4 percent by the end of the decade and many economists were convinced the robust economy could be managed indefinitely.
While Richard Nixon and Gerald Ford continued to expand the government stimulus started by their predecessors, the 1970s economy was buffeted by two recessions, a series of oil shocks that quadrupled the price of gasoline, and runaway annual inflation rates exceeding 10 percent. Even as total employment increased almost 13 percent to 80.4 million from 1969 to 1976, factory labor declined 4.1 percent as 766,000 jobs were lost.
Jimmy Carter presided over a partial reversal of the manufacturing decline, adding 109,000 jobs, a 0.6 percent increase. Between 1977 and 1980, total employment increased 7.7 percent to 90.9 million from 84.4 million. The worst of the inflation was addressed with his appointment of Paul Volcker as chairman of the Federal Reserve. But Volcker’s successful monetary policy came at the expense of slowing GDP as the Fed raised interest rates enough to put the economy on the brink of another recession.
By comparison to each of his predecessors, Barack Obama inherited the worst economy of the past 80 years. The 2.1 percent decline in GDP during the last quarter of 2008 was unprecedented in modern times. The unemployment rate doubled to 10 percent in 18 months between April 2008 and October 2009 and the stock market, as measured by the Standard & Poor’s 500 Index, lost more than 53 percent of its value from the end of 2007 to March 2009. Given the extent of the damage, the ensuing recovery, though slower than the rebound from earlier recessions, was pronounced. Some 806,000 manufacturing jobs have been created during his two terms, a 7 percent increase between the end of 2009 and last month. Total employment, meanwhile, rose 11.4 percent, or by almost 15 million new jobs.
So the next time Trump asks about manufacturing jobs, tell him they’ve gone up only under Democratic presidents.
Winkler, editor-in-chief emeritus of Bloomberg News, writes about markets.