Wednesday, February 25, 2004

Can they find a good employment line?

Of all people, George W. Bush, a son of a one-term President, should certainly understand the importance of getting the script and the staging just right when it comes to demonstrating how committed he is to helping Americans get and keep good jobs. The economy was improving on Election Day 1992, but voters could still recall images of George Herbert Walker Bush buying four pairs of socks at J.C. Penney the previous Christmas season and exhorting them to shop their way out of bad times. Or how, as he prepared to tee off at a Kennebunkport, Maine, golf course in the summer of 1991, the elder Bush declared the recession over and then blocked funding to extend unemployment benefits. Though people understand their President can't guarantee their jobs, they want to know that he's doing what he can and that, at a minimum, he's paying attention.

So this President Bush makes sure to plant himself as often as possible on the factory floor, surrounding himself with happy workers—as he did last week at a window-and-door factory in Tampa, Fla.—and touting the job-creating power of his tax cuts, even as he acknowledges that many people are still out of work.

But as hard as Bush tries to show that he is both optimistic about the economy and empathetic to the plight of people who haven't felt the turnaround yet, there are some discomforting realities. Chief among them: Bush looks certain to go into the election with the distinction of being the first President since Herbert Hoover to see the total number of jobs shrink during his term in office.

Democrats point that out often, like whenever they move their lips. "Everywhere I go, I'm meeting people who are talking about working harder, working longer, not getting ahead, wages frozen, health-care costs going up. People feel very anxious, as manufacturing has slipped away," Democratic front runner John Kerry told TIME. "During Clinton, we had 23 million jobs created. That's almost 3 million a year. Under Bush, we've lost 3 million in three years."

It does not help that a White House that has set the modern standard for message management has been sending up flares in recent days that illuminate for the most jittery Americans the fragility of their situation. First came the observation by Bush's top economist Gregory Mankiw that outsourcing jobs overseas is "probably a plus for the economy in the long run." That may be true in theory, but the statement was so impolitic that even such staunch Bush supporters as House Speaker Dennis Hastert were furious. "An economy suffers when jobs disappear," Hastert said. And so do politicians.

Jobs have always made or broken the political fortunes of Presidents, yet outsourcing packs a powerful new wallop. That's because it hits middle- and upper-income workers—software engineers, X-ray readers, financial analysts—who thought they were immune to the great job exodus to Mexico and China that has decimated blue collars over the past 25 years. These are people who believed they were safe in a global economy, because they worked with their minds, not with their hands. "Outsourcing is the ultimate nightmare issue for the White House, because it's a problem that every voter understands. It's extraordinarily difficult to solve—and impossible to solve in the short run," says Bruce Reed, president of the centrist Democratic Leadership Council, who was also Bill Clinton's chief domestic-policy adviser. And while Bush can blame many of the economy's woes on the vicissitudes of war, terrorism and corporate scandals, outsourcing is one problem that won't go away when those do.

But even as the Democrats denounce the phenomenon, the proposals they offer do little more than attack it at the margins. Kerry calls for a study to examine the problem and possible solutions. He would discourage outsourcing federal contracts and would require employees from outsourced call centers to identify their location so that consumers can respond to that information as they see fit. (His own campaign was embarrassed by a firm it had hired that was routing calls to Wisconsin voters through Canada.) North Carolina Senator John Edwards would also try a combination of browbeating and suasion: he would create a new Office for Corporate Responsibility at the Commerce Department to encourage companies to keep jobs here rather than outsourcing them.

Outsourcing isn't the only jobs issue the Bush White House has uncharacteristically bumbled lately. Another political land mine exploded when the 417-page Economic Report of the President, sent to Congress under Bush's signature, delivered the staggeringly optimistic forecast that the economy would create millions of jobs this year. When asked about the prediction, Bush backed away, avoiding a question about the number after his Treasury Secretary and Commerce Secretary cast doubt upon it. Yet another section of the report raised the important question of whether making a sandwich at a fast-food restaurant (some assembly required) should be reclassified as a manufacturing job—a prospect that brought immediate comparisons to Ronald Reagan's disastrous effort to classify catsup as a vegetable on school-lunch menus.

In an election year, or any other time, no one wants to hear that his or her job is gone forever. What makes the jobs issue particularly potent this year is the fact that the states with the biggest manufacturing job losses happen to be such swing states as Michigan, Ohio and Pennsylvania. Administration officials tout Bush's plans to strengthen community colleges and career centers and provide up to $3,000 to help displaced workers find new jobs. But as Edwards likes to point out as he stumps for the Democratic nomination, that's little comfort if there are no jobs waiting in your community when you get out of school. A 2001 Labor Department audit found that only 1 in 5 who participated in programs for displaced workers found jobs for which they had been retrained; nearly 40% ended up working part time or for less than they had earned before; 28% had not yet found any work at the end of their training.

So how would the Democrats ease the pain of outsourcing? Both Kerry and Edwards have put forth a set of proposals that focus on the tax code—closing loopholes that make it more profitable to move jobs overseas, offering new incentives to keep them here. But no one believes that companies are moving overseas simply to save money on their taxes. So increasingly the nomination battle, which grew more intense last week with Edwards' surprisingly strong second-place finish in Wisconsin, is turning toward which candidate would do more to toughen trade agreements. It's a debate Bush campaign officials confidently predict will backfire on the Democrats. "We have a new economy, and they have yesterday's wrong ideas," said Bush campaign manager Ken Melhman. Maybe so, but if Bush can't convince voters he's got some ideas too, one job that might disappear come November is his.

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