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ISR Issue 58, March–April 2008


The good old days?

The 1990s wasn’t a boom time for American workers


PRESIDENTIAL CONTENDER Hillary Clinton claims in her campaign rhetoric that the 1990s under her husband’s presidency were a boom time for American workers, in sharp contrast to the lean Bush years. Much of Hillary Clinton’s support among Latino voters, up until recently, has been attributed to the alleged economic legacy of the Clinton presidency. Typical of the Clintons’ boasting was Bill Clinton’s declaration in a January campaign ad for Hillary: “The 1990s were a time of prosperity. We created more than twenty-two million new jobs, moved eight million people out of poverty, and turned our economy around. It’s time for another comeback, time to make America great again. I know Hillary’s the one who can do it.”

There is no doubt that the Clinton years were largely a period of economic growth, but were the 1990s the boom time for American workers that the Clintons claim?

Bill Clinton was elected president in 1992 on a wave of discontent with the Reagan era and it’s lesser second act, the presidency of George H. W. Bush. After a decade of union-busting and declining incomes for all but the wealthy, Americans wanted a change in the country’s priorities. Bill Clinton’s 1992 presidential campaign’s most famous slogan was “Putting People First.”

Clinton was also a representative of the conservative turn of the Democratic Party, begun in the 1980s and led by the Democratic Leadership Council, to make the party (which he called the “New Democrats”) friendlier to Corporate America. Clinton was a major supporter of a neoliberal free market agenda that included smaller government and was buttressed by an ideology of “personal responsibility.” But in order to get elected, he made major promises to working-class people, including universal health care, a family medical leave act, and a striker replacement bill to prevent the permanent hiring of scabs during a strike. In the end, Clinton broke virtually every major promise that he made to America’s workers. Robert Reich, Clinton’s first secretary of labor, later revealed: “We essentially have collaborated [with] and responded to the business community.” This “collaboration with the business community” meant that life in the 1990s would become increasingly difficult for working-class people in the United States.

From 1993 to 1995, more than 8.5 million workers lost their jobs through downsizing or the wholesale closing or merging of companies, despite the economic recovery of that period. This was the so-called “jobless recovery” of the first two years of the Clinton presidency. Fear and anxiety were widespread among American workers, particularly among older workers. This was made even worse by Clinton and the Democratic-controlled Congress’ refusal to even raise the minimum wage. In March 1994, the New York Times published a four-part series called “Staying afloat” about the struggles of full-time, low-wage workers. The Times followed up with a special report called “Job insecurity: Even in good times, it’s hard times for workers,” in July 1995, which concluded that “many problems that workers faced only in bad times have become fixtures in all times: Some wages are still falling, people must be ready to work twelve-hour shifts and six days a week, and no job is for keeps.” Newsweek magazine summed up the feelings of the time with its cover story in February 1996, “Corporate killers: Wall Street loves layoffs. But the public is scared as hell.”

It was Clinton’s “jobless recovery” combined with his broken promises—particularly the failure of health care reform (an initiative that had been led by Hillary Clinton)—that led to the triumph of the Republicans in the 1994 elections. Clinton’s unwillingness to overcome the opposition to health care reform by conservative members of his own party (and by the health care industry) doomed his program. As a result, the number of uninsured in the U.S. grew from 39 million to over 45 million during his presidency. The triumph of the Republicans gave Corporate America the encouragement to carry through a second wave of union-busting, building upon their successes under the Reagan and Bush administrations.

But Clinton also encouraged big business’s attack on the labor movement by refusing to push for passage of the striker replacement bill. In sharp contrast, Clinton pulled out all the stops to pass the North American Free Trade Act (NAFTA) in 1993, to shape the World Trade Organization (WTO—founded in 1995), and to normalize trade relations with China in 1999—all to the benefit of Corporate America, which moved millions of manufacturing jobs overseas. Clinton also used provisions of the reactionary National Railway Labor Act (NLRA) fourteen times during his presidency to prevent workers in the airline and rail industries from going on strike, contributing significantly to the weakening of these unions.

For American workers, Clinton’s “jobless recovery” was followed by the “joyless recovery” the following two years, as unemployment declined agonizingly slowly, at the same time wages stagnated, and health and pension benefits were severely cut back or disappeared altogether. Profits and CEO pay exploded to obscene levels, however. The compensation (pay, benefits, and stock options) of America’s CEOs during the 1990s went from 85 times what the average blue-collar worker received to more than 475 times what blue-collar workers received in 1999. Jack Welch, the CEO of General Electric and golfing buddy of Bill Clinton, was paid in 1997 more than 1,400 times the average wage earned by the declining number of blue-collar GE employees in the United States. The richest 1 percent of the people went from controlling 35.7 percent of the country’s wealth in 1989 to over 40.1 percent in 1997. Fortune 500 corporations were earning record profits. The notorious Caterpillar corporation saw its profits soar by 155 percent from 1993 to 1997. UPS, the largest transportation company in the U.S., which pioneered part-time work in the 1980s resulting in two-thirds of its workforce becoming part-time under Clinton, had records profits of $1 billion in 1996.

While the rich were getting obscenely richer under Clinton, he led an attack on some of the most vulnerable and vilified people in our society—welfare recipients. In 1996, he ended “welfare as we know it.” During the next several years, the welfare caseload was cut in half and with most joining the ranks of the working poor, while millions of other poor people were hidden away in America’s exploding prison population. According to a report by the Children’s Defense Fund, the number of children living in poverty increased in the year after Clinton ended welfare by 426,000.

A booming stock market, deregulated industries, declining unions, a cult of the billionaire investor, attacks on the remnants of the anemic welfare state, and a soaring prison population (disproportionately Black and Latino)—this was dubbed the “New Economy,” “the American model,” or the “Washington consensus” by Clinton and his economic advisors. This massive disparity of wealth led even conservative commentators like Edward Luttwak to describe Clinton’s New Economy as taking us back to a “Victorian pattern of income distribution.” One British admirer of Clinton’s policies who wanted to import them to the UK described the United States as a “land of grotesque inequality.” Instead of being ashamed of this, Bill Clinton was a great enthusiast for this model of economic growth and increasingly pressured the rest of the world to accept it. Not just through trade agreements, but by constant lecturing on the superiority of the American model. In June 1997, Clinton attacked France and Europe in general at a meeting of economic policy makers in Denver for the “rigidities of their markets”; that is, having a more generous welfare state and stronger unions.

The economy boomed in the late nineties, with unemployment reaching historic lows. Wages, after years of lagging behind economic growth, finally began to rise. However, a majority of the twenty-two million jobs created during the Clinton years paid less than $7 an hour. The reality was that Clinton played his role in helping to create a low-wage, low-benefit economy. The number of working poor increased under his watch. According to a 1999 report compiled in part by the National League of Cities and the National School Boards Association, “The number of children in working poor families leaped by one-third from 1989 to 1997, despite a booming economy and a twenty-five-year low in the nation’s unemployment rate.”

Clinton’s domestic and international policies produced a lot of resentment and literally blew up in his face at the Seattle meeting of the WTO in November 1999. Police attacked thousands of trade unionists and global justice activists who gathered to protest policies that were making the lives of tens of million of people around the world increasingly miserable. What the 1997 UPS strike did to reveal the inequalities of American society, the “Battle of Seattle” for a short time, did to bring a global perspective to the same issues. Soon after the U.S. economy began to slide into recession. After two terms of Bush the Second, the Clinton era may seem to be a distant land of prosperity and competence in high office. This is the mythology of the Democratic Party. Yet, a closer look reveals that the Age of Clinton and Age of Bush have more in common than their campaign rhetoric would lead one to believe. Today, when both Clinton and Obama are trying to outdo each other in campaign promises in order to secure the nomination, the history of the Democratic Party in power and the gap between rhetoric and performance needs to be remembered.

Joe Allen is a regular contributor to the ISR.

Further reading on the Clinton years and the U.S. working class:

Subterranean Fire: A History of Working-Class Radicalism in the United States, by Sharon Smith

“Contradictions of the ‘Miracle’ Economy,” by Joel Geier and Ahmed Shawki, International Socialist Review 2 (Fall 1997).

One Market Under God, by Thomas Frank

“Eight Years of Clinton-Gore: The Price of Lesser Evilism,” by Lance Selfa, International Socialist Review 13 (August–September 2000).

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