Press Briefing by Secretary of Labor Robert Reich
The Briefing Room
12:39 P.M. EDT
SECRETARY REICH: Good afternoon. This is a great time to be Labor Secretary. The news is exceedingly good for American workers. In fact, the White House has celebrated by giving me a higher platform to stand on.
The great American job machine is back and humming. The economy has now created over 1 million jobs in the second quarter of this year, and nearly all of them are in the private sector.
We have to continue our efforts, obviously. There are 8 million Americans that were still unemployed, 5 million Americans who are working part-time and would rather be working full-time, but we are on the right track. It is steady, sustainable job growth, and that is exactly what the President set out to achieve.
Let me give you some key facts. First, jobs were up 379,000 additional jobs, net new jobs last month, in June. That is 97 percent of the gain, or 369,000, were in the private sector. In the first 17 months of the Clinton administration overall, the economy has now created 3.84 million net new jobs, and again, 92 percent of them in the private sector. Manufacturing jobs are up -- 34,000 new manufacturing jobs last month, and that is the highest increase in four years.
Now, equally heartening is the fact that this jobs recovery, this jobs expansion seems to be covering many industries, almost the entire country. It is spread across industries and regions. Auto jobs were up 10,000 this month, this last month, 56,000 over the past 12 months. This year, construction jobs have been up 184,000. And again, the news is very, very good.
Let me just say on final thing, and I say this as Secretary of Labor. I've spent a lot of the past year going around the country talking with average Americans, some of them unemployed, some of them hoping to get jobs, many of them worried about their jobs. There is a turnaround, a major turnaround.
I just got back from Memphis, Tennessee, yesterday and although there still problems -- I don't want to exaggerate; there are still people who are unemployed, as I said, 8 million Americans unemployed, almost 5 million working part-time who'd rather be working full-time -- there is out there in the country much more hopefulness, a sense that things are truly, truly turning around.
And this economic report is more than statistics, and I urge all of you in reporting this to report more than simply the raw data because it does reflect the central core goal of this administration, which is more jobs and better jobs and getting people into work, and making work pay. That's everything we're doing with regard to job training, with regard to education, with regard to proposals for welfare reform and health care. Again, work is the centerpiece of this administration, and we are on track.
A lot of naysayers said that the President's economic plan wouldn't work. Remember that a year ago, almost a year ago? They said that if you increase taxes on the top 1.2 percent of Americans, the economy will suffer. They said almost a year ago that the spending cuts were not real. THey said that the investments weren't real.
Well, I think we're providing that the President's plan was real; it is real. The President stuck to his plan. The President did not stray from the course he established. We are reaping the benefits. The American economy is reaping the benefits.
Now, let me take any questions you have.
Q: What about the service sector jobs? What percentage of the total jobs were they, and does that concern you at all?
SECRETARY REICH: Most of the new jobs are service sector, and there are two kinds of service sector jobs -- one, business services. Business services would include everything from management consulting to manufacturing, engineering. Business service jobs tend to be very good jobs. The other kind of jobs tend to be retail, restaurant service jobs. They also grew.
We do not have good data for this year. The household survey, as you know, beginning in January was new. But there is no reason to believe that this year is any different from the expansion we saw last year, and last year we do know that most of the new jobs were managerial, professional and technical jobs paying above average. And I expect that there was a continuation of that trend this year.
Q: If I can change, the Senate has a vote, a cloture vote scheduled Tuesday on striker replacement. It appears that those favoring the bill may be about four votes, or at least several votes short of the 60 you need. What's your latest reading on the prospects for the cloture vote on striker replacement?
SECRETARY REICH: Well, I'm not a political nose-counter but I can tell you that the President strongly endorses this bill. This administration is strongly behind the bill. You can't have collective bargaining if one side feels that a gun is held to its temple.
This country, since 1935, was premised in industrial relations on the idea of free, open, collective bargaining. And the President believes very, very strongly that the permanent replacement of striking workers is simply wrong, and it violates that core principle.
Q: He's kind of busy right now overseas. Will he be doing anything from there, as the key vote comes up, calling people?
SECRETARY REICH: The President will be very active as the key vote comes up. The President has already been active.
Q: Mr. Secretary, the bond market is reading this report as very strong evidence that the economy is overheating and that inflationary pressures are going to build and that the Fed will have to tighten credit further. What's your response?
SECRETARY REICH: Well, I can't speak about the Fed or the bond market, but I can say that with regard to inflation, the private sector is still forecasting low inflation. Most of the forecasts -- the blue chip forecast is under 3 percent this year, and there is simply no reason, based upon those private sector forecasts, to anticipate that this good news is going to translate into inflation.
Q: Mr. Secretary, this is usually a traditional time, of course, that housing construction and housing starts would be up. Are they up as much as you think because of the interest rates? According to testimony I heard this morning, they are not up as much as you would like, because of the interest rate situation.
SECRETARY REICH: Well, construction jobs are up generally. Now, there is some discussion about whether they're up as much as they could be, but let me say that we have seen, over the past year, a very major increase in housing construction, construction jobs up 184,000 overall. That is a very positive sign. And I wouldn't read too much into the individual job categories from month to month, because again, there is so much noise in that system. Overall, construction jobs are up, auto jobs are up, consumer durables are up. And as I said, managerial, professional, technical jobs we have reason to believe that they are all up.
Q: Do you see any effect at this point of the higher interest rates?
SECRETARY REICH: No. No, I don't.
Q: Not even in construction?
SECRETARY REICH: At this point, again, it's too early to tell whether somewhat higher interest rates have had any negative effect. But let me just say overall, we have had this past year the lowest level of inflation in 20 years. Let's be clear about the good news. There is rapid job growth. There is low inflation. We had over the past year from the first quarter of '93 to the first quarter of '94 a 2.7 percent increase in productivity. You can't get much better than this, folks.
Q: Secretary Reich, we had a later than usual survey date for these particular numbers. Are they skewed in any way by young people coming into the job market? And if so, by how much do you think they might be skewed?
SECRETARY REICH: No, they are seasonally adjusted for the summer. There is, because the payroll survey took place and takes place on the 12th of the month, and in June the 12th of the month was a Sunday, and therefore you got that extra week, that fifth week. So the total months figures are somewhat higher than they would be if that fifth week were not there. I think give or take 80,000 to 100,000 jobs might be subtracted from the total figure. But you're still, even when you do that subtraction, from 379,000 to -- let's say 300,000 or 290,000 -- you're still seeing very, very healthy, positive job growth.
Q: Could I just go back. Do you expect a cloture vote to be successful on striker replacement Tuesday?
SECRETARY REICH: Again, I can't say. I wish I was a better political nose counter. That's not what I'm paid to do.
Q: What do the nose counters who are paid to do that told you?
SECRETARY REICH: I don't know. At this point I don't know. We're hopeful.
Q: One other question about the pace of job growth. In the last three months, jobs being created at about -- a rate about 50 percent faster than they were in the previous six months. Doesn't that suggest that the economy, at least in terms of the job market, is growing much faster than anticipated, even when interest rates were raised a few months ago?
SECRETARY REICH: No, the jobs are growing as we would hope they would grow. You know, the first stage of an economic recovery, you normally get a lot of overtime. And you remember we went through a period of time where there was -- we called it a jobless recovery. We had a recovery, a lot of overtime. But employers were not yet confident enough to add jobs.
The second stage, they begin adding a lot of jobs. And we are now in that stage. At a third stage, sometime in the future, we'll see wages start moving upward. I think given productivity improvements that we've seen over the past year, there is plenty of room for wage improvements without worrying about inflation.
Q: Secretary Reich, the President just met with the new Prime Minister of Japan. Since the political situation in Japan has not been the most stable lately, how do you see the relation of the trade imbalance? Do you think you'll see a solution of that problem?
SECRETARY REICH: Well, you're out of my range of expertise on that, so I can't comment.
Q: Mr. Secretary, today's Joint Economic Committee -- (inaudible) -- Japanese -- the payroll may be overstated as much as 100,000 jobs. So could you tell me the credibility of this --
SECRETARY REICH: Yes, I mentioned that a moment ago. This is a technical survey issue. Because the payroll survey is taken on the 12th of the month, this month it was Sunday -- in June it was Sunday, that meant that they took that additional five week, beginning that week of the 12th of June, and therefore the 379,000 figure probably, if it were just a typical month, should be adjusted downward, I would say, probably in the order of maybe 80,000 to 100,000 jobs.
But even if you do that, you're still seeing very healthy, very positive job growth.
Q: Mr. Secretary, you said in the past that some of the gains in productivity could temper some of the wage pressures that could cause inflation. First of all, do you still believe that? And also, do you think there's a possibility, this being a productivity-led recovery could actually cause a tapering off in the growth in jobs?
SECRETARY REICH: Well, first of all, don't listen to me; look at the blue chip forecasters. They are forecasting inflation this year under 3 percent. Now, the second part of your question again, I'm sorry?
Q: Do you think that a productivity-led recovery like this actually could cause a tapering off? In other words, could --in job growth? In other words, could the productivity overtake the job growth because of good productivity that eventually jobs are not going to continue grow?
SECRETARY REICH: No, quite the contrary. Productivity allows for more wage increase. Productivity allows for potentially more jobs to be created because employers have the wherewithal to hire more people.
Productivity is good. The economic pie expands. And again, I want to stress to you all, the facts and the figures are absolutely with us. One million new jobs in the second quarter of the year. We are, in our great journey, to 8 million jobs we set out on. We are ahead of schedule. This is good news for Americans. This is good news for American workers.
Q: Well, when you say that job growth that's been shown over the last year or so is steady and sustainable, do you mean that the economy can keep on putting out 370,000 new jobs every month like this? Is that --
SECRETARY REICH: The economy is capable of continuing to generate a lot of jobs. Again, I want to stress the fundamentals are with us. You have 8 million Americans still unemployed -- 5 million working part-time, who would rather be working full-time. So on the supply side, if you pardon the expression, you still have a lot of jobs to go. And with regard to demand -- export performance in the United States has been good. If foreign countries, if our export partners continue to improve their economic performance, we'll have even more exports. More economic activity around the world is good news for Americans with regard to the possibility of more and better jobs.
All of the indicators are with us. Again, we could not have it better than low inflation, job growth at the pace we are, deficit reduction, assuming that Congress accepts the President's deficit reduction plan. That would give us three years in a row of deficit reduction. That's more than anybody since Harry Truman has accomplished.
So on all fronts, on all fronts, we are doing exceedingly well. And, again, I want to emphasize --
Q: But 370,000, that's big number. You don't mean to suggest that's sustainable.
SECRETARY REICH: I don't -- I think that rather than focus on particular numbers -- again, I want to emphasize -- we can't predict, and I'm certainly not going to try to predict exactly how many numbers we're going to have, how many jobs. There are only two kinds of people that make economic predictions -- those who don't know the future, and those who don't know they don't know. And I am in the first category.
But let me just say that we are seeing all the fundamentals are going exactly in the right direction. We can sustain additional job growth at this pace for the foreseeable future. Americans need this kind of job growth if we are going to put a lot of Americans to work. We -- again, don't trust me, look at the blue chip forecasters with regard to their anticipation of inflation under 3 percent. Last year, the lowest inflation we've had for 20 years.
So all systems go.
One more question.
Q: Can you do it, though, with interest rates going up as much as they are? You've got interest rates today that are higher than at any time since the President was elected. And that clearly is what the economy has depended on for the last year and a half for its growth.
SECRETARY REICH: Let me -- I am not going to comment on interest rates. But let me just say, let's count our blessings -- 1 million new jobs the second quarter, and all systems are moving in the right direction.
THE PRESS: Thank you.
END 12:58 P.M. EDT
William J. Clinton, Press Briefing by Secretary of Labor Robert Reich Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/269519