Clinton’s Economic Policy
Introduction
The United States is always considered a superpower in the global arena for its political, military and economic power. A strong economy is the key to growth and development of any nation. The United States always focused in improving its economic structure by following important policies. There was a time when the US went through periods of recession. However, it managed to recover with strong initiatives taken by its leadership. President Bill Clinton will be remembered for the longest business cycle expansion in America history. The country was going through a recession, when Clinton assumed office. However, the situation took a dramatic turn after he became the President. The United States witnessed a high economic growth during the nine and a half years of his tenure. Clinton served as the President of the United States from 1993 to 2001.
This paper will focus on the policies adopted by Bill Clinton to revamp the US economy. There are several aspects of Clinton’s internal policies that reshaped the economy, reduced unemployment and improved business and trade. The paper will also discuss how Clinton achieved the lowest unemployment rate in 30 years. The main objective of the paper will be to provide a deep insight into Clinton’s economic policy that made the country financially stronger and secure than ever.
Creation of Jobs
The most important achievement of Clinton was to make the strategies to lower unemployment rate. When Bill Clinton was elected as President, the American economy was in all sort of trouble. There were barely new jobs and wages were stagnant. “The unemployment rate was at its peak with 7.5 percent. Clinton focused on the following three objectives:
§ Fiscal discipline
§ Investing in education, health care, science and technology
§ Opening foreign market” (Cohen, 2000)
Bill Clinton has the unique record of creating most number of jobs than any other US President. Clinton had realized that it was necessary to focus on the above areas in order to address the problem of unemployment. His strategies helped foster the conditions for the longest expansion in the US history. “The Clinton Administration created 20.8 million new jobs between 1993 and 2001. That is the most jobs ever created under a single Administration. During Clinton’s tenure, the US economy added an average of 248,000 jobs per month” (Headlee, 2002). It is the highest of any President in the US history.
Clinton had given emphasis on the private sector. After making an analysis on the job prospects in the country, Clinton noticed that there were vast opportunities in the private sector. It was not possible to add more jobs to government sector because of the limitations of the government. However, private sector did not have such limitations. “About 92 percent of the new jobs were created in the private sector. A total of 19.2 million jobs were added to private sector during Clinton’s tenure” (Headlee, 2002).
Under Bill Clinton, the US economy had achieved the lowest unemployment rate. The skyrocketing unemployment rate fell to 4.0 percent, which was the lowest in three decades. It continued to fall for seven years in a row. During Clinton’s tenure, the unemployment rate remained below 5 percent for 31 months in a row, which is a record. The Clinton Administration gave special attention to women’s employment. “It encouraged the participation of women in private sector. As a result, the unemployment rate for women was 4.2 percent in 2000. It was the lowest unemployment rate for women in the US since 1953” (Pigeon and Randall, 2000).
Another milestone achieved by the Clinton Administration was to lower the unemployment rate for the African American and Hispanic people. “Between 1980 and 1992, a small number of people belonged to the elite class witnessed increase in income and employment” (Clinton & Randy, 1998). However, the economic gap between the rich and the poor widened further. Unemployment for African Americans and Hispanics reached a record high. The poverty rate for African Americans remained at or above 30 percent. Under President Bill Clinton, unemployment and poverty rates declined for all groups. The Clinton Administration created more opportunities for African Americans and Hispanic population. It also provided them access to higher education and job training. Loans were provided to minorities to establish businesses. “Under the Clinton Administration, the unemployment rate for African Americans fell from 14.2 percent in 1992 to 8.2 percent in 2000. Similarly, the unemployment rate for Hispanics fell from 11.6 percent in 1992 to 5.6 percent in 2000” (Headlee, 2002).
President Clinton worked to ensure equal pay for both men and women in order to close the wage gap. There was a huge gap between the wages of men and women and that discouraged women from joining the workforce of the country. “Clinton convinced the Congress to provide a budget of $20 million for the National Science Foundation that provided grants to post-secondary institutions and partner organizations. The main objective of the foundation was to provide assistance to enforcement staff that worked to ensure equal pay and employment to all” (Cohen, 2000).
Clinton employed a large number of women and minorities to the levels of government. There had been attempts by successive governments to employ women and minorities in the top levels of government. However, they failed to achieve their objective. “When President Clinton assumed office, there were just two women and two minority officials in the government. Clinton appointed seven African American Cabinet Secretaries. During his tenure, women made up 44 percent of the total Administration appointees” (Pigeon and Randall, 2000). Madeline Albright became the first woman Secretary of State. Several African Americans were appointed to federal judgeships. The large-scale employment of women and minorities in the government inspired others to a great extent.
Clinton’s period witnessed a rapid growth in construction jobs in 50 years. In the past, the construction sector in the United States was neglected despite the fact that it had the highest potential to generate employment. Bill Clinton acknowledged that construction sector would play an important role in reducing unemployment in the United States. “During his tenure, 2 million new construction jobs were added” (Headlee, 2002). Such a faster growth was never witnessed in the US economic history. The newly created construction jobs helped the country to lower its unemployment rate to considerable extent.
President Bill Clinton also managed to achieve the fastest and longest real wage growth in 30 years. Clinton focused on all the important points in order to ensure a lower unemployment rate. During his tenure, the average hourly earnings had significantly increased. The United States witnessed five consecutive years of real wage growth under Bill Clinton. The growth in real wages was the fastest in 30 years of the US economy.
Under the Clinton Administration, not only the unemployment was reduced, but also family income was increased. “When Clinton became the President of the United States, the unemployment rate in the country was 7.4 percent. However, he managed to bring it down to 4.0 percent” (Headlee, 2002). The creation of more employment during Clinton’s tenure significantly contributed to an increase in family income.
Bill Clinton believed that it was necessary to focus on education in order to help the youth in getting employment. “He announced a program called the President’s Direct Student Loan program. Under this program, students could borrow money directly from the government at a lower interest rate with flexible repayment options” (Pigeon and Randall, 2000). The scheme was a huge success and students in the US were provided opportunities to get requisite knowledge and skill set, that would help them in getting employment in various sectors.
Clinton encouraged foreign companies to expand their base in the United States. The United States always advocated globalization. After the WTO came into force in 1995, the Clinton Administration had decided to offer more freedom to foreign companies to operate on the American soil. He made amendments in the law to offer hassle-free functioning for the foreign companies in the US. “The relaxation in tax and licensing procedures were some of the major initiatives taken by Bill Clinton. With the expansion of foreign companies, more employment opportunities were created for the Americans” (Clinton ; Randy, 1998). New companies that started their operations during Clinton’s tenure recruited a large number of employees in their organizations. It was a significant step towards the creation of employment opportunities in the United States.
Conclusion
Bill Clinton has been admired for his economic initiatives that helped the American economy recover from a long period of recession. The most important achievement of the Clinton Administration was the lowest unemployment rate in three decades. Creation of more jobs was his main objective and he succeeded in it. He made effective strategies to lower unemployment rate. He got the credit for creating over 20 million jobs within nine and a half of years of his rule. His emphasis on private sector resulted in large-scale employment for the youth in the United States. About 92 percent of new jobs were created in the private sector during Clinton’s tenure.
Clinton not only lowered the unemployment rate in general, but also he achieved the unique distinction of lowering the unemployment rate for the African Americans and Hispanic people. He employed many women and minorities to the top levels of the government, which became a source of inspiration for others. In order to encourage women to take up jobs, Clinton reduced the wage gap between men and women. Under Clinton, the US economy witnessed the highest job growth in the construction sector. There was also a steep increase in the real wage growth. Another milestone achieved by Clinton was the increase in family income. Clinton also provided education loans to students so that they could get adequate knowledge and skill set required for employment. In order to generate more employment for Americans, Clinton encouraged foreign companies to set up new establishments and to expand their existing base in the country. All the policies and initiatives made by Clinton succeeded in creating a conducive atmosphere for large-scale employment and positive economic growth.
Bibliography
Clinton, Angela ; Randy E. Ilg. (1998). Strong Job Growth Continues, Unemployment Declines in 1997. Monthly Labor Review, Vol. 121.
Cohen, Stephen D. (2000). The Making of United States International Economic Policy: Principles, Problems, and Proposals for Reform. Westport, CT: Praeger Publishers.
Headlee, Sue. (2002). A Year Inside the Beltway: Making Economic Policy in Washington.
Westport, CT: Praeger Publishers.
Pigeon, Marc-Andre, L. ; Randall Wray. (2000). Can a Rising Tide Raise All Boats? Evidence from the Clinton-Era Expansion. Journal of Economic Issues, Vol. 34.
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