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The 2016 Race

The Arithmetic in Donald Trump’s Jobs Plan Doesn’t Really Work

Donald Trump speaking at the Economic Club of New York at the Waldorf Astoria Hotel in New York on Thursday.Credit...Damon Winter/The New York Times

Here’s one thing to like about Donald J. Trump’s speech at the Waldorf Astoria Hotel on Thursday: He cast attention on what really is one of the defining economic challenges of our era, slow growth.

Mr. Trump would like to “establish a national goal of reaching 4 percent economic growth,” as he told the Economic Club of New York. He says s his economic plan will generate 3.5 percent growth and 25 million new jobs over the next decade.

Here’s what he gets right. Growth in the United States (and the entire advanced world) has been well below its post-World War II norms since the turn of the century. From 1947 to 2000, the United States economy expanded at an average of 3.6 percent a year. Since then it has been 1.8 percent.

It’s probably true as a society that we’ve become too accepting of sluggish growth, even if everyone has different theories of how to fix it. The problem is that when you dive into the math around jobs and G.D.P., it becomes clear how unlikely the country is to meet Mr. Trump’s goals. And that’s true even if you believe his agenda would be good for the economy.

As a simple matter of arithmetic, G.D.P. boils down to how much people are working, and how much economic output is generated for each unit of work. Let’s start with how many people will be working after Mr. Trump tries to make America great again, where he was most specific in his forecasts.

The more workers you have, the more hours people will work and the more stuff you’ll make. Demography is really important to shaping how high G.D.P. can grow. For example, those shiny growth numbers in the second half of the 20th century were helped along by millions of women entering the work force.

Right now there are 152 million Americans working. The Congressional Budget Office projects that number will be 159 million in 2026, at the end of the 10-year window Mr. Trump talks about.

The C.B.O. bases its forecasts on demographic modeling. If it’s right, that’s a rise of only seven million in employment, a far cry from the 25 million Mr. Trump envisions. So he would have to find huge numbers of extra workers somewhere.

The most obvious source is to pull from the legions of adults who aren’t in the labor force, who currently neither work nor look for work. And their numbers have soared since the 2008 recession. “Right now, 92 million Americans are on the sidelines, outside the work force, and not part of our economy,” Mr. Trump said, according to the prepared text of his speech. “It’s a silent nation of jobless Americans.”

But the problem with that number (it actually is 94 million, if he’s referring to the Bureau of Labor Statistics number for adults not in the labor force) is that it includes a lot of people who aren’t working for good reason: They’re high school and college students; stay-at-home parents; people who are disabled; retirees.

When you look at how many of those people would be working in a completely healthy economy, the numbers look a lot smaller. For example, at the record high, the proportion of 25-to-54-year-old Americans who were working was 81.9 percent (that was in April 2000, when the economy was in an all-out boom). If we returned to that ratio immediately, from the current 77.8 percent, it would add about 5.2 million additional workers.

In theory that rate could rise above its 2000 levels, but at any plausible level — meaning one that doesn’t involve forcing unwilling people to work — you would need to look elsewhere to find those 18 million extra workers beyond the seven million that demographics alone are expected to produce.

One option would be to encourage people to work until a much older age. Sorry, Grandpa, you may need to go back to work so President Trump can hit his employment target.

Another option is to substantially increase immigration levels above currently forecast levels. That is, of course, inconsistent with other dimensions of the Trump policy agenda. Indeed, if he follows through on plans to deport millions of immigrants working illegally, that would make hitting the job and G.D.P. growth goals that much harder.

But G.D.P. growth isn’t just about demographics and work force trends. It also depends on how effective businesses are at converting human labor into economic output. In a word, productivity.

Some simple arithmetic shows that to meet Mr. Trump’s projection of 3.5 percent annual G.D.P. growth each year, even assuming the extraordinary addition of 25 million jobs, you’d still need 2.2 percent annual growth in labor productivity, up from 0.9 percent in the time frame from 2008 to 2015 (assuming hours worked per worker remains constant).

That would be terrific. And it’s plausible (productivity growth was 2.4 percent from 1950 to 1973).

But it’s also the case that economists don’t generally believe that presidents have much power, at least directly, over productivity growth. More common explanations focus on innovations that do or do not occur within businesses to make their processes more efficient. Think of the word processor and email making millions of secretaries unneeded, or robotics that reduce the number of human-hours needed to build a car.

Maybe the burst of infrastructure spending and rollback of regulations Mr. Trump promises will unleash a new surge of productivity growth. Or maybe whatever happens to productivity in the coming years, good or bad, will happen regardless of who is president.

Add it all up, and is Mr. Trump’s promise of 25 million new jobs over the next decade and 3.5 percent annual economic growth possible? Only if a burst of innovation arrives that makes every worker’s labor go further, and if millions of new immigrants arrive from overseas or the ratio of American adults who want to work rises far higher than it has ever been. Absent all that, the math just doesn’t work.

The Upshot provides news, analysis and graphics about politics, policy and everyday life. Follow us on Facebook and Twitter. Sign up for our newsletter.

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