Five Economic Factors that Shaped President Carter’s Presidency.

He did so much for labor in the United States, but inflation and the Hostage Crisis impacted his reelection efforts.

1. Initial Economic Focus and Stimulus: Upon taking office in 1977, Carter immediately prioritized job creation for the unemployed. He successfully pushed Congress to pass the Economic Stimulus Appropriations Act, and under programs like CETA (Comprehensive Employment and Training Act), the number of public service jobs increased dramatically from 310,000 in 1976 to 725,000 in 1978. The Department of Labor received about $8 billion for these employment initiatives.

2. Regulatory and Government Reform: Carter continued the regulatory reform efforts that had begun under Nixon, aiming to make the government more efficient and less burdensome. He passed the Civil Service Reform Act and appointed Ray Marshall, a labor economist and secretary of Labor, who focused on simplifying operations and strengthening policy analysis capabilities.

3. Employment and Training Initiatives: The administration implemented several targeted programs, including:

   • The Private Sector Initiatives Program (PSIP) to increase private employer participation in CETA

   • The Youth Employment and Demonstration Projects Act of 1977

   • The Targeted Jobs Tax Credit program for employers hiring disadvantaged workers

   • The Humphrey-Hawkins Full Employment and Balanced Growth Act of 1978

4. Minimum Wage and Labor Standards: Under Carter, significant amendments to the Fair Labor Standards Act (FLSA) gradually raised the minimum wage from $2.30 to $3.35 per hour by January 1981. Notably, farm workers were covered by minimum wage legislation for the first time.

5. Inflation Crisis and Economic Challenges: Despite successfully reducing unemployment through various programs, the administration struggled with massive cost-of-living increases driven by huge oil price hikes in the Middle East. The situation became particularly challenging when inflation reached double-digit levels, and there was little the administration could effectively do to control it. This economic challenge, combined with the Iran hostage crisis that began in November 1979, dominated the latter part of Carter's presidency and contributed to his defeat by Ronald Reagan in 1980.