The chairman of the Council of Economic Advisers said yesterday that, even with unemployment high, the government should not adopt artificial job-creation programs.
Martin Feldstein, the chairman, said "there is no justification for public employment projects or other activities that are designed solely to create jobs rather than to provide useful products or services.
"That distinction is likely to be very important in the legislative debate during the lame duck session" of Congress that began yesterday.
A number of members of Congress are expected to push a variety of what they regard as "job creation" programs in the brief session, including a bridge and highway repair proposal financed by a five-cent-a-gallon increase in gasoline taxes that has President Reagan's backing.
Feldstein, speaking to the Washington Press Club, said the administration favors the road repair program "because of the sorry state of many of our nation's highways and bridges and not as a way of stimulating employment."
And he added, "The effect on jobs is very small. It will create a substantial number of jobs in the construction industry, which is very depressed, but it will also reduce jobs in other segments of the economy."
The CEA chairman said he wished he could say "that I know for sure that the recovery has begun and that unemployment will soon be declining. Unfortunately, though, the economy is still in the ambiguous bottoming-out range of the business cycle.
"The economy is still relatively weak, but the favorable signs of an upcoming recovery are getting stronger all the time," Feldstein maintained.
Even with the moderate but sustained recovery the administration is shooting for, it could take five or six years to get unemployment down to the 6 percent to 7 percent range, he said. Trying to go faster would be self-defeating, he argued, because "a faster recovery runs the risk of accelerating inflation and therefore of an expansion that comes to a premature end."
To get the unemployment rate down that much will mean finding jobs for about 5 million people who otherwise would be out of work and for another 10 million for workers who will enter the labor force over that period. "No series of public employment programs or other government activities can begin to create more than 15 million additional positions during the next half dozen years," he declared.
Meanwhile, the Labor Department said that productivity at nonfarm private businesses increased at a revised seasonally adjusted annual rate of 4 percent in the third quarter. Originally the gain was set at 3.6 percent.