Chicago, Ill.
As President Bush touts the economy’s supposed strength and the Federal Reserve flirts with another interest rate hike, America’s working families fear that the stubborn determination to stay the course of failed economic policy will only exacerbate the nation’s ongoing jobs crisis.
After a burst of hiring last fall and winter, America’s jobs machine slowed in the spring and stalled this summer. The nation’s employers have added only 110,000 jobs in the last two months, one-third the number needed for new workforce entrants alone and demonstrably too few to accommodate both new entrants and jobless workers.
July’s disappointing employment report is just the latest indicator that the economy has not recovered for working families and that President Bush’s economic policies will not work to create a sustained and solid jobs recovery. More than 14 million Americans are unemployed or under-employed, a number that has hardly budged since January. Mass layoffs rose in June, and the number of workers affected by such job cuts grew 54 percent.
According to a periodic displaced worker survey released by the Labor Department earlier this month, the share of long-tenured employees laid off from their jobs over the survey’s three-year reporting period was the highest on record. Roughly 70 percent of those individuals are worse off now than they were before—more than half who have found work earn less than before, while others remain unemployed or have dropped out of the workforce altogether.
Last month, the Internal Revenue Service reported that for the first time since World War II, Americans’ incomes had declined for two consecutive years. Real wages fell to a two-year low in May and have now fallen for six of the last seven months.
Wages are down in part because the new jobs that are being created are inferior to those we are losing. According to one of the Labor Department’s employment surveys, virtually all—97 percent—of the job growth between March and June of this year was in part-time employment. Two-thirds of the jobs created since late last summer were in low-wage industries. On average, jobs in industries that are growing pay 21 percent less than jobs in industries that are shrinking. And employers in expanding industries provide health coverage for only 55 percent of their workers, compared with 68 percent of workers insured by employers in shrinking industries.
These recent negative reports are but the most recent reminders and indictments of the Bush Administration’s bankrupt economic policies. Mr. Bush sold his only economic policies—trillion-dollar tax cuts tilted toward the very wealthy and more reckless trade agreements—on the basis that they would boost the economy and create jobs. The advertising, however, could not have been more false. The economy has created a mere one-third the number of jobs the President promised in lobbying for the most recent tax cut. Meanwhile, largely because of these tax cuts, we have amassed the largest budget deficit in history—a stunning reversal from the ten-year $5.6 trillion surplus Mr. Bush inherited from former President Clinton. And, instead of creating new jobs for America’s workers, Mr. Bush’s trade policies have shifted jobs and production overseas at breakneck speed and are key factors in the nation’s unprecedented and unsustainable trade deficit.
Under Mr. Bush, the nation has experienced the greatest sustained job loss since the Great Depression. Since January 2001, we have lost 1.1 million jobs altogether, but the private sector has been hammered--shedding 1.8 million jobs. Hardest hit are the nation’s manufacturers and their employees, who have lost 2.7 million jobs since the President took office. Unless things change dramatically, Mr. Bush is on track to be the first President since Herbert Hoover to finish his term with fewer jobs than when he started. And, paralleling the decline in the health of the jobs market, access to health care is increasingly imperiled for America’s workers. Since Mr. Bush took office, nearly five million more Americans, most from working families, have become uninsured, and workers’ costs for family health care coverage have grown almost 50 percent. Mr. Bush has no effective or meaningful plan to address this health care crisis, to reduce costs or to expand coverage.
For America’s working families, the tragedy of the Bush failed economic policies will only be compounded if the Federal Reserve raises its benchmark short-term interest rate at its meeting this week. Given the recent substantial setbacks in jobs and wages on top of a still-lumbering economy, the very moderate inflation we are experiencing plainly does not warrant Fed action likely to increase unemployment and further dampen job growth. And, to raise rates now simply to lend credence to the notion that the economy is just in a “soft spot,” or to create an option for lowering rates in the event of a terrorist attack or further economic worsening—as some have suggested—would be the height of cynicism.
Mr. Bush’s economic policies are deeply flawed and profoundly unfair. Instead of creating good jobs that will support working families, the President’s policies have accelerated job losses and wage declines, exacerbated income inequality, and created record budget and trade deficits. Raising interest rates now would only add insult to these injuries.
Nothing matters more to America’s working families than good jobs that provide family-supporting wages and benefits. The labor movement will continue to fight for tax, budget and monetary policies that will put the economy on a positive and sustained track of solid job creation—and for policymakers who put America’s workers and America’s jobs first.