Center for American Progress: July 6th
The Economy: We're 'Stuck'
Despite a "disappointing" new report showing "far less than expected" new jobs created in June, President Bush claimed the report proved the economy was "vital and growing." As the Baltimore Sun reported, America's "employment engine sputtered last month, producing half as many new jobs (112,000) as expected." The unemployment rate remained stuck at 5.6 percent - with a "high number of people hav[ing] stopped looking for work" because the job market has become so bleak over the last two years. The report "raised new misgivings about the strength and endurance of the rebounding jobs market."
Although the White House boasts that 1.5 million jobs were added in the last 10 months, columnist Paul Krugman notes, "that figure is barely enough to keep up with a growing working-age population." The New York Times notes that it is "surprising that President Bush would want to play the game" of sugarcoating the economic numbers: "the economy has still lost 1.1 million more jobs than it has gained on his watch, leaving Mr. Bush at risk of being the first president since Herbert Hoover to preside over a net loss of jobs." As Economy.com's chief economist Mark Zandi said, the new jobs report means "President Bush can write off hopes of restoring the 1.8 million private-sector jobs lost during his term."
OTHER TROUBLING NUMBERS: Along with the disappointing June numbers, the Labor Department revised the April and May jobs figures to show 35,000 fewer jobs were created than originally reported. Additionally, in a separate report "that implied a leveling off in the pace of the economy," the Commerce Department said new orders at U.S. factories slipped 0.3 percent in May on top of a 1.1 percent decline in April. Economy.com's Zandi also pointed out that statistics prove "if you're unemployed, you're stuck: The duration of unemployment is about as long as it has ever been. In June [the average] was 19.9 weeks -- it doesn't get much longer than that."
THE MYTH THAT GROWTH IS HELPING WORKERS: The president claimed the report showed "steady, consistent growth" which means that "citizens will be able to find a job." But as Bloomberg News reports, record-high corporate profits are not "trickling down to U.S. workers in the form of pay increases." The new Labor Department report showed nominal weekly earnings actually declined by 0.5 percent. Over the last year, wages have only risen by 2.2 percent - a rate "more than offset" by inflation. CATO's William Niskanen, who served as chairman of President Reagan's Council of Economic Advisers, said, "I don't see any substantial increase in average real wages for some time."
Stephen Roach, chief economist for Morgan Stanley & Co., said stagnating wages are "far short of the nearly 10% gains that occurred in the first 29 months of the preceding six cyclical recoveries. This translates into a shortfall of $280 billion in 'missing' real personal income." As the NYT notes, "take-home pay, as a share of the economy, is at its lowest level since the government started keeping track in 1929."
THE HEALTH CARE SQUEEZE CONTINUES: The president of Aetna, one of the nation's biggest health insurers, recently told investors, "It's fair to say that a lot of the jobs being created may not be the jobs that come with benefits." In other words, workers are feeling squeezed not only by stagnant wages, but also by skyrocketing health care costs.
In its two-part series on the health care challenges facing America, the Toledo Blade noted for the average American family with the median household income of $42,409, the Bush administration's refusal to deal with health care "has meant steep increases in what [families] and their employers have paid for health insurance. Last year, the average premium for a family of four was $9,086, up from $6,348 in 2000." Even when companies do offer health insurance, new studies show that many employees can't accept it because premiums are too high. Meanwhile, more than 43 million Americans have no health insurance at all.
posted by Richard at
Tuesday, July 06, 2004
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