Job growth has fallen short of Bush administration forecasts, and working Americans' incomes are not keeping pace with the cost of life's necessities.
Published September 6, 2004
The U.S. economy is imprinted with a collection of American ideals about work and life. Chief among them is the belief that those who are willing to put in an honest day's work will have food on the table and a roof overhead. This Labor Day, amid an anemic jobless economic recovery and a growing disparity in household incomes, that ideal seems almost quaint.
The Labor Department reported Friday that 144,000 jobs were created in August, but the sobering context is that the nation still has lost 1-million jobs since the recession began in March 2001. No other post-recession recovery in the past half-century has taken so long to rebuild the lost jobs, and the jobs that people are getting are not necessarily equivalent to the ones they lost. Median household income has lost ground to inflation for the past three years, according to the U.S. Census, and those at the lowest end of the scale have lost the greatest share.
"So far, the recovery has not generated either the quantity or quality of jobs families need to lift their living standards," says economist Sylvia Allegretto. "The costs of basic necessities like health care, housing and college keep rising, and many working families' incomes are not keeping pace."
In The State of Working America, a new book published by the Economic Policy Institute, Allegretto and institute president Lawrence Mishel provide a grim assessment of the current job market. Business productivity is higher and inflation lower than in the 1990s, yet wages are stagnant. Pay for blue-collar workers lost 1.2 percent to inflation last year. Since 2001, income has increased only for the top 5 percent of earners. The top 1 percent of American households now account for 22 percent of all personal income, and executives earn 185 times more than the average worker. As for the current economic recovery, the main beneficiaries so far have been stockholders and corporate executives.
In his speech accepting the Republican nomination Thursday night, President Bush told the nation that his income tax cuts have "unleashed" the economy. Yet job growth has fallen dramatically short of the forecasts of his own advisers and well below previous recoveries. Therefore, his pledge to make further reductions in taxes and regulation and to "protect small business owners and workers from the explosion of frivolous lawsuits" is not likely to bring solace to families trying to live with an inadequate or nonexistent paycheck.
This Labor Day, during an animated presidential campaign and a lethargic economy, those with the faded blue collars are waiting for their share of prosperity.