Posted on 09/06/2004 11:09:07 AM PDT by Willie Green
For education and discussion only. Not for commercial use.
The Labor Department reported last week that 144,000 payroll jobs were created in August. Let's put that in perspective.
The number was below market forecasts. It was also below the number of jobs needed to accommodate the growth in the employment-aged population. In short, this was not good news. It's only by the diminished job-creation standards that have prevailed since the last recession that any positive spin could be put on last month's performance.
As the Economic Policy Institute tells us, in a book-length report it is releasing today: "The United States has been tracking employment statistics since 1939, and never in history has it taken this long to regain the jobs lost over a downturn."
In "The State of Working America 2004/2005," the institute shows in tremendous detail how those lost jobs and other disappointing aspects of the recovery are taking a severe economic toll on working families.
According to the institute:
"After almost three years of recovery, our job market is still too weak to broadly distribute the benefits of the growing economy. Unemployment is essentially unchanged, job growth has stalled, and real wages have started to fall behind inflation. Today's picture is a stark contrast to the full employment period before the recession, when the tight labor market ensured that the benefits of growth were broadly shared.
"Prolonged weakness in the labor market has left the nation with over a million fewer jobs than when the recession began. This is a worse position, in terms of recouping lost jobs, than any business cycle since the 1930's."
What is happening is nothing less than a deterioration in the standard of living in the United States. Despite the statistical growth in the economy, the continued slack in the labor market has resulted in declining real wages for anxious American workers and a marked deterioration in job quality.
From 2000 through 2003 the median household income fell by $1,500 (in 2003 dollars) - a significant 3.4 percent decrease. That information becomes startling when you consider that during the same period there was a strong 12 percent increase in productivity among U.S. workers. Economists will tell you that productivity increases go hand-in-hand with increases in the standard of living. But not this time. Here we have a 3.4 percent loss in real income juxtaposed with a big jump in productivity.
"So the economic pie is growing gangbusters and the typical household is falling behind," said Jared Bernstein, the institute's senior economist and a co-author of the new book.
This is the part of the story that spotlights the unfairness at the heart of the current economic setup in the U.S. While workers have been remarkably productive in recent years, they have not participated in the benefits of their own increased productivity. That doesn't sound very much like the American way.
According to the institute, "Between 1947 and 1973 productivity and real median family income both grew 104 percent, a golden age of growth for both variables." That parallel relationship began to break down in the 1970's, but it is only recently that it fell apart altogether, leaving us with the following evidence of unrestrained inequity:
"In the 2000-03 period income shifted extremely rapidly and extensively from labor compensation to capital income (profits and interest)," so that the "benefits of faster productivity growth" went overwhelmingly to capital.
American workers are in an increasingly defensive position. In a tight labor market, when jobs are plentiful, workers have leverage and can demand increased wages and benefits. But today's workers have lost power in many different ways - through the slack labor market, government policies that favor corporate interests, the weakening of unions, the growth of lower-paying service industries, global trade, capital mobility, the declining real value of the minimum wage, immigration and so on.
The end result of all this is a portrait of American families struggling just to hang on, rather than to get ahead. The benefits of productivity gains and economic growth are flowing to profits, not worker compensation. The fat cats are getting fatter, while workers, at least for the time being, are watching the curtain come down on the heralded American dream.
ping
A contrary view.
To the extent that the socialistic wealth transfer policies of the Democratic Party (i.e. the New Deal) remain in place, I guess you could talk about warfare against the Middle Class by the administration. Not everyone deserves a color TV or a car. This is a world where you have to earn what you get. But knowing you Willie, I suspect that you advocate majoritarian theft of the wealth that others have earned by effort, risk taking and working within the legal system. Sour grapes...
oh yeah, and envy, too.
What happens if you include self-employed? How many jobs were added last month based on the household survey? Why does everyone (including the Bush camp) ignore that?
The EPI and Bob Herbert are socialists.
Borderline TROLL is why. My best advice is to look at the troll, and do not respond needlessly.
It turns out that the REAL bad news is the NYTimes has managed to be in the publishing business for yet another day.
The real progress is in the area of self employed, those working out of their houses. Do not forget that years ago, the underground economy was estimated at $50 billion. With all the required business taxes, licenses, insurance etc. I am sure the underground economy (cash) is larger than anyone imagines.
Remember, this country was founded on tax evasion... the Boston Tea Party, Stamp Acts, etc. Then the politicians justified it with Life, Liberty etc. And now the politicians / newspapers say or report whatever benefits them as they did in the Revolution.
Not so sure about the NYT being clueless about American values. Rather, I think it more productive to operate on the principle that they have values OPPOSITE to American values. If, for instance, Americans value self-reliance, the NYT values dependency (and so on). Read their editorial page and do the exact opposite and our country would be doing well.
The Bush camp is not ignoring the growth of self-employed persons in households. The president just yesterday spoke about how Kerry's tax plans will affect the majority of self-employed business owners since they are not LLCs who can enjoy tax breaks not available to the self-employed. I think those jobs are invisible to lib DemocRats, but intentionally - since that segment of the employment figures is growing at a much faster pace than traditional manufacturing jobs.
You apparently know me well enough that you have to resort to misrepresenting my views in order to "debate" the issue.
The Bush Administration has abandoned America's productive domestic businesses and industries. Instead, it maintains the burdensome federal regulatory shackles that place our domestic industries at a competitive disadvantage. And it undermines domestic production efforts by promoting importation of foreign goods and services.
The Administration views the American Middle Class merely as a consumer market to be plundered, a labor force to be downsized and outsourced, and a taxpayer base to shoulder the burden of global corporate expansion.
And in what way does this differ from the Administration's Trade and Energy policies?
Answer: IT DOESN'T.
As the greedy businesses/corporation owners sit in the back offices, counting their profits on the backs of Americans, while voting for politicos that pander to their cheap, illegal alien labor, as Americans are forced to pay for this epic lawlessness.
Why should missing or exceeding the forecast be of any importance in a discussion of the number of jobs created? The forecasters are not creating the jobs and they are not destroying the jobs. They are merely providing their best guesses, based upon extrapolation of known data.
Suppose they had predicted an increase of 50,000 instead of 150,000? Would the 144,000 new jobs then convey more "success" than when the economists misfire in the other direction? If LSU is a 40 point favorite over Arkansas State and they "only" win the game 39-0, should their coach be fired?
The point I am trying to make is that actual numbers, be they economic, athletic, or anything else, are always the benchmark. The forecasts are what should be criticised, as in: "New jobs grew by a robust 144,000. Economists attempting to predict that number overshot it by 6,000."
Just as valid, from a political perspective, would be: "One million jobs were lost last month. Even though economists erroneously had predicted that two million jobs would be lost, the results are still abysmal." (No need to argue that the losses were only half as bad as predicted. So what?)
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