Opinion pieces and speeches by EPI staff and associates.
[ THIS PIECE FIRST APPEARED IN THE HARTFORD COURANT ON SEPTEMBER 1, 2003 ]
Looking for a reason to celebrate
How should we celebrate Labor Day in the midst of the worst hiring slump since the Great Depression?
You may have heard reports that the economic recovery began more than a year and a half ago. Since then, we’ve lost more than a million jobs, and unemployment has risen more than half a point, from 5.6 percent to 6.2 percent. With recoveries like this, who needs recessions?
The depth of the jobs deficit is striking. American factories have been losing jobs at the alarming rate of 83,000 per month since the start of the recession. For every job opening today there are three unemployed people searching for work. As job opportunities fade, the search has gotten longer. For the past four months, the average spell of unemployment has lasted more than 19 weeks – that hasn’t happened since 1983, when unemployment was 9 percent.
This prolonged downturn has ended the steady climb in wages of the late 1990s. Then, and for the first time in decades, wages were rising up and down the wage scale, not just for the wealthy. Now, the typical worker’s pay is barely keeping pace with inflation.
And how have our leaders responded? Mostly by pointing fingers and spinning.
The Bush administration constantly reminds us that the recession wasn’t its fault.
But if the Bush team can’t be blamed for starting the recession, it certainly should be held accountable for not doing enough to get us out of it.
In 2001, with the economy in recession and reeling from 9/11, the administration offered up tax cuts. These were, in fact, the same tax cuts Bush ran on back when the economy was doing well, there were surpluses as far as the eye could see and his pitch was “It’s your money.” But with the economy in recession, the sales pitch shifted to a claim that these tax cuts would stimulate growth and produce jobs, even though they were neither intended nor well-structured for that purpose.
Not surprisingly, it didn’t work. As the recovery dragged on, still with no jobs, the Bush team came back to the table with another tax cut package. As if wishing would make it so, they named this tax cut the “Jobs and Growth Plan,” and it was worse than the first one. Instead of what the economy needed – targeted, temporary stimulus designed to create jobs fast – we got permanent cuts in taxes on dividend income and capital gains, and a return to the bad old days of chronic deficits.
So, what kind of Labor Day celebration is fitting in this economic climate? Let’s start by firing up the grill.
Let’s honor all the people who are trying to find work and can’t by holding the politicians accountable for their actions. Bush administration officials say their tax cuts will create an average of 340,000 jobs per month between now and the end of next year. Let’s hold them to it.
They predict that unemployment will be down to 5.5 percent by the end of next year. We’ll see.
They claim their top-heavy tax cut will boost middle incomes this year and next. Let’s track those incomes. Too often policy-makers get away with empty promises and bogus claims because people are just too busy to be bothered unraveling their spin. But the stakes are too high this time. The electorate needs to hold these guys’ feet to the fire.
And who knows, maybe a couple of Labor Days down the road we could be celebrating our nation’s return to prosperity with leaders who truly represent the interests of the working families that keep this nation growing.
Now that would be a picnic worth having.
Jared Bernstein is a senior economist at the Economic Policy Institute in Washington, D.C.
[ POSTED TO VIEWPOINTS ON SEPTEMBER 2, 2003 ]
