Saturday, July 08, 2006

The slow pace of job growth in a feeble economy

Lately, the Bush administration has been touting that they have 'created five million new jobs in America.' Of course even that is a stretch, since it comes since 2003, prior to which the number of jobs in America had actually fallen by two million. So in an overall five years plus of the Bush administration, we have a net gain of only three million jobs, or about 600,000 per year (vs. 2.5 million per year average in the eight years of the Clinton administration.)

Of course, Republicans, if you point this out, will invarably credit the Bush tax cuts. Conveniently they ignore that the Bush tax cuts, passed in March 2001, actually created the sudden loss of jobs in America.

Yes, the tax cuts did work as advertised-- employers used them to invest in new facilities, where they hired millions of people. Only those new facilities were mostly in Asia (as conservatives should have predicted-- lower labor costs), where a lot of American corporations opened new call centers, factories and other places of employment while closing the same things in America. The loss of the two million jobs was actually financed by the Bush tax cuts oriented towards the wealthy and large corporations-- in contrast to Democratic plans (Kerry's in particular) that were targetted towards small businesses since a small business that invests in longer hours, another location, or an expanded business is more likely to hire someone in their neighborhood than someone in Mumbai.

Having hit bottom three years ago, the economy has rebounded a bit, but even the five million jobs in three years (and in a rebound, which should give it a nudge upward at that) represents a rate substantially less than the average for the Clinton administration. So even if we forget the first two years of Bush and focus on exactly the same figures the Bush administration is touting as a success, they aren't.

But lately, it seems, that even that limited and hobbling 'recovery' is running out of steam. For the second month in a row, the jobs report out today for June fell short of expectations. In fact, over the past three months, the average number of jobs created has been 108,000, which if kept up for a year would represent a paltry increase of just about half of the Clinton average-- and not good enough to even keep up with population growth in the labor force.

Of course conservatives will point out that the unemployment rate has remained steady, at about 4.6%. True enough. But all I have to say about that, is that according to them, my wife, who is seeking employment, but who worked a little last year as a substitute teacher and a registration advisor (earning less than $1000 from both jobs combined) is actually considered employed! Further, my mother in law, who had a career before she was downsized 'early retired' out of it early at age 58 last year, and has since had to sell her house and move in with my sister in law, is also considered 'employed' (for the same reason, she did a little work as a substitute teacher last year). So the number itself is pretty much devoid of meaning when you can take a person who hardly has any work and claim they are 'employed'.

The truth is, no matter how rosy a picture they try to paint, the Bush economy has never been anything better than mediocre, and for most of the time he's been in the White House, it's been downright lousy.

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