Rising Pressures in 'Job Loss' Recovery

February 6, 2004

As President Bush continues to ply wealthy campaign donors with tales of economic recovery, America’s families suffer from a harsher reality – a lagging job market, stagnant wages, and rising costs and household debt. The latest employment figures released today by the Bureau of Labor Statistics show that 112,000 jobs were created in January, certainly better than continued job losses but far from signs of strong and sustained labor market recovery. Given the weak job market, wages are basically flat and families are now forced to deal with increasing costs and a diminishing ability to afford them.

• President Bush has presided over the worst labor market recovery since World War II. However you cut the numbers, the Bush administration is on track to have one of the worst job records in modern history. Despite job growth for the past five months, there are still more than 2.3 million fewer jobs than at the start of the recession in March 2001. Compared to job growth in a typical recovery, employment was down more than 8.8 million jobs in January.
• Wealthy investors are enjoying high times while wages remain flat for most workers. For the 12-month period ending in December 2003, average hourly earnings grew by 2 percent in non-inflation adjusted terms – the second lowest annual increase since March 1986. Average weekly earnings rose by only 1.7 percent over the same period and inflation-adjusted hourly wages have increased by only 1 percent from the start of the recovery to December 2003, about half of their typical rate of increase in a recovery.
• The Bush administration’s policies do nothing for working families facing rising pressures. The weak labor market puts working families in a bind. As prices for important items such as health care and education continue to rise faster than other prices or wages, the ability of families to pay for these costs has declined. Households are forced to make up the difference by borrowing more and exposing themselves to greater risk. Since the start of the recession, consumer prices have risen 5.1 percent, but health care costs are up 12.5 percent and education 19.2 percent during the same period. Despite historically low interest rates, consumer debt burdens have reached a record high – household debt service was above 13 percent of disposable income in the past two and half years, the highest on record since the Fed began collecting the data in 1980. Permanent tax cuts for the top 2 percent of earners will do nothing to alleviate these burdens on America’s middle class.

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