After listening to the President’s press conference today, it is no wonder that President Bush’s talking points do not resonate with middle-class Americans. The President touted economic growth and asserted that he wanted to make health care more affordable. Neither argument is particularly convincing for most families.
Although the economy has grown, incomes have not. For five years running, the typical family’s income has not increased. After taking inflation into account, wages for the vast majority of Americans declined from 2003-2005 and were lower in February 2006 than in November 2001, when this economic recovery officially started.
The reason for weak wage growth is the fact that companies can find all the labor that they need without paying higher wages or expanding benefits. The employed share of the population in February 2006 was smaller than in March 2001, when the last recession started or in November 2001, when it officially ended. If the employed share of the population had stayed the same since March 2001, 3.2 million more people would have had a job in February 2006.
With slow job growth, employers can also get away with reducing benefits. Pension and health care coverage are the lowest in years. The share of people with employer sponsored health insurance, for instance, is at the lowest point since 1993.
Providing more tax cuts for high-income, healthy families, as President Bush is suggesting with his Health Savings Accounts, is not going to address this problem. Specifically, those tax cuts are most valuable to those least in need for health insurance coverage.
The President’s press conference was little more than same empty rhetoric he’s been saying for months.
Contact: Daniella Gibbs Leger