WASHINGTON, DC – The Center for American Progress released a new report by Senior Fellow Scott Lilly entitled, “Understanding Bushonomics.” The report lays out the many policy missteps the Bush Administration has made that will affect the economic health of the country for years to come.
Not since the 1920s have workers gotten such a small share of their productivity gains. The result is that the income of the vast majority of families has fallen since 2000 while the benefits of economic growth have been directed toward an extraordinarily narrow segment of the population. Since the economy began expanding in 2002, 25% of the growth in personal income has gone to the top one hundredth of one percent of the population (15,000 families whose annual income increased from $15 million a year to $29 million a year).
It is because the economic condition of ordinary families has been so badly weakened that high gasoline prices have become such an explosive issue this summer. We are hoping the report will provide a stronger context for the economic debates that will take place in the fall.
The current plight of American families can be traced back to policies set in place in the early months of the Bush administration which not only focused massive tax cuts on corporations and the highest income individuals but took numerous other steps to weaken the hand of employees in gaining a share of the economic benefits of rising worker productivity. The report lays out a number of mistakes that followed, including these issues among others:
- Minimum wage
As a result of the administration’s position, the minimum wage was stuck at $5.15 for a total of 10 years, the longest period without adjustment since it was instituted in 1938. In inflation-adjusted dollars it reached its lowest value in over 50 years, dropping by 29 percent before the new law was adopted in 2007.
- Enforcement of federal wage and hour laws
Two recent reports by the Government Accountability Office found that the Wage and Hour Division at the U.S. Department of Labor was flagrantly failing to meet its responsibility to enforce laws intended to prevent worker exploitation, and to oblige employers to pay wages owed to their employees.
Earlier this year, Sen. Edward Kennedy, Chairman of the Senate Health, Education, Labor, and Pensions Committee said of Robert Battista, the man Bush had selected to run the National Labor Relations Board for nearly the entire two terms of his presidency, that he had “led the most anti-worker, anti-labor, anti-union Board in its history.”
- Enforcement of trade agreements
Since 2000, the U.S. bilateral trade deficit with China has more than tripled, from $83 billion to more than a quarter of a trillion a year in 2007. This has had dramatic effects on manufacturing employment in the United States. Between May 1992 and May 2000 U.S. employment in manufacturing grew by 445,000, or nearly 3 percent. In the subsequent eight years manufacturing jobs fell 3.7 million, or more than 21 percent.
- Strong economic growth and declining incomes?
Though the Bush Administration talks often about strong economic growth during their time in office, in total, the top 10 percent of families accounted for 95.3 percent of the nation’s income growth between 2002 and 2006, leaving the other 133 million families in America to divide up the remaining 4.7 percent of the nation’s income growth. The average real income for families in the bottom 90 percent of households increased by about $300 to a little less than $30,700. Other data suggests, however, that all of that increase went to families in the 80th to 90th percentiles, and that the vast majority of households experienced declining incomes during the Bush expansion.