|
"...But before investigating some of its outrageous claims about the economy, let's do a quick reality check. Where are we? The economy went into recession as George W. Bush took office, so it would be unfair and inaccurate to blame the initial downturn on the current administration. The Bush policies, however, have been flawed because they were never intended to generate jobs or growth in the short-term; they were always about cutting government revenue and shifting the tax burden away from income from investments (from the few) and onto income from labor (that's most of us). A decent set of policies -- enacting one-time tax cuts aimed at lower- and middle-income families, building roads and bridges, renovating schools, providing aid to the states, offering improved unemployment insurance -- could have yielded a much better situation today.
What did happen? There were continuous and record-breaking employment losses for roughly two and a half years, followed by some modest job gains starting last September. Oh, there was one very good month for job growth, this last March. After three years, though, the economy has lost 2.6 million private-sector jobs and created about 600,000 government jobs for a net loss of 2 million. In every other business cycle since the 1930s, the economy had recouped all the lost jobs by three years from the start of the recession. In the current case, however, the economy is still suffering a 1.5-percent loss of employment after three years. In the better-managed cycles of the last three decades, the economy had gained 2.5 percent more jobs after three years. That 4-percent difference between the current cycle and recent cycles represents a shortfall of more than 5 million jobs. So, we've certainly had a tough time on the job front.
What's more, inflation-adjusted wages are flat, at best, and are eroding for many workers. When jobs are short, it is inevitable that weekly and hourly wages grow more slowly as employers take advantage of the situation. The offshoring of white-collar jobs has only added to these pressures this time around.
Poor job performance and wage stagnation add up to very little growth in overall wage and salary income -- what most of us live on. With fast productivity and minimal growth in wages and employment, you get big profits. This is exactly whats occurred. Even Alan Greenspan noted this recently, saying: "Most of the recent increases in productivity have been reflected in a sharp rise in the pre-tax profits of nonfinancial corporation … . The increase in real hourly compensation was quite modest over that period. The consequence was a marked fall in the ratio of employee compensation to gross nonfinancial corporate income to a very low level by the standards of the past three decades..."
more@link
|
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
