The economy: theirs and ours

When the most recent Labor Department report showed a gain of only 112,000 jobs in June, far less than the 297,000 average for the previous three months, President Bush claimed it was good news. “We’re witnessing steady growth,” he said. “Steady growth. And that’s important. We don’t need boom-or-bust-type growth.”

Actually, June was a setback, not a gain. With at least 140,000 jobs needed each month just to absorb new workers, June’s “steady growth” represented an increase in the jobs deficit.

And there was more bad news. Manufacturing jobs declined in June, after showing small gains this spring. The cost of living is rising at its highest rate since 1990. The dollar is again declining in value, making further inflation likely. Dean Baker, of the Center for Economic and Policy Research, comments, “The extraordinary weakness in the [latest jobs report], combined with other recent data on durable goods orders, car sales, and retail sales, provide serious grounds for questioning the strength of the recovery at this point, especially in a context where higher mortgage rates are likely to be slowing the housing market.” And The Economist succinctly asks, “Is the recovery losing momentum?”

Of course, one month of bad news does not mean the economy is collapsing. But families don’t judge the economy by GDP growth or the Dow Jones average, but by how much is left at the end of the month, whether they’ve gained or lost ground on their credit card balance, whether their daughter is thinking about dropping out of college because tuition just went up again, and whether they can afford their prescription drugs.

By these measures, the economy is bad and getting worse. You can read it almost every day in the headlines:

“U.S. Airways seeks new cuts from workers,” New York Times, July 10.

“Job scramble – Area teens find it harder to land summer positions,” New Haven Register, July 4.

“Dunned for old bills, poor find some hospitals never forget,” Wall Street Journal, June 8.

“As bills mount, debts on homes rise for elderly,” New York Times, July 3.

Of course, you can find bad-news headlines anytime. But statistics and experience bear out the headlines.

In the first six months of this year, the Bush recovery was supposedly in full swing, with production and profits soaring, and jobs supposedly rebounding. But real wages actually fell at a 2.9 percent annual rate, showing that all of the gains and more went to corporate profits and executive bonuses. Sales by upscale manufacturers and retailers are booming, while sales are lagging at Wal-Mart and Target. Consumer confidence is increasing for the top half – those with incomes above $50,000 – but dropping for the bottom half.

Two-thirds of the jobs created in the past year have gone to workers 55 and over. This squares with other evidence that older Americans are forced back to work by failing pension funds, skyrocketing medical costs, increased family responsibilities, and growing debt. Meanwhile, high school and even college graduates are lucky to find any job at all, let alone one with decent pay, benefits and a future.

Against this background, John Edwards has become the Democratic candidate for vice president. Edwards’ theme has been “two Americas” – one for the rich and privileged, the other for those working just to get by. This theme resonates because it speaks to the actual experience of millions of working families.

In a thoughtful New York Times article, Louis Uchitelle writes that “Both candidates say … that their approaches will strengthen the economy, but what stands out is who gets what share of the pie.” He continues, “Through tax cuts and other policies, the Bush administration is channeling more income to the wealthiest Americans, while the Kerry-Edwards ticket favors a higher minimum wage, extended unemployment insurance, stepped-up spending for education and, above all, subsidized health insurance.”

The labor, civil rights, environmental, peace, and independent progressive movements are doing extensive grassroots organizing for this election. A people’s campaign to elect Kerry-Edwards that builds on the “two Americas” theme can do more than win the election. It can help the independent grassroots campaigns consolidate their organizations so that after the elections, a powerful movement can turn the campaign promises into reality.

The author can be reached at economics@cpusa.org.

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CONTRIBUTOR

Art Perlo

Art Perlo lived in New Haven, Conn., where he was active in labor and community struggles. He did research and writing on economic issues in Connecticut, including work with the Coalition to End Child Poverty in Connecticut which helped pave the way for the movement for progressive tax reform in the state. He wrote on national economic issues for the People's World and was a member of the CPUSA Economic Commission.