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The AFL-CIO charged in a Jan. 27 report that, despite President Bush’s rosy claims, the economy is in worse shape than it was two years ago when measured by all the key indicators important to working families.

“Americans feel anxious about the economy for serious reasons,” said AFL-CIO President John Sweeney in a statement that accompanied the report. “Jobs are fewer today than two years ago, individuals are filing for bankruptcy at a record pace, health care is more expensive and less available, and states are cutting back on basic services important to families – from education to health care to public safety.”

The report, titled “A Check-Up on the Nation’s Economic Health at the Mid-Point of the Bush Presidency,” was released on the eve of George W. Bush’s State of the Union address in which he was expected to tout his tax cut for the rich as a panacea and defend his drive for war on Iraq despite surging opposition at home and abroad. The AFL-CIO report points to what it calls “economic markers”:

* The nation has lost 1.7 million jobs over the past two years after adding five million jobs in 1999 and 2000. According to the U.S. Department of Labor, there are 2.5 job seekers for every job opening.

* Unemployment is at an eight-year high and expected to grow.

* The number of people without health insurance rose to nearly 41 million in 2001. Most Americans without insurance – 80 percent – are in working families.

* Workers’ health insurance premium payments rose 27 percent for single coverage and 16 percent for family coverage in 2002.

* Personal bankruptcy filings in the three-month period ending last September set the national record for any three-month period in U.S. history.

* States are experiencing their worst financial crisis since World War II, with cumulative three-year budget shortfalls that exceed $180 billion, forcing states to cut hours out of the school week, raised college tuition, delayed construction of schools, cut public health services, cut child care assistance, ended youth violence programs, stopped jury trials and raised taxes.

Bush’s only answer to the “deep concerns” of America’s families is another “flawed and unfair” trillion-dollar-trickle-down tax plan that will not create jobs, will not improve schools or public safety, will not restore health care coverage or retirement savings of workers and their families, will not help the states and will not strengthen and protect Social Security, the labor federation charged.

The study says the Bush $674 billion plan to restructure the tax code – with a price tag of at least a trillion dollars when debt payments are added – will provide “lots of benefits” for the very wealthy but will not reverse the “breathtaking turnaround in the economy” that has occurred during Bush’s watch. Nor, the report says, will the Bush plan “restore economic security for ordinary Americans.”

The AFL-CIO says it is time to “get real” about creating jobs, improving health care, education and reining in corporate abuse, strengthening basic programs such as Social Security and Medicare. To that end the AFL-CIO report calls for a six point program that meets the nation’s needs:

1) Tax cuts that broadly benefit most families, such as credits for all workers along with a fully refundable $1,000 child tax credit and elimination of the marriage penalty;

2) Financial help for the states so they can restore critical services – such as education, health care and public safety – and avert further damage;.

3) Investment in schools, transportation and transit systems, clean water and our industrial base to create jobs and spur growth;

4) Meaningful health care reform that will make high quality, affordable care available to all and include prescription drug coverage under Medicare for the elderly and people with disabilities.

5) Real retirement security that will strengthen and protect Social Security for all, safeguard workers’ guaranteed pension benefits and protect savings in 401(k) plans; and

6) An increase in the minimum wage to correct the gross underpayment of low-wage workers, many of whom remain poor despite working full time.

Unlike the Bush giveaway to the rich, the AFL-CIO agenda will provide real economic security to the nation’s families “today, tomorrow and in the years ahead,” the report states.

The AFL-CIO’s “Check-Up on the Nation’s Economic Health” ends where it began:

* More workers are losing their jobs and fewer employers are adding jobs.

* Health care coverage is eroding and costs are rising.

* Productivity is up but workers wages are flat.

* Manufacturing is reeling.

* States are wrestling with the worst fiscal crisis in more than half a century.

“This is the real economy for America’s families, one in which the economic tailspin that began in March 2001 has not slowed or reversed,” the authors of the report conclude, adding: “Congress and the president must get real about the economy’s problems and solutions. We will not boost the economy in the short term or build in the long term unless we have a plan that invests in what matters most: education, health care, good jobs, secure retirements and homeland security. That is what America and Americans need – and that is what the president and congress should give them.”


The ranks of the unemployed have grown steadily since the end of 2000, until today some 10 million workers who want jobs are unable to find them. As this table shows, African-American and women workers have been particularly hard hit.

Bad as these numbers are, they tell only part of the story. People are unemployed for longer periods today, with nearly 1.9 million being out of work for at least six months – up 66 percent since December 2001 and triple the number in December 2000. Another 1.4 million workers have been looking for work for at least three and one-half months.

Worse yet, record numbers of unemployed workers have exhausted their regular state-provided unemployment benefits and the benefits provided under the 13-week extension provided by the federal government in March 2002. The Center on Budget and Policy Priorities estimates that 2.2 million unemployed workers have run out of all unemployment benefits and that one million of these workers.

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Figures don’t lie, but liars figure

Many people – perhaps even most – get confused when confronted with numbers and terms like “average” or “median” or “quintile” or any of the many terms used to convey economic information. And such is the case today as President Bush attempts to take advantage of this confusion to sell his tax cuts for the rich as a “Program for Jobs and Economic Growth.”

For starters, there’s his claim that 92 million taxpayers will save an average of $1,083 in 2003, despite the fact that 80 percent of taxpayers will receive less than that amount.

“How can this be?” you ask.

The answer lies in the way the numbers are put together and the difference between an average tax cut and the tax cut for the typical household. The administration gets its $1,083 figure by a little sleight of hand, combining the average tax cut for a few at the top of the heap with the average cut for those in the middle and eureka!: 92 million taxpayers will get tax cuts averaging $1,083.

Trouble is, that’s what Bush once callled “fuzzy math.” Consider a hypothetical case where one taxpayer gets a $10,500 cut and nine others receive a $500 cut. The average cut of all 10 is $1,500, but 90 percent will get cuts of only one-third that size.

According to the Brookings Institution:

* the average tax cut for taxpayers in the middle fifth of the income spectrum would be $265, one-fourth of the so-called “average.”

* almost half of all taxpayers – 49 percent – would receive cuts of less than $100.

* the average tax cut for the bottom 80 percent of tax filers would be $239, while those in the next to the top fifth of tax filers would get an average cut of only $611

* the top one percent of filers would receive an average cut of $24,000, while those with incomes over $1 million would get cuts averaging $88,900.

And there are other “facts” – like the claim that “23 million elderly taxpayers would receive an average tax cut of $1,384.” According to the Tax Policy Center (TPC) only 3.4 million elderly taxpayers would get cuts of this size or greater, while 77 percent would get less.

And what about the claim that six million single women with children would get an average tax cut of $541? The TPC says that 85 percent of such women would receive cuts of less than $500 and 49 percent would get nothing.

As has been said: “figures don’t lie, but liars figure.”

– Fred Gaboury

PDF version of ‘AFL-CIO tells Bush and Congress: Get real on the economy’


Fred Gaboury
Fred Gaboury

Fred Gaboury was a member of the Editorial Board of the print edition of  People’s Weekly World/Nuestro Mundo and wrote frequently on economic, labor and political issues. Gaboury died in 2004. Here is a small selection of Fred’s significant writings: Eight days in May Birmingham and the struggle for civil rights; Remembering the Rev. James Orange; Memphis 1968: We remember; June 19, 1953: The murder of the Rosenbergs; World Bank and International Monetary Fund strangle economies of Third World countries