Saturday, August 06, 2005

Cheap Labor Conservatives

The folks at Powerline wonder why the Bush regime's handling of the economy isn't praised more highly...(these folks would be right at home in Stalin's Russia or Kim's North Korea...)

The oddest thing about the strong economic growth that has taken place over the last several years is how stubbornly many people refuse to recognize it. Polls continue to suggest that most Americans are unaware of the economy's excellent performance. Can that really be true? No doubt inadequate news coverage is a factor, but I can't believe that a majority of Americans really have no idea how the economy is performing. I suspect that when asked about the economy in opinion surveys, many people focus on what they perceive to be negative at the time--budget deficits, the price of gasoline--either because that's what's in the news, or because they hope to influence the government by voicing dissatisfaction.

But of course that only points out a very obvious fact: the folks at Powerline are a bunch of elitists disconnected from the needs of average Americans.

The New York Times editorial page - yeah, the folks who brought us Judith Miller- are right on this point:

With July's number, the average monthly job creation so far this year comes to 191,000. (Since the spring of 2003, when job losses bottomed out, the monthly average has been 152,000.) That's enough to absorb the 150,000 or so new workers who enter the labor force each month, and then some. Still, it's not robust. If jobs were being created today at the same pace as in other economic recoveries since World War II, the monthly average would be about 250,000.

Employment rates - the share of the population that is employed, broken down by groups - tell a similar story. The rates ticked up slightly for most groups in July, including for African-American men and high school dropouts. That's encouraging because it's generally assumed that if the least-advantaged workers can find jobs, higher-skilled workers will do even better. Nevertheless, employment rates are still well below their most recent peak, in 2000.

Because the demand for workers has been subpar for some four years now, wages have suffered. Average hourly wages rose a surprising 0.4 percent in July, the strongest monthly surge in a year. But they're up only 2.7 percent over the past year, hardly keeping up with inflation. Asked about that yesterday, Secretary Chao replied that overall compensation - which includes employer-provided health care and other benefits - was rising faster than the cost of living. That's correct, but somewhat disingenuous. The fact that workers' raises are, in effect, being diverted to cover the exploding cost of benefits is hardly a positive development.

Can the folks at Powerline be so utterly clueless to not realize that the weakness in the job market, combined with exploding health care, reduced returns on retirement investments, and the increasing cost of energy's impoverishing America?

HT: Atrios, oddly enough, who cited Bush's radio address, and implying obliquely that stuff like lots of troops getting killed this week was "left out," but even on Bush's chosen topic the truth was left out.

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