Labor Day Checkup

In his Labor Day message to the nation, George Bush says the economy is in great shape.

Today, productivity is high, consumers are confident, and incomes are rising across our country. Our economy has experienced one of the fastest growth rates of any major industrialized nation. More than 8.3 million jobs have been created in America since August 2003, and the unemployment rate remains low. My Administration is committed to promoting pro-growth economic policies, keeping taxes low, and supporting small businesses to keep our economy strong and growing.

As usual, the facts to do not support Bush's rhetoric. The 2006 census data is out, and Eric Lotke has used it to assemble a useful economic scorecard that helps explain why so many of us are not experiencing the strong economy described in Bush's message.

Productivity continues to rise and corporate profits along with it. But working people aren’t sharing the gains.

• Poverty ticked down a hair last year. That’s good news but it’s the first decline on President Bush’s watch. Poverty rates are higher than when he took office(12.3% in 2006, up from 11.3% in 2000).

• The number of people without health insurance continues to rise, up to 15.8% last year. 47 million Americans lacked health insurance in 2006, an increase of 8 million since Bush took office.

• Median annual earnings for full-time, year-round workers fell last year, the third year in a row. The White House prefers to point to the rosier “household income” figure, which did creep up 0.7% ($360) last year. But don’t fall for it. Household income is down $956 since 2000. It rose that hair last year because more household members are working, and for longer hours. But they are getting paid less for their work. There’s no getting around the math.

• The trend to re-classify full-time workers as “independent contractors” continues to rise. Although the same work is done by the same people, contracting it out allows employers to dodge the minimum wage increase and terminate benefits that accrue only to “employees.” Reclassification also lets them avoid payroll taxes, a dodge that creates an invisible subsidy to corporate America in the range of $3 billion.

• The only good news is at the top of the economy. Between 2000 and 2006, the average income of the lowest fifth dropped 4.5% and the middle fifth dropped 2.5%. But the income of the top fifth increased by 1%. Not only is that good news at the top, but averaging them into the nation as a whole increases the national average, and helps to create the illusion of good news. After all, Bill Gates and I have an “average” income in the billions.

So the wages and earnings are basically flat, with a slightly downward tilt. It hurts because ordinary household expenses continue to rise. Working Americans feel the statistics when they pay the bills.

• Since 2000, premiums for employer-sponsored health insurance for families have skyrocketed. The average monthly worker contribution for family coverage in 2000 was $135. In 2000, it increased to $248 (up 84%)

• Tuition and fees at public colleges went up 37% between 2000 and 2006.

• Gas prices have doubled since 2000. The price of home heating oil increased by 50%.