Economic No Spin Zone

When the Public Says the Economy Isn't So Good, Perhaps That's Because It Isn't

You can spin the war on terror, you can spin how things are going in Iraq but you can't tell someone they are better off when they are not. Ruy Teixeira over at Donkey Rising takes apart the administration's claims that the economy is improving.

The Washington Post had an interesting article today on how "Quality of New Jobs Is Focus of Election-Year Debate". In standard fashion, the article quotes statistics from both sides of the dispute and makes no attempt to sort out who has the stronger case.

Let me try and remedy that. The article cites an interesting study by CIBC World Markets that finds: (pdf)

...U.S. job creation since late 2001 has been concentrated in low-paying industries such as hospitality, education and personal services, while job losses have hit higher-wage sectors such as transportation, manufacturing, utilities and natural resources.....The message is clear: The vast majority of the jobs that evaporated during the job-loss recovery were high-quality jobs.

The Republican reply to this kind of claim is to say that many high-wage industries are now growing and adding workers. That's true, but even if such industries are now adding workers, if they are growing slower than the average industry--which turns out to be the case--their share of overall employment will continue to decline and the employment share of low-wage industries will continue to rise.

But average hourly earnings, adjusted for inflation, have risen 2.4 percent since Bush took office you say!

.....most of that gain took place in the period immediately after Bush took office, before the recession really started to bite. In the current period, real hourly earnings, just like real weekly earnings, are headed downwards. According to economist Jared Bernstein at the Economic Policy Institute, real average hourly earnings declined .3 percent last month and are down a full percent in the last six months, which includes, of course, all the months of good job growth touted by the GOP.

I won't even go into the tax cuts here which after increases in local taxes and fees and cut backs in services have left most people worse off than they were before.

Most people don't have first hand knowledge of what's going on in Iraq but they do know when they are worse off than they were four years ago. This may account for Ruy Teixeira's observation that Independents seem to be jumping the Bush ship.