Bush’s Job-Loss Recovery the Worst on Record Since the Great Depression (October 7, 2003)
By Cynthia Green
With wages stagnant, job creation slow and unemployment swelling, it’s clear that President Bush’s trillion-dollar tax cuts still haven’t produced the kind of economic recovery that will lift all workers and job seekers.
A new report by the Economic Policy Institute shows that the labor market is in worse shape now that when the most recent recession ended, in November 2001.
In "Labor Market Left Behind," senior economist Jared Bernstein and EPI President Lawrence Mishel give Bush and his team the dubious honor of presiding over the lousiest recovery, in terms of employment growth, since the Bureau of Labor Statistics began tracking employment in 1939.
Bush’s first and perhaps last term in office will end with a net job loss, likely in the millions, making him the only commander-in-chief since Depression-era President Herbert Hoover to earn such a distinction.
"Since the recovery began, the unemployment rate has gone up by 0.6 percentage points," the authors note. The African-American jobless rate has risen by 1.3 percentage points. And though the downturn has crossed so many demographic lines, the slump in job opportunities has been worse for college graduates than for high-school dropouts, according to the report.
Private-sector payrolls are off by 1.2 million jobs, or 1.1%, since the end of the recession, "making this the weakest employment recovery on record," Bernstein and Mishel write. In all previous recoveries since World War II, even the sluggish one in the early 1990s, the economy has added jobs by this point in the cycle.
When the recovery began, unemployment stood at 5.6%, up from 4.2% at the beginning of the recession. It’s been drifting higher ever since, booking a 6.1% rate in September, more than 20 months out from the end of the recession, and again unusual for post-WWII recoveries.
The 57,000-job gain in September was largely due to a 33,000 rise in temporary employment – the kind of jobs that don’t offer benefits and don’t stick around.
In contrast to the Clinton-era boom of the late 1990s, when an average of 240,000 jobs were added monthly and inflation-adjusted wages were growing at a 2.0% annual clip, real pay stopped growing altogether in 2002 – and fell by about 1.0% for low- and high-wage workers, according to Bernstein and Mishel.
The economy that has been hemorrhaging an average of 93,000 jobs monthly since March 2001 also suffers from chronic long-term joblessness, the authors note.
Over the last year, the average duration of unemployment has lengthened by 2.7 weeks, from 16.6 to 19.3 weeks. Since April, the average jobless spell has lasted 19.5 weeks. The last time this rate was above 19 weeks for at least four months was in late 1983, when the jobless rate was about 9.0%, Bernstein and Mishel write.
"The relatively low rate of unemployment masks the full extent of labor market distress," they write, noting also the millions of part-time workers frustrated in their search for full-time jobs and others who cannot enter the work force because of obstacles like child care or transportation constraints.
Further, anemic job creation has increased the competition for fewer available slots. As many as two million discouraged folks have given up searching for work and are no longer counted among active job-seekers. This phenomenon of a "missing workforce" has actually kept the unemployment rate artificially low, and also means that once these people return to the labor market, the struggle for jobs will be that much more fierce, the report says.
"Although the economy is expanding, it is doing so at too slow a rate to quickly lower unemployment or generate the needed job growth," Bernstein and Mishel write.
"Even if predictions of a strong rebound in growth in the second half of 2003 are accurate, unemployment will remain close to 6.0% through the rest of this year and most of 2004," they say. The economy must grow by more than 3.5% to bring down the jobless rate. Figures for the latest quarter show the economy expanding by only 2.4%.
The Republican theology of tax giveaways for the wealthy has not yet translated into a recovery for workers, but the combination of these cuts and rising government is likely to generate some job creation along with faster economic growth, Bernstein and Mishel say. Still, dispiriting recent wage trends and depressed employment levels suggest that a "self-sustaining, robust recovery is not just around the corner," they say.
"It will be a long wait before the economy returns to the tight job market and broad-based wage gains that workers benefited from just a few years ago at the end of the 1990s," Bernstein and Mishel write.
Cynthia Green is a freelance writer.
2003 Labor Research Association
