Stupid, Selfish Workers
Posted by
KTK
Joe, over at Evangelical Outpost, cites “Another example of the economic ignorance of Americans“:
close to 46 percent of those surveyed in a new CNN-Opinion Research Corporation Poll out Thursday morning say the country’s economy is in a recession . . .
69 percent of black Americans questioned in the survey say the country’s in a recession while only 42 percent of white Americans feel the same way.
First of all, this isn’t evidence of economic ignorance - just of the difference between a technical definition and people’s common-sense understanding of the situation.
Joe quotes the technical definition of recession:
[T]he National Bureau of Economic Research defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.
[emphasis added]
That is, by definition the recession is over when things literally get so bad they can’t get any worse. Most people would think the recession was still going on at that point.
Most people understand “recession” to mean “economic bad times”, but technically it just meanst anytime economic indicators turn negative. If you think of the strength of the economy following a kind of sine curve, the popular notion of recession would be the period when the curve is below the middle point, either rising or falling, while the technical definition would be whenever the curve is falling, even if it starts from a high point.
So, by the technical definition, we’re kind of weakly out of the Bush recession - that is, some of the things that got so bad they couldn’t get worse have now started to get better. But by any reasonable understanding of the situation, things are in fact still bad in absolute terms. Joe thinks it’s “ignorant” to believe that.
Among other features of Bush’s “recovery”:
- he remains the worst President since at least Eisenhower in terms of average monthly employment gains over his term
- he remains the only President since at least Eisenhower to average negative monthly job growth
- his best month ever in terms of job growth still puts him behind 5 other recent Presidents considered on average over their entire terms (top three finishers: Clinton, Carter, and Johnson)
- even periods of “expansion” and of positive net job growth under Bush have always lagged population growth - there has never been a period under Bush in which more jobs were becoming available to the working population overall
- he is the only President in recent history to sustain continual lagging job growth, with respect to population, throughout his term
- the Bush recession officially “ended” almost two years ago - Bush has averaged a net 33,000 jobs lost per month during the “expansion” period
- Unemployment rates for both blacks and whites declined steadily under Clinton, and rose dramatically under Bush
- the gap between black and white unemployment rates narrowed under Clinton and has widened under Bush
- the black unemployment rate is more than twice the white rate (and would be three times higher if you include the larger percentage of non-imprisoned working-age blacks who are categorized as “not in the labor force” because they’ve simply been unemployed too long)
- GDP growth under Bush has been below the 10-year moving average for most of his term (contrast Clinton: both Bush and Clinton sat through “official recessions” lasting about a year in the first year of their terms - Clinton then not only posted record job-growth for the rest of his Presidency, but GDP growth above the 10-year average almost every quarter therein; George Bush, as we note, has put people out of work by the trainload, while also posting below-average GDP growth most quarters; the “Economic Snapshots” Website notes: “Historically, we have seldom seen real GDP growth this weak except when a recession was near”)
Re: real income, the Economic Policy Institute reports:
despite low unemployment and strong productivity growth, these measures of living standards have yet to recover to their levels of the previous business cycle peak in 2000. . . . in 2006 [there was] an increase in the poverty rolls of 4.9 million persons, including 1.2 million children; median household income in 2006 was . . . about $1,000 dollars (-2.0 %) below its 2000 level (in 2006 dollars). In other words, economic growth over the last six years has totally bypassed the typical middle-class household. . . .
Since 2000, the share of the population without health coverage has increased 2.1 percentage points, an increase of 8.6 million uninsured Americans. . . .
Reflecting the narrow extent to which the growing economy has been showing up in the paychecks of many working-age households, median annual earnings by full-time, year-round workers fell in 2006, for the third year in a row, down about 1% for both men and women. . . .
The unequal distribution of growth between profits and compensation is playing a critical role in this result. . . . the earnings declines among male and female full-year workers last year can be accounted for by a profit squeeze on wages.
Note also that this very weak wage performance has occurred while productivity growth increased 3% per year (2000-06). While economists and policy makers typically stress the positive performance of such indicators as productivity, GDP, or low unemployment, these earnings results clearly reveal that positive macro-conditions have not led to wage growth for typical full-year workers, as customarily had been the case.
So, yes, we’re technically in an “economic expansion” - one that has seen consistently increasing gaps between available jobs and needy workers, declining real income, increasing lack of health insurance, a widening unemployment gap between blacks and whites, record levels of net job losses, and recession-level GDP growth, all during this supposed “expansion”, and all arising uniquely under the Bush administration.
But Joe thinkd it’s a sign of “economic ignorance” that so many workers think they’re worse off only because they’re losing wages, benefits, and employment opportunities, and that blacks are more likely to think they’re worse off only because their unemployment rate is two or three times that of whites and they’re more likely to be counted out of the workforce entirely.
Corporate net profits are up, largely on the basis of those declining wage expenses, so anyone who thinks the economy is bad is clearly wrong. It’s only bad for for the people who do the work - you know, the little people, the ones who don’t count, the ones whose actual personal economic status has no bearing on the real economy, the ones who are “ignorant” for believing that they matter.
