Don't believe the Bush administration's hand-wringing over its pathetic record on employment. The president's backers want a stagnant job market -- it keeps the help from getting uppity.
On Tuesday night, President Bush will use his State of the Union to claim that tax cuts have restored economic growth, and he may mention the stock market’s rise last year. But the transcendent economic issue this election year isn’t the growth rate. It isn’t the stock market. It also isn’t the budget deficit the tax cuts caused. And it isn’t even the rate of unemployment. It’s the number of people in this country who have decent work — and the number who don’t.
Here’s a chart, taken almost directly from the Bureau of Labor Statistics. It shows the month-to-month change in total employment, and how it fell from an average gain of 236,000 during the Clinton presidency to an average loss of 66,000 per month under George Bush. (The chart shows payroll jobs, averaged over three months.) The arrow, which I added, shows when Bush took office.
Economic numbers don’t get more clear than this:
Next, notice when the deep dive ends. That’s right: It was just after Sept. 11, 2001. It’s true that President Bush ought not to be blamed for the job losses of the Internet bust. But neither can he properly blame his troubles on Osama bin Laden: Job losses slowed down when the war on terror began.
Bush should be judged on the record after that — on the creation of jobs in 2002 and 2003. After all, the recession officially ended in November 2001. How many new jobs did we get since then? An average loss of 22,000 jobs every month.
There are no new jobs. Total job growth in the Clinton years: 23 million. Total job losses so far in the Bush years: over 2 million. Total gains in the last six months, since the so-called recovery supposedly accelerated in the third quarter? Just 221,000. That’s less than a single month’s average under Clinton. And last month? One thousand new jobs.
How many jobs should there have been? Crudely, the Clinton pace over three years would have yielded about 8.5 million. Allowing Bush a pass for 2001, matching Clinton in just two years would have meant 5.6 million new jobs, not the loss of another half a million. Want more? Lee Price of the Economic Policy Institute has a very useful study here.
Bush’s minions whitewash these figures by pointing to the household employment survey, which shows more (though not great) job growth. Here’s the main difference: The household survey covers 60,000 households. The payroll survey covers 400,000 businesses (and millions of workers). The payroll survey measures real jobs. Most agree that the payroll survey, while not perfect (it misses some new jobs in the upswing), is the better of the two reports.
The household survey does pick up many people who call themselves self-employed, independent contractors and the like. (When academics do this, we call it “consulting.”) Some would have you believe that this is the future of the economy, but let’s hope not. Most such work is stopgap, a way to scrape by when regular work is hard to find. Most people doing it would abandon it for a real job, if they could, in a minute. Real jobs — with benefits and a semblance of security — are better.
True, the unemployment rate doesn’t look so bad. But why not? Partly because many people who can’t get unemployment insurance now get themselves on the disabled rolls if they can. (Disability, the refuge of the desperate, has been growing very fast.) And the jobless rate did fall in December. But why? Because many thousands of people stopped looking for work. Some retired; a few went back to school; most just went home to wait it out. Very sensible of them, under these conditions.
The Bush years are a study in deliberately wasted effort: Repeal of the estate tax. Tax exemption for stock dividends. Ballistic Missile Defense. The USA PATRIOT Act. The war on Iraq. Each of these initiatives has a clientele. None of them seriously aims to achieve its stated goal, be that economic recovery or homeland security or national security writ large.
The method is clear to any who choose to study closely: It is a method of subterfuge and deception. It is the systematic and relentless pursuit of partly hidden agendas, sold to the public with slogans. The tax cuts were not aimed to produce recovery and jobs; they were a reward to the rich. The war on Iraq was not waged to help the war on terror; it was about getting Saddam, as we have now had confirmed by Paul O’Neill’s report on the Iraq agenda Bush carried from the beginning. Missile defense is not about North Korea, and still less about Iran or any other “rogue state”; it’s about the contracts. In all these cases, the decision on what to do came first — then the circumstances of the day were arranged to suit.
So it is today on the economy. What does Bush want? He wants a growth rate high enough to get him through the election. That’s obvious. After that, he doesn’t care. His clientele — the military contractors, oil companies, pharmaceutical firms and big media that control this government — make their money on patents, contracts and the exercise of monopoly power. (Case in point: Bush is pressuring impoverished Central Americans, in trade negotiations, to add 10 years to the length of drug patents.) These people have no interest in full employment. They like unemployment, weak labor, low wages and a government that bullies on their behalf. And after the election, if Bush wins, that is what they will get for four more years.
Bush has levers to keep the economy warm through the 2004 vote. Child credits kicked in during the third quarter of 2003. Households spent them at once, hence the 8 percent annualized growth rate that mesmerized the country for a moment. Tax refunds are due in the next few months; that should give spending another kick. The cost of war was the first big push that the economy got last year. Now much military equipment needs replacing; spending on that may be felt soon.
Most important, monetary policy is toeing Bush’s line. Alan Greenspan and his deputies were all over the economists’ meetings in San Diego this month, promising that interest rates will stay down. Don’t misunderstand me: This is the right policy. But for how long will it last? Low interest rates imperil the global dollar. The pressure to defend the dollar is out there. Will it prevail once the election is past? Remember: After November, George Bush will not care.
And after the election, the stagnation his backers want will not be hard to achieve. Our economy still faces major barriers to sustained growth. Capacity utilization in industry is low: a barrier to sustained growth of investment. Household debt burdens are high: a barrier to accelerating consumer spending, which will be aggravated when the housing bubble eventually pops. Federal, state and local budgets are riddled with structural deficits; these will not go away with growth. In the states and localities, spending cuts and tax increases are the only agenda. At the federal level, the deficit hawks — a well-meaning group, but prone to obsess on the wrong issue — will be on the march next year.
In short, the most likely outlook is for strong growth in the first half of the year, and stagnation thereafter. Businesses know this. So they will ramp up production to meet demand, but remain resolutely reluctant to hire new workers for the long term.
The bad jobs picture is more than just a sign of the failure of trickle-down. It is a measure of the lack of confidence that ordinary American business has in the long-term future. Businesses in America are hard to fool, and they are not expecting another long boom.
The election, in short, will be a race between the campaign propaganda of growth rates and the realities of scarce jobs, low pay and stagnant living standards. But reality has a way of holding its own in people’s minds. It’s not yet clear, by any means, that truth won’t prevail.
And so now comes George Bush, with two more great proposals to get the country moving again.
The first is immigration “reform,” ginned up just before a big summit in Monterrey, Mexico, to play to the Hispanic vote. The proposal promises minor conveniences to the estimated 8 million undocumented workers in this country. But at what price?
The new class of migrants would have to leave when their permits are up, unless renewed. They would have to leave if fired from their jobs. In a word, employers would judge who stays in the country and who is kicked out. Forget labor rights. Forget unions. Also forget family, home, neighborhood, things like that. Anyone wanting to protect those things will stay out of sight.
Worse, workers coming into the program would in practice be giving up their path to political rights. They would, for the most part, never become citizens. They would never get to vote. No one will represent their interests. No one will speak for their schools, their clinics, their wages. No one will stand in their defense when they are abused on the job, hurt, sacked, blacklisted, and sent home.
There is worse still. Bush made clear that this program is not just for workers presently in the country, as the press has mostly been reporting. It is not just for those who may soon arrive. No, it is far broader than that. Here’s the president’s speech: “If an American employer is offering a job that American citizens are not willing to take, we ought to welcome into our country a person who will fill that job.”
This program will permit any employer to admit any worker. From any country. At any time. The only requirement is that it be for a job Americans are not willing to take. But it is easy to create such jobs: Cut wages. Terminate the unions. Lengthen the hours. Speed up the lines. Chicken farmers have known this for years. Bush’s plan is a blank check for every bad boss this country has.
There is no reason why principal recruitment of new workers would be from Mexico. It might be, very massively, from China. Or perhaps from India, with its large English-speaking population. Temp agencies would go out on recruiting missions. Some of this competition may displace Mexican and Central American nationals presently working illegally in the United States (and hoping to stay). That would only drive them even further underground.
And for those who take up the program, register as temporary workers, and then see their permits expire? Bush is at pains to say that he expects this group to go home. But who will make them? Will the government organize a mass campaign of roundups and deportations? Or will the workers just quietly disappear back into the sub-underground of the truly illegal?
And for those who do go home, who will replace them? Another cohort of strangers? This is a program to create a rotating underclass of foreign workers, who never assimilate to American ways or adopt American values. It’s hard to imagine anything worse for our social life — more productive of petty crime — or for that matter, riskier for our national security.
For millions of citizen workers, what would happen? The answer is clear: Bad bosses drive out the good. Good bosses will turn bad under pressure. The terms of our jobs would get worse and worse. Who would want a citizen worker? A bracero will be so much cheaper, more loyal, and under control. And who among us, in our right mind, would want to look for work? Unless, of course, we needed to eat. Or pay the mortgage. I am not exaggerating: This is a threat to us all.
What indeed, would be left for citizens to do? Perhaps they will get first call on that other great Bush idea, the moon base and mission to Mars. Here we see the hand of Bush’s space science advisor, Karl (“Spirit”) Rove(r). NASA, you may have noticed, has just sent a mission to Mars. It was cheap as these things go, safe — and spectacular. Rove would take that money and put it into sending up a human: dumb, dangerous, and expensive. But I’d be for it, if we could send him on the mission. And his boss.
Happy New Year. We’ll know in November if it really is.
James K. Galbraith organized a conference on the “Crisis in the Eurozone” at the University of Texas at Austin on November 3-4. Papers and presentations can be found at http://tinyurl.com/3kut4k5, along with a video archive of the full meeting. More James K. Galbraith.
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