The Bush Recovery: Falling Wages And Fewer Jobs Than Clinton
Exactly how sickly is Bush’s record on job and wage growth? Compare his record coming out of a recession against the record posted by his father and Bill Clinton:
The nation's employers added 110,000 jobs last month, according to today's report from the Bureau of Labor Statistics (BLS), which was about half the amount expected by forecasters. March's payroll gains were the lowest since July of last year, and were sharply lower than the February 2005 gain of 243,000. The recession started exactly four years ago last month, yet private-sector payrolls remain 389,000 below their pre-recession level, a historically unprecedented example of weak employment growth.
After a strong surge in the spring of 2004, payroll growth has been quite subdued, especially compared to prior recoveries. Only two of the last 10 months have seen job growth of more than 200,000. Averaging over the past six months, the economy has added 174,000 jobs per month; the analogous average for the early 1990s recovery at this stage is 338,000 jobs per month, reflecting the historical norm for contemporary recoveries.
Despite the fall in unemployment in the household survey, the share of the unemployed who are long-term jobseekers--that is, those who have been looking for at least six months--ticked up from 20.5% to 21.5%, as did the average length of joblessness, which increased from 19.1 to 19.5 weeks. This large of a gap between a low unemployment rate and long jobless spells is historically anomalous.
Historically, unemployment rates between 5.0 and 5.5% have been associated with long-term joblessness rates of 11.9% and average jobless spells of 12.9 weeks, far below the current levels. Clearly, the labor market is not nearly as tight as the 5.2% unemployment rate suggests.
And about wage growth?
The economy has been in recovery since late 2001 and has been creating jobs since the fall of 2003. But despite the upward trend for jobs, the hourly wages of most workers (the 80% of workers who are in manufacturing or non-managerial services) have failed to keep up with inflation over the last two years. In the first quarter of 2005, real (i.e., inflation-adjusted) wages were 0.2% below those of the same quarter a year earlier. Real wages have fallen 0.3% over the last two years after rising by 2.0% over the prior two years starting in early 2001.
But keep on buying those goods folks. It’s good for the economy. Don't worry if you can't pay your bills or if mortgage rates go up, or if the housing bubble bursts this summer. Everything is fine, now that we have fixed the bankruptcy laws, right?