Happy Cheap Labor Day

Press Release - 9/3/2006

DUBLIN, CA—If you've been checking online, it's this year's hot phrase. Not just Labor Day, but "Cheap Labor Day." While this indicates the widespread gut feeling that only the rich are doing well under the Bush administration, figures show the emotional take is not far from the truth.

Data released this week by the U.S. Census Bureau shows that inflation-adjusted median household income remains below where it was in 2000. For families headed by someone under age 65, annual income fell by $275 between 2004 and 2005.

Speaking to supporters in Dublin, Jerry McNerney, Democratic candidate for Congress in the 11th district, said, "As we've all suspected, only the wealthy have seen their income rise since the last economic peak. While income for top-earning households rose in the last five years, everybody else fell—from about 3 to 5 percent. This uneven recovery hits hardest at those on the bottom rungs of our economic ladder."

In "The Not-So-Good Times," Heather Boushey, a senior economist for the Center for Economic and Policy Research, notes that, while gross domestic product has been increasing "at a healthy rate," wages are not keeping pace, saying, "there are 3.9 million Americans not at work today who would be if the employment rate had rebounded to where it was in 2000."

In contrast, corporate profits after taxes rose 14.8 percent in the first three months of the year. As McNerney observes, "It's just that most of us aren't seeing much of it."

Lee Price and Jared Bernstein at JobWatch say real hourly wages, "fell for most workers." They attribute the decline in real wages, in part, to the erosion of union power and the fall in the real value of the minimum wage.

Interestingly, they also call the Bush tax cuts a failure saying, "...in reality, private-sector job growth since 2001 has been disappointing, and a closer look at the new jobs created shows that federal spending—not tax cuts—are responsible for the jobs created in the past five years." They cited increased defense spending in particular.

The Bush administration is fond of pointing to strong economic growth in 2005, and impressive productivity gains. It's too bad it has been leaving most of the country behind. Wages and salaries now make up the
lowest proportion of the economy since the government began keeping records in 1947, while corporate profits have climbed to their highest share since the 1960s.

According to McNerney, "Under this government, American workers no longer share in the wealth they help to create. This Labor Day, we need to truly honor labor. We cannot grow jobs by continuing to start wars. We must end the tax-cut-and-spend mentality in Washington, D.C. and take care of our working families instead of just the rich."

http://www.jerrymcnerney.org/press_story.asp?id=19