Problems That Ohio Faces

PROBLEMS THAT OHIO FACES -- (House of Representatives - July 20, 2004)

The SPEAKER pro tempore. Under the Speaker's announced policy of January 7, 2003, the gentleman from Ohio (Mr. Strickland) is recognized for 60 minutes as the designee of the minority leader.

Mr. STRICKLAND. Mr. Speaker, I thank the Speaker for his recognition, and I am happy to be joined this evening by the gentleman from Ohio (Mr. Ryan) and the gentlewoman from Ohio (Mrs. Jones), and later we will be joined by the gentleman from Ohio (Mr. Brown). We are going to be talking this evening about the Nation, but especially about some of the problems that are faced by those of us who live in the State of Ohio.

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Ms. SCHAKOWSKY. I appreciate this discussion tonight and just wanted to make a few points. The gentleman said that there has been talk from the Bush administration, from the President himself, on how there has been this great recovery. I wanted to point out what was in the Wall Street Journal today that talks about that, yes, for some sectors of the economy, there has been a recovery.

They talk about a two-tier recovery that is going on where wealthier households are the big beneficiaries of a stronger stock market and higher corporate profits and bigger dividend payments and boom in housing, but ordinary people are not seeing that same kind of recovery.

And they show some very telling statistics here. For example, hotel revenue was up 11 percent in the first 5 months of 2004 at luxury and upscale chains, but just up 3 percent at economy chains. At the five-star Broadmoor Hotel in Colorado Springs, Colorado, $600-a-night lakeside suites are sold out every day through mid-October.

Mr. STRICKLAND. Mr. Speaker, reclaiming my time, I think this may indicate something that I think we intuitively feel, that under this administration the wealthy have done very well. There are people in this country who have got significant tax breaks, who are capable of paying $600 a night for a hotel room. Most of my constituents certainly could not do that, and I think this is just one example of how the rich are being well cared for by the Bush administration. The working middle class is being squeezed, as Senator John Kerry and Senator Edwards have been talking about as they have traveled around this country. There is a middle-class squeeze. The wealthy are doing very well.

Ms. SCHAKOWSKY. Mr. Speaker, let me give the gentleman a couple of other examples that will kind of surprise him, I think. At least I do not know people who spend this kind of money. At high-end Bulgari stores, and I may not be pronouncing it right because I am not sure what they are, but "at high-end Bulgari stores, meanwhile, consumers are gobbling up $5,000 Astrale gold and diamond 'cocktail' rings made for the right hand, a spokeswoman says. The Italian company's U.S. revenue was up 22 percent in the first quarter. Neiman Marcus Group, Inc., flourishing on sales of pricey items like $500 Manolo Blahnik shoes, had a 13.5 year-over-year sales rise at stores open at least a year. By contrast some 'same stores' sales at Wal-Mart Stores, Inc., retailer for the masses, were up just 2.2 percent in June. Wal-Mart believes higher gasoline costs are pinching its customers. At Payless ShoeSource, Inc.," and I know about Payless Shoes, "which sells items like $10.99 pumps, June same-store sales were 1 percent below a year earlier.

"A similar pattern shows up in cars. Luxury brands like BMW, Cadillac, and Lexus saw double-digit U.S. sales increases in June from a year earlier. Sales of lower-tier brands such as Dodge, Pontiac, and Mercury either declined or grew in the low single digits."

So it is not just the gentleman that thinks that maybe there is a difference, but this economist from J.P. Morgan, Dean Maki, says: "To date the recovery's primary beneficiaries have been upper-income households." He said, "Two of the main factors supporting spending over the past year, tax cuts and increases in stock wealth, have sharply benefited upper-income households relative to others."

So we have the good times for upper-income Americans and pretty hard times or certainly not better times for most other Americans.

If I could just go on for another minute, there was an article also in the New York Times on July 18. The headline was: "Hourly Pay in U.S. not Keeping Pace with Price Rises," and the lead is: "The amount of money workers receive in their paychecks is failing to keep up with inflation." So this is really the relevant number. Even though we may be seeing some increase in jobs, what we are finding is that wages are going down, that American workers are having a hard time keeping up with inflation.

Last Friday, the Bureau of Labor Statistics reported that hourly earnings of production workers, nonmanagement workers ranging from nurses and teachers to hamburger flippers and assembly-line workers fell, wages fell, 1.1 percent in June after accounting for inflation. The June drop, the steepest decline since the depths of the recession in mid-1991, came after a 0.8 percent fall in real hourly earnings in May.

And one other article I wanted to quote from the New York Times on Sunday, if I could, and that will end my comments: "If President Bush was correct when he asserted recently that the economy was strong and getting stronger, why are so many people not only out of work but also looking for jobs?

"Mr. Bush noted with evident relief that the Nation had added 1.5 million jobs since last August. Senator Kerry and his supporters complain that the country still has about a million fewer jobs than when Mr. Bush took office.

"But," the New York Times says, "neither statement captures properly the shortfall of jobs that has built up over the last 3 years. An accurate estimate is not 1 million but 4 million, and possibly higher."

So the real job numbers, the real numbers of the shortfall of jobs, is about 4 million jobs. This tells us average workers are not even keeping up with inflation, and this Wall Street Journal article tells us today for some people they can go out and buy $5,000 cocktail rings made for the right hand, that there is a boom business in that. We have a two-tier recovery. Ordinary people are not feeling it.