In recent weeks the Bureau of Labor Statistics has released year-end data for employment, productivity and a variety of income statistics. We are now in a position to assess the first six years of the Bush administration in terms of these important measures.
Early each month, when the employment figures are released, the White House triumphantly issues a press release celebrating the number of jobs that were created during the preceding month and since August 2003. But the Bush-Cheney administration entered office more than two and a half years before August 2003.
The job-creation numbers since August 2003 do appear to be impressive. Nonfarm employment, for example, increased by 7.329 million jobs from September 2003 through December 2006. Compared to previous administrations, however, the overall Bush administration jobs numbers are significantly inferior, including the numbers since August 2003.
During the 2001-2006 period, nonfarm employment has increased by 4.663 million jobs, reflecting an average annual employment growth rate of 0.6 percent. Over the 2002-2006 period (i.e., following the 2001 recession), nonfarm employment has increased by 1 percent per year. By comparison, nonfarm payrolls grew on average by 3.1 percent per year during the Carter presidency (which, like the first and second Bush administrations, also included a brief recession); 2 percent per year during the Reagan administration (which included the steepest post-World War II recession); 0.6 percent per year during the first Bush administration; and 2.4 percent per year during the Clinton administration.
The 4.663 million jobs created during the 2001-2006 period amount to fewer than 65,000 per month. More than 1.3 million (18,100 per month) of these jobs were added in the government sector. Thus, fewer than 47,000 nonfarm payroll jobs have been added each month (on average) in the private sector during the last six years (0.5 percent per year). The Reagan administration added more than 150,000 private jobs per month during its eight years. Private payrolls increased by nearly 225,000 jobs per month during the Clinton administration.
Confining ourselves to the 40-month cherry-picked period (September 2003 to December 2006), we find that private-sector employment has been rising by 170,000 jobs per month (1.8 percent per year). Throughout the eight years of the Reagan and Clinton presidencies, private nonfarm payrolls grew by 2.3 percent and 2.7 percent per year, respectively. In other words, private employment grew more than five times as fast during the Clinton administration as it did during the first six years of the Bush administration. Compared to the average annual rate of private job growth since August 2003 (1.8 percent), the eight-year Clinton rate (2.7 percent) was still 50 percent faster.
Productivity (output per hour) in the nonfarm business sector was 18.6 percent higher during the fourth quarter of 2006 than it was six years earlier. However, the real (i.e., inflation-adjusted) average hourly wage for private-sector production and nonsupervisory workers (80 percent of the workforce) was only 3.5 percent higher over the same six-year period. During the previous six years (1995-2000), this wage increased more than twice as fast. More telling is the fact that the real average hourly wage during last year’s fourth quarter had increased less than one-half of 1 percent compared to the three-month period preceding the onset (September 2003) of the Bush administration’s cherry-picked period of labor-market ecstasy. The average real hourly wage during 2006 was actually less than the average wage during 2002. Average real weekly earnings for these same production and nonsupervisory workers in 2006 were essentially unchanged from their 2002 level.
In a new series of income data, the Labor Department recently reported that the real median weekly earnings of wage and salary workers employed full-time during last year’s fourth quarter had increased only 0.6 percent since the fourth quarter of 2000. For men working full-time, median weekly earnings actually declined by 0.8 percent over the same six-year period. (Half of workers are below the median and half are above.) Remember, productivity had increased nearly 20 percent over the same period.
The Census Bureau publishes annual income data for households and full-time workers. The latest data are for 2005, whose annualized productivity level was 16.5 percent higher than 2000’s and 23.3 percent higher than that in 1998. Nevertheless, the median household income in 2005 was 2.7 percent below the 2000 median level and still less than the median level in 1998. Real median earnings in 2005 for full-time, year-round male workers were less than their 1998 level.
In its fact sheet issued after the January employment numbers were released, the White House reported that “real after-tax income per person has risen by 9.8 percent” since 2000. Two facts should be kept in mind. First, the average annual rate of increase (1.6 percent) is less than the average annual rate during the Carter administration (1.9 percent), the Reagan administration (2.5 percent) and the Clinton administration (1.8 percent). Second, the national debt has increased by more than $3 trillion (i.e., more than $500 billion per year) since Mr. Bush entered office, presaging large tax increases in the future. (The national debt actually declined by more than $100 billion in 2000.)
By Andrew P. Napolitano
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