Some Perspective

So Bush has been crowing about 112k jobs created last month, which is the best job growth since December 2000. All y'all know I'm no economist, but I was curious all the same about what's been really happening with unemployment, the economy, and Bush's tax cuts over the past 3 years.

Bush signed the first tax cut bill into law on June 7, 2001, and has also cut taxes in 2002 and 2003. For an analysis of the impact on taxpayers, check out Citizens for Tax Justice.

It's interesting to note that soon after the first round of cuts went into effect, our recession ended, at least by traditional definitions related to GDP growth. Here's a chart from the US DOC:



So gosh, everything's been hunky dory since 4Q01, right? Well you and I know that this "boom" hasn't had a great deal of benefit for American workers. As the Fed observed last summer (PDF), increased reliance on temp workers and overtime has meant our "recovery" has been distinctly jobless for quite some time.

It's no wonder BushCo likes to focus on the somewhat bogus unemployment rate, currently at 5.6%. Here's a chart from the DOL showing the rollercoaster since 2000 (from the selected unemployment indicators, seasonally adjusted data):


Kinda nice dip, getting us back to the same level as 2 years ago. Yet it's still 1.7% higher than December 2000. What's more telling are the alternative measures of labor underutilization.

One measure I looked at was "total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers". This looks like it gets closer to the "true" unemployment that some people talk about (basically taking into account all people who can't get work that meets their needs):


I'd say this more accurately illustrates the plight of the American workforce. To be fair, we are seeing improvement here, though not as marked if you just look at the unemployment rate. Things are back to where they were 1 year ago, but still the rate is 0.5% worse than 2002, and a full 3% higher than the December 2000 figure.

To give you a sense of the raw numbers, back in December 2000 there were 1.1M marginally attached workers, 265k of whom were discouraged ("not currently looking for work specifically because they believed no jobs were available for them" according to the BLS). Last month, the total was 1.7M, 432k of whom were discouraged. That's about one and a half times the 2000 figures.

What's more staggering is the picture painted by the unemployed persons by duration of unemployment data. Here's the chart of folks jobless for more than 27 weeks:


Again, there's improvement in this area, but it is very slight. We still have more long-term unemployed people than we did 1 year ago. The figure is also greater than it was 2 years ago. In fact, the number is larger than it was last month. What's more, there are roughly 3 times more long-term jobless than in December 2000.

So yeah, I'm glad there were 112k jobs created, and unemployment dropped 74k in January. And maybe Bush's tax cuts and wars have helped the GDP grow. Unfortunately we have a long, long way to go, and the "recovery" still isn't doing diddly for average Americans. In fact, all of our current economic growth has come at the expense of our children with ballooning Federal deficits and few jobs in sight to help pay it all off. That says to me that this is not sustainable, and we're only going to be back at square one (or worse) in the future.

But Americans don't tend to vote with the future in mind. Okay, so are we better off than we were 4 years ago? Obviously not. Still, I'm a reasonable fella and I'm willing to let Bush slide regarding 2001. Go ahead and blame the 2001 recession on Clinton (don't forget to credit Clinton for the expansion, though). Go ahead and blame 9/11 for the spike in unemployment at the end of 2001.

So, are we better off than we were 2 years ago? Have the 3 tax cuts Bush pushed - and now wants to make permanent - created all the millions of jobs he promised? Alas, the answer is still "obviously not"*.

Looking at this politically for a moment, here we are in early 2004 with most Americans saying the tax cuts have not helped the economy, and I would agree. That's not good news for Bush since the economy and jobs are the most important issues in determining how Americans will vote this year. And as support for the Iraq war dips below 50%, I have a hard time believing Bush will defeat the eventual Democratic nominee in November.

People are starting to get the hint that a vote for Bush is a vote against their own interests. About bloody time.

ntodd

* I almost wrote "sadly, no", but I wouldn't want to steal Seb's line.

[Update: fixed some typos and miscellaneous formatting.]

['nother update: fixed 3 of the charts. Apparently they disappeared from the BLS webapp after a while, so I stored them on my host. Thanks to faithful reader Mustang Bobby in the comments for the heads up.]  ¶ 2:02 PM