More on Bush's Attack on Americans

From DailyKos. More data on the Republican attack on the middle class in America. The same middle class that returned Bush to the office he stole with the help of the Supreme Court in 2000. Of course, none of this matters if the Republican Party can keep the collective middle class panties in a bunch over the dreaded issues of gay marriage and that blockbuster of national security issues Terri Schiavo. The radical religious right Repuclican party wants to intrude into every private intimate aspect of our lives, and they want to turn us all into wage slaves while they do it.
bondad has done the grunt work. Read.

How Bush is Destroying the Middle Class

by bonddad
Sat Apr 30th, 2005 at 14:47:57 PDT

Update [2005-4-30 17:47:57 by Armando]: From the diaries by Armando.

For the last week, I have run a series of diaries titled "It's the Economy, Stupid", highlighting the negative effects of Bush's policies on the middle class. Because we are already moving into the beginnings of the 2006 election cycle, I wanted to take all of these diaries and construct one coherent argument that all Democrats could use for the upcoming elections. I have added some new information and arguments, and taken out some of the editorial fat.

The economy will be very important for all candidates for office. It is imperative they have the ability to concisely describe Bush's failures. Bush continually talks about an ownership society. What he really means is a society where the corporations own the workers.

I have documented where information comes from if you want more information. None of my material is copyrighted. Please copy it and use it wherever and whenever you want. Whenever you hear the Republican talking points about how they are better at the economy - hit them with these facts and make them think about what is really going on.


Diaries :: bonddad's diary :: :: Trackback ::

Losing High Paying Jobs

From 2001-2002, the US economy lost a large number of jobs that either make things or require technical knowledge. Notice, how new jobs do not involve new products or technologies. This information is from the Bureau of Economic Analysis.

Manufacturing - 1.1 million jobs
The information industry - 225,000 jobs,
Professional, scientific, and technical services - 225,000 jobs,
Computer systems and design - 140,000 jobs
Wholesale Trade - 120,000

And what areas of the economy increased their number of employees from 2002-2003?

Finance and insurance + 22,000
Health Care and Social Assistance + 442,000
Food Service and drinking + 153,000
Education + 93,000
Government + 373,000

Let's move forward 1 year, from 2002-2003, the last full year of information in the BEA's database. The following industries lost jobs.

Manufacturing - 740,000
Information - 185,000
Computer and Electronic Products - 145,000
Professional, scientific and technical -15,000

And the following industries added jobs

Food Service and Drinking Places 151,000
Government + 85,000
Education + 64,000
Health Care and Social Assistance + 345,000

Why does an economy have to make new products to grow? Because in the natural chain of economic events one product naturally leads to new products. Let me use computers as an example. First, there is the actual computer that has to be assembled. This requires parts and labor, creating one group of jobs. The computer needs software, which requires programmers - more jobs. The computers have to be sold, which requires wholesalers, retail outlets and sales people yet more jobs. And lets not forget all of the ancillary products that resulted from computers - networks and the internet.

New products sustain the middle class by providing high-paying jobs. Detroit led the way n the 1950s. The high-tech industry employed millions of workers in the 1990s who benefited from high wages. The information jobs from the 1990s are going away, and we are not replacing them with the next wave of technologically innovative products.

By not creating new products and technologies or products the US is resting on its economic laurels, letting other countries make the products for us. As a result, new jobs on the cutting edge of whatever market are not benefiting the US. Instead, we are importing products we use to make on credit instead of the wages that should result from the "next big thing."

There are several areas of development where the US should take the lead immediately. The first is alternative energy technology. Most of us have recently experienced the pain at the gas pump. There is a huge market for non-oil based energy. The second is nano technology. This is a revolutionary area of micro technology that will literally change the way the world produces goods.

Stagnant Wages

Economists generally agree the economy needs to create 150,000/month to keep up with population changes, lost jobs etc.... According to the Bureau of Labor Services, since 2001, there are only 5 months when the economy created more than 150,000 jobs - March, April, May and October 2004 and February 2005. In other words, we are not creating jobs fast enough to absorb new and displaced workers.

This has lead to an increasingly smaller percentage of the population being employed. In 2000, 64.4% of the population was employed. That percentage has dropped to 62.3% in 2004. In other words, the number of people working as a percentage of the total US population is decreasing.

This leads to poor wage growth because employers can essentially say to prospective employees, "I can get someone who will do the job for lower wages." Wages grew 3.1% in 2002, 1.7% in 2003 and 2.3% in 2004. Compare this wage growth to inflation, which increased 1.9% in 2002, 2% in 2003 and 2.3% in 2004. In other words, wages rose below the rate on inflation for the past 2 years. In other words, the average worker is making less money for the last 2 years.

A little inflation is a good. It indicates the market attaches more value to certain products and that producers have the ability to make a profit. Therefore, to meaningfully participate in the economy, wages have to increase faster than the rate of inflation for workers to maintain their standard of living. Because wages are not increasing, the middle class standard of living is slowly slipping. We are already seeing two very negative effects of this slippage.

Stagnant Wages and Poor Housing

The first area negatively impacted is housing. A report titled The Housing Landscape for America's Working Families issued by the Center for Housing Policy Leadership highlights the problems working families are facing, partly caused by their stagnant wage growth.

The report defines a working family as a family that makes from the minimum wage to 120% of the their state's median income.

The report defines a critical housing need as a household that either lives in dilapidated housing or pays more than half of their income for housing.

Although the number of critical needs households declined slightly to 14.1 million from 2001 - 2003, the number of low-to median income working families increased by 2 million from 1997 -- 2003.

Stagnant Wages and Escalating Medical Costs

The percentage of working families of the total of all families with a critical housing need increased from 23% - 35% from 1997 - 2003.

Let's stop right there and coordinate that number with some other statistics I've found lately. From 2003-2003, the US lost about 2.5 million manufacturing or technology jobs and gained 1.3 million medical, restaurant and drinking establishment jobs. Does anyone see a pattern?

Of the 14.1 million critical housing needs, 2.2 million are immigrants, 3.3 million are elderly, 3.8 million are median to low-income families and 1.2 million are marginally employed.

I have an in idea. Considering Social Security is the sole source of income for most of the elderly, let's privatize it so they can now make less money and more of them can be homeless.

55% of critical needs families own their own homes. That's 7.7 million who either live in dilapidated housing or pay more than half their salary for mortgage payments. I wonder how many have ARMs?

4.37 million are families. This number increased by more than 76%, from 2.4 million in 1997.

2.2 million are single mothers.

Stagnant Wages and Escalating Medical Expenses

Medical expenses are the second area where stagnant wages are destroying the middle class' standard of living. Medical expenses are rising faster than inflation. More importantly, the method of paying for medical care is taking more and more disposable income. The USA Today story (Medical costs prove a burden even for some with insurance) clearly illustrates the problems.

"More workers are facing larger medical bills as employers increase what they must pay for doctor visits, drugs and hospital care in an effort to control health care costs. Some employers are embracing high-deductible policies -- requiring workers to pay $1,000 or more a year in expenses before insurance kicks in. Such policies are also common for the self-employed, who buy their own insurance, because premiums are generally lower."

So, let's say you have a policy that costs $400/month. Not only are you paying the premium, you're also responsible for a larger portion of upfront fees in the forms of deductibles and backend fees in the form of prescription expenses. Now instead of a mere $400/month, you're also responsible for a higher percentage of total expenses, which are rising faster than the rate of inflation, which is increasing faster than wages.

Bush loves to claim that his medical savings accounts will help workers cover these new costs. These accounts have to be used to be effective. And most Americans don't save. Part of this is the excessive materialism run rampant thanks to cheap money and rising housing prices. However, stagnant wages - growing at a rate less than inflation - are also partly responsible. How can you save when you're barely making ends meet?

Conclusion

This is our issue. There are hard-working honest people in the US who want to live the classic American life and can't anymore. They need our help. We have to develop policies that help them achieve what everybody wants - an affordable home, the ability to provide medical care for their family and a safe retirement.

The Republicans only benefit the top 5%. Democrats care about everybody else.

Display: Threaded Minimal Nested Flat Flat UnthreadedDynamic ThreadedDynamic Minimal