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In his State of the Union address, George W. Bush pledged to help Americans gain the skills they need to find work, but critics wonder where those jobs will come from
January 22, 2004
When President George W. Bush talked about the economy in his State of the Union Address, he sounded upbeat and optimistic. “The economy is strong, and growing stronger,” he said, citing the 8.2 percent economic growth in the third quarter of 2003 and all-time-high home ownership. “Manufacturing activity is increasing. Inflation is low. Interest rates are low. Exports are growing. Productivity is high. And jobs are on the rise,” he added.
But for many Americans, the number of new jobs isn’t rising fast enough. AFL-CIO president John Sweeney complained Tuesday that, despite signs of economic growth, “good jobs are scarce, unemployment is high and working families are struggling to pay the bills.”
The AFL-CIO, a federation of American unions that includes more than 13 million workers and tends to lean left, says many of its members saw no relief the proposals Bush outlined in his State of the Union speech. About 2.3 million jobs have been lost since President Bush took office. In December 2003, just 1,000 new jobs were added—well below the figure predicted by most economists—and long-term unemployment surpassed a 20-year high. Nearly one quarter of the jobless, or about 2 million people, have been out of work for more than six months. Will Bush’s job-training and tax-cut proposals help them to find jobs in 2004? NEWSWEEK’s Jennifer Barrett spoke with Chris Owens, the AFL-CIO’s public-policy director, about the plans Bush outlined in Tuesday’s speech. Excerpts:
NEWSWEEK: What did you think of the president’s assessment of the economy in his State of the Union address?
Chris Owens: In terms of the issue that certainly our members, and most Americans, are most concerned about—jobs and, particularly, middle-class jobs—I think the president struck out. He acknowledged the problem, but the solutions he proposed are the same strategies he’s been pushing since he took office. More tax cuts, more trade deals, more freeing companies from regulations. We tried those and they don’t work and they do long-term damage. We need a recognition that we have a serious jobs crisis in this country, masked somewhat by the fact that the unemployment rate has gone down. But that decline is only because so many people have either given up looking for work or young people have not started looking for work because they are very pessimistic about their opportunities.
How serious is the jobs crisis?
We have lost 2.3 million net jobs lost overall, since Bush took office. We have around 15 million people who are either unemployed and want to work or are working part-time because they can’t get full-time jobs. That number really hasn’t changed much in the last several months. We have substantial job loss and a lot of people who are unemployed, or underemployed, or who have dropped out.
It didn’t sound like the administration plans to make many changes in its approach. When President Bush talked about job creation Tuesday, he said: “We must continue to pursue an aggressive, pro-growth economic agenda.”
If things continue along at this pace, it will be the first time since the Depression that a president is on track to finish his term with net job loss. There may have been periods when we had recessions when we experienced greater job loss, but the recoveries have been much stronger. We have experienced net job loss in both 2002 and 2003—the first time since 1944 to 1945 that we have had two years of consecutive job loss. On average, we have only added 57,000 jobs a month since last June, after his tax-cuts proposal. Just to accommodate new workforce entrants like people graduating from college or those who had children and are looking for work, we need to add at least 150,000 new jobs a month.
But President Bush said his tax-relief package is working and asked Congress to make the tax cuts permanent. Would you support such a measure?
I would say that certain aspects of the tax package like the child-tax credit and marriage-penalty provision, which actually benefit middle- and low-income families and put more money in their pockets that they in turn put into the economy had the benefit of keeping the economy from sinking even further. But we’ve had three yeas in a row of multitrillion-dollar tax cuts and what we have to show for it is the loss of 2.3 million jobs. We hardly need clearer evidence that the tax cuts aren’t working to create jobs. On the other hand, they are contributing to huge long-term budget deficits.
There are other positive signs that the economy is recovering. Shouldn’t jobs follow suit?
For workers and their families, the indicators that reflect what’s happening to them like jobs, wages, and benefits, are not much better. On a number of fronts there is a recovery, but it is not trickling down to jobs. So it is not having the effect for average middle class families as it has for the very wealthy or for corporations. There is also a real concern among Americans that we are losing good middle-class jobs and those we are adding pay less, provide fewer benefits and are more likely to be part-time or contract work. There is no security they provide.
In his speech, President Bush said much of the job growth will be found “in high-skilled fields like health care and biotechnology.”
The jobs we are now adding are in hospitality and accommodations and, yes, health—but, basically, they are jobs that don’t pay as much. They don’t provide the same benefits. We are losing manufacturing jobs and losing information-services jobs. We actually lost more manufacturing jobs since President Bush assumed the presidency that December than in the previous 22 years. We lost 437,000 information-services jobs between January 2001 and December 2003. That is 80 percent of the number we actually added between January 1998 and December 2000. The Economic Policy Institute has done an analysis that the jobs added in the economy between November 2001 and November 2003 pay 13 percent less than the kinds of jobs we were losing. And this is a flip from 1998 to 2000 when we were adding jobs that actually paid more than those we were losing. In part this is a function of what is changing in the economy.
Bush did say that America’s economy is changing, but perhaps, not in the way you’re talking about. He indicated that part of the issue is teaching workers the new skills required for the new jobs.
What’s peculiar about his assessment is that if you look at the jobs that are likely to experience the most growth over the next 10 years they are fairly low-paying, low-skill, on-the-job-training kinds of positions. The notion that the problem in terms of the jobs crisis is that workers aren’t skilled enough misses the deeper problem, which is that no matter what workers do there is nothing that stops corporations from picking up and leaving the country or shipping the work abroad. Whatever workers do to prepare themselves for jobs for the future, they can’t protect themselves. Any job that can’t be nailed down to a desk here is at risk. It sounds good to say we have a skills mismatch between today’s young people and the jobs of the future and that we are going to train people. But the real crisis is that we don’t have a commitment on the part of corporations in the United States to provide and maintain jobs for workers here, and we don’t have government policies that insist on that kind of corporate patriotism.
So will Bush’s proposals for increased funding for job-training programs and community colleges, and expanded advanced placement programs in low-income schools have much effect?
Actually, since he became president, he has proposed job-training cuts of about $800 million. It is not clear where he is talking about getting that money now for training and whether it would be new money or shifting around money to cover that. In general, job-training programs are underfunded. We fully support increased funding for job training. But it doesn’t serve anybody’s interest to engage in some kind of smoke-and-mirrors game.
What about the president’s proposal to give legal status to millions of illegal immigrant workers here?
We feel like the proposal misses the boat in important ways that don’t really address the more serious problems with existing situation. What this program does is create a huge temporary employment program primarily benefiting companies. They would still control everything, call all the shots. President Bush was also clear last night that workers who participate in these programs and come out of the shadows now would not be put on the path toward citizenship. Obviously, there are some undocumented workers who might want to go home, but many came here because they want to stay. For most undocumented workers, we don’t see it as a plan that in any substantial way improves their situation. We have a history of bad experiences with these sorts of guest-worker programs, both in terms of having these workers in a sort of indentured-servant situation and in the effect, which is to drive down wages and reduce benefits and security for workers already here.
What would you have liked to hear Bush address in his State of the Union Message?
He did not say that he is calling on Congress to extend the unemployment insurance program. We now have 90,000 unemployed Americans running out of their state benefit entitlements. They have nothing to fall back on. There is money to fund the emergency unemployment program. He should have called on Congress to renew the program. Also, he should have said that he makes a commitment to workers that he will not take away their overtime rights [an issue being debated in Congress]. We believe he also should have said that workers need skills but they also need jobs, and that he makes a commitment that our trade policies and our tax policies will support jobs in America.
In the view of your union, what would help improve the jobs situation?
Tax cuts for the very wealthy should be rolled back and the money we save should be invested to create jobs and meet critical needs, like building new schools and improving basic infrastructure. Also, states need more assistance from the federal government. The states have had the worst fiscal crises since at least World War II, including really crushing Medicare burdens, largely because of job losses. They have had to cut jobs, and police and fire department budgets. We believe more resources need to go to the states and that in turn would create more jobs and restore important programs.