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The Republican Dilemma

The American public is fed up with Washington politics as usual. It is showing in the strength of the “outsider” candidates on both the Republican and Democratic side of the presidential race so far. But, the Republicans are faced with a steeper challenge, because this disaffection is deeply rooted in the stagnant wages and incomes of Americans.

Republicans want to paint the discontent as anger at President Barack Obama and his economic record. They claim to have an elixir that creates jobs. Here the facts fly strongly in the face of that claim. From when George W. Bush took office in January 2001 to January 2009, when he left, U.S. payroll employment went from 132.7 million to 134.0 million, a net change in the period of about 1.3 million. Bush was aided by a cooperative Republican Congress that passed his massive tax cut agenda to stimulate the economy after its 2001 downturn. From January 2009, when Obama took office, through this September, employment rose to 142.3 million, a net change so far of nearly 8.4 million; and a record of 60 straight months of job growth, a full 12 months longer than the next best record. Obama was hampered by a Republican Congress that voted unanimously against his first attempt to stimulate the economy and against his health care reform. That Congress has since continued to hold the federal budget and public investment hostage to repealing health care and defunding Planned Parenthood. So that greater job growth took place without help from the Republicans in Congress.

Employment change in the high wage sectors of manufacturing and professional and technical services was similarly poor under Bush. Manufacturing employment under Bush fell from 17.1 million to 12.6 million, a drop of 4.5 million. As of September, manufacturing employment under Obama was down about 0.2 million. Professional and technical services—the STEM area of engineering, architecture and computer services—has been somewhat better. Under Bush, those jobs increased from 6.9 million to 7.7 million, for growth of about 0.8 million; while under Obama, they have now reached 8.7 million, an increase of a little more than 1.0 million.

When it comes to job growth, the Republicans have nothing to offer. On income growth for the middle class, Americans are frustrated. Median household income, adjusting for inflation, fell 2.7% under Bush. So far, it has fallen 2.3% under Obama. So a key problem is that the policies pursued so far have not addressed the angst of the voters, who have been stuck with flat incomes for nearly 15 years. Whether it is the slow job growth under Bush or the more robust job growth under Obama, more jobs are not enough.

Republican presidential drop-out Scott Walker thought the idea was to continue attacks on unions and the rights of workers to organize. Again, the facts get in the way of Republican wars on unions. American's wages and productivity, and indeed equality, rose with higher productivity when the share of Americans in unions was rising. In the past 30 years, while union membership has been declining, productivity has slowed, wages are stagnant and Americans have been getting ahead only by working more hours.

The facts are on the side of Americans who are convinced they have become better educated and that they are working harder but are not seeing their incomes go up. Americans understand it isn’t about them, it’s the rules of the economy that matter and those rules are being set by the 1% to tilt the outcomes in their own favor. They are convinced that more “trickle-down” economics won’t help them. They will not be fooled into believing that tax cuts to the wealthy mean pay raises for the rest of us. And they know that talk about defending big corporations and whining about regulations and corporate tax rates doesn’t address the needs of voters. They want to hear about leveling the playing field.

To that end, Obama held a Summit on Worker Voice, it was really about rebalancing the out-of-whack workplace, which is tilted in favor of bosses. Raising the wages of workers is an issue that won’t be solved without addressing this imbalance. What voters want to know is about raising wages. Raising the minimum wage is a start; paid leave is another; but so is ending retaliation against workers who want to get raises, or pensions, or sick days.

Republicans blaming Obama for the state of the economy will not work. The facts are on the president's side, he's been a better steward of the economy than the Republicans would have been. The challenge for politicians in the debates ahead is to advance policies that level the field for workers. The conversation was started at the White House summit, but it will be expanded to the topic of leveling the playing field when it comes to trade agreements, too.

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Barack Obama
raising wages

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