Gearing up for the president’s State of the Union address at the end of January, the Bush administration is cheering about an economy that’s been growing recently at an annual rate of about 4 percent.
But that growing economy belongs to someone else—not to the regular working people of America. At the start of a new year, it’s a good time for an economic reality check.
Our wages and incomes are falling, not rising. Although the productivity of America’s workers is growing, inflation-adjusted wages and household incomes are falling. The median income of our households has fallen for five years in a row when adjusted for inflation—to $44,389 in 2004 from $46,129 in 1999. The average rank-and-file worker now earns less each hour than when the recession ended in 2001, after accounting for inflation.
Health care costs are consuming more and more of our declining incomes. The premiums workers pay for family health coverage jumped 67 percent from 2000 to 2005. And employers continue to drop workers’ health care: In 2004, 3.7 million fewer people had employer-provided health insurance than in 2000.
Poverty is rising. Five million more people—including 1.4 million more children—have fallen into poverty since 2000.
Job growth isn’t even keeping up with population growth. We have only 1.3 percent more jobs today than four years ago, at the start of the last recession. Just to keep up with population growth, the economy should have added 3.3 million more jobs.
We’re surviving—for now—by going deeper and deeper into debt. Household debt has swelled 35.7 percent in the past four years, according to the Economic Policy Institute, and we’re spending more than ever in history struggling to pay off debt. For the first time since World War II, personal savings are in the negative range. So it shouldn’t be surprising that personal bankruptcies have hit historic highs, up nearly 29 percent from 2000 through 2004 and still on the rise.
We have lost the foundations of economic security. Employers are retreating as fast as they can from their traditional role as providers of health care and retirement benefits as well as paychecks—and government leaders have been trying to do the same. The Bush administration and congressional allies are hell-bent on cutting Medicaid, Medicare, child support and other basic family survival programs—and they still fantasize about privatizing Social Security.
So just where are the benefits of this growing economy we keep hearing about going?
Corporate profits. Since the end of the recession, total corporate profits have grown nearly six times faster than hourly wages.
CEO pay. In 2004, the average CEO of a major company received $9.84 million in total compensation—a 12 percent increase over 2003 CEO pay.
The rich beneficiaries of tax cuts. Tax cuts for the very wealthy pushed by the Bush administration and its allies gave millionaires an average break of $103,000 last year—and two more millionaire tax cuts on tap will give them another $19,000 on average.
This is not what I call “growth.” I call it “theft.”
