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“NATION'S TRUE ECONOMIC PICTURE” mentioning the U.S. Dept of Labor was published in the Extensions of Remarks section on pages E295-E296 on March 6, 1996.
The publication is reproduced in full below:
NATION'S TRUE ECONOMIC PICTURE
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HON. CLIFF STEARNS
of florida
in the house of representatives
Wednesday, March 6, 1996
Mr. STEARNS. Mr. Speaker, who said this? ``Washington has abandoned working families. Millions of Americans are running harder and harder just to stay in place. Wages are flat * * *''
On February 20, 1996 the Labor Department released its employment cost index, showing the smallest gain in wages and benefits since the Government began keeping statistics in 1982.
A far more disturbing figure was given about the median family income. Under Ronald Reagan's watch, 1982-89, real income increased an average of 2 percent annually. President Clinton declared in his 1996 State of the Union ``Our economy is the healthiest it has been in three decades.''
How does the current rate of recovery compare to other periods of recovery over the past 35 years? In 1961 through 1969 the increased real gross domestic product was 23.5 percent from the low point of the recession. The 1975-80 figure increased by 20 percent. The 1982-90 recovery saw an increase of 17.9 percent. I wonder how President Clinton could make such a claim about the state of our Nation's economy since the recovery from the recession in March 1991 has only been 13.1 percent so far.
A major factor in the 1992 Presidential election was the economy.
``It's the economy, stupid'' was the hue and cry of the Clinton campaign. Just as President Bush was reminded over and over again during the 1992 campaign about the promise he made: ``Read my lips, no new taxes.'' President Clinton may also come to realize just how salty his words may become. No doubt he will be haunted by ``it's the economy, stupid'' during his campaign for reelection. President Bush took his lickings about his tax promise; President Clinton will be subjected to the same standard of scrutiny and criticism. After all, he did run on improving the economy. He stated that he believed America should come first. That he would make the U.S. economy vibrant and he would be known for his domestic policy, not just his foreign policy. He said America will come first.
Well here we are 4 years later. Guess what? The economy does not seem to be improving, rather it is stagnating. Edward Yardeni, chief economist at Deutsche Morgan Grenfell, has stated: ``The U.S. is already in recession,'' ``even though we haven't had two straight quarters of negative growth in gross domestic product.'' He believes that GDP will shrink at a 1.5 percent annual rate during the first half of 1996. How did he draw this conclusion? Since the Commodity Research Bureau's price index of raw industrial materials fell 6 percent for the 12 months in January, this was the signal that led him to make this conclusion.
Let's be clear about one very important fact. In the third quarter of 1992, the economy grew 5.8 percent--the Commerce Department announced this number after the 1992 election. President Bush tried in vain to get this message across but neither the press nor the media seemed the least bit interested. Why give the American public the facts? For the record, the growth rate for the fourth quarter was an outstanding 8.6 percent. So, President Clinton could claim that under his administration the average annual rate of growth was 2.5 percent since 1993.
Let's examine what happened in 1995, the first year President Clinton's economic policies were fully in effect. Growth that year was a dismal 1.4 percent. How does this compare to other administrations? From 1982 to 1989, the average rate of growth was 3.9 percent. During that same period the annual median family income rose about 2 percent yearly. How does the Clinton administration compare with the Reagan administration? Unfortunately, for all of us the family income has only risen 0.25 percent per annum.
You might say to yourself that all might be true but President Clinton fulfilled his promise and created almost 8 million new jobs. OK, let's take a look at his claim. The Bureau of Labor Statistics backs up the President's numbers. He has lived up to his promise and created 7.5 million new jobs since taking office in January 1993. What is deceptive about these numbers is that the Bureau of Labor Statistics counts people, not the number of hours they work. For instance, two 20 hour per week part-timers are counted as two jobs. If you look at the number of hours worked, then only 758,000 new jobs have been created annually since 1993.
The Wall Street Journal reported on January 24, 1996 that during a Democrat focus group, a pollster announced that thanks to Clinton 8 million new jobs had been created. At that point, one woman yelled out:
``Yeah, I know, I have three of them.'' This response reinforces what the Bureau of Labor Statistics found during its review of the number and types of jobs that were actually created under the Clinton administration.
It has become very apparent, especially in the last few months, that people are feeling insecure and anxious. Many have expressed the fear that if they lose their job they will not be able to find a new job that will provide them with the salary that will allow them to have the same standard of living. What has caused American workers to think this way? There are several factors which account for this negative outlook. Corporate downsizing has had the greatest impact upon middle managers. The statistics bear out the fact that many of these people trying to reenter the market must accept lower pay. Between 1990 and 1992, on average, these workers were forced to take a pay cut of 20 percent. You might find it hard to believe but the median income is less now than it was in 1986.
There is compelling evidence to show that reaching middle class earnings has been on the decline since 1980. According to the University of Michigan's Panel Study on Dynamics, which has tracked the same families since 1968, they found that 65 percent of white American men who turned 21 before 1980 were earning middle class wages--twice the poverty level--by the age of 30. By comparison, only 47 percent of those who reached the age of 21 after 1980 were able to reach this same level of earning power. Blacks do not fare half as well, reaching 29 and 19 percent, respectively.
Since there are more people without a college education than people with the benefit of a higher education, these workers tend to be far more insecure and anxious.
Education can be an influential factor as to how successful an individual will be in securing a well-paid job. Education is becoming a much more important factor in finding good job opportunities than ever before. As a result, the gap in income distribution is increasing, and this is adding to blue collar anxiety.
We must find ways to encourage our workers to get the necessary jobs skills to compete in this high tech global economy. We must also find a way to provide this training to retrain our workers.
We must expand our technological base and find creative and innovative methods to create new industries. In the past, we have been able to transfer a worker's knowledge and ability into learning new skills to allow them to participate in a new job market. A good example of this is when Henry Ford created the automobile and displaced the horse and buggy trade.
What happened is a lesson that we should all try to emulate. These same workers started working in the Ford factories that had displaced them. The telecommunications bill passed by Congress and signed into law by the President will provide the same type of opportunities by creating millions of new jobs.
So far, President Clinton hasn't delivered. If we balance the budget, we will be well on our way to jump starting.
Why is a 7-year balanced budget so important? Many leading economists believe that a balanced budget would result in a drop in interest rates of up to 2 percent. For a 30-year, $75,000 mortgage, that's $37,000 saved over the life of the loan. Americans will have more take home pay because our budget includes a $500 per child tax credit. We also have true welfare reform, which is a No. 1 priority for most Americans.
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