From the Economic Policy Institute:
JobWatch Bulletin, February 6, 2004
www.jobwatch.org
Continued high unemployment and the lack of meaningful job growth made 2003 the worst year for weekly wage growth for the typical worker since 1996 (see EPI Issue Brief Weak Recovery Claims New Victim: Workers’ Wages ). This clearly indicates that the weak labor market is now hurting employed workers as well as those looking for work.
In 2003, real (inflation-adjusted) weekly wages fell for low- and middle-wage men and were stagnant or fell slightly for low- and middle-wage women. This trend is in sharp contrast to the significant and sustained real wage growth over the 1995-2002 period when unemployment was falling. Despite the acceleration of gross domestic product (GDP) growth in late 2003, the wage growth of production, non-supervisory workers (over 80% of the workforce) actually slowed in this period.
The Bush Administration called the tax cut package, which was passed in May 2003 and took effect in July 2003, its “Jobs and Growth Plan.” The president’s economics staff, the Council of Economic Advisers, projected that the plan would result in the creation of 5.5 million jobs by the end of 2004-306,000 new jobs each month, starting in July 2003.
Although jobs increased by 112,000 in the month of January 2004, the “Jobs and Growth Plan” still fell 194,000 jobs short of the administration’s projection. (Actually, job gains in the month of January were less than 30,000 once seasonal adjustment problems for retail hiring and strike effects are removed.)
The administration projected that a total of 2,142,000 jobs would be created in the first seven months after the tax cuts took effect. In fact, only 296,000 jobs were created over that period for a cumulative shortfall of 1,846,000 jobs.
Since the recession began 34 months ago in March 2001, 2.4 million jobs have disappeared, a 1.8% contraction. The Bureau of Labor Statistics began collecting monthly jobs data in 1939 (at the end of the Great Depression). In every previous episode of recession and job decline since 1939, the number of jobs had fully recovered to above the pre-recession peak within 31 months of the start of the recession.
Today’s labor market would have an additional 3.88 million jobs if jobs had grown by the 0.7% rate that occurred in the early 1990s recession and so-called “jobless recovery,” the worst record prior to this current period. The picture is bleaker for private-sector jobs, which have dropped by 2.9 million since March 2001, a 2.5% contraction.
Since the official end of the recession in November 2001, total jobs have shrunk by 0.7 million (an 0.5% contraction) and private-sector jobs have dropped by 0.9 million (or 0.8%).