Cross-Posted on My Left Wing
There are numerous sexy issues that Democrats could use in 2006. Republican corruption, Schiavo, Delay, and the Supreme Court come to mind. There are great political issues. Standing in the shadow of these issues is the boring and mundane idea of job creation. This is not sexy. It’s hard to get excited about it. However: Make no mistake. If the Democrats do not make meaningful job creation a top priority in 2006, we will not be able to build a meaningful long-term governing coalition.
Let me explain the importance of job creation with a story.
One of the best movies about music is Hail! Hail! Rock and Roll. Keith Richards puts together a back-up band for Chick Berry’s 60th birthday. The director used the movie as a way to tell part of the story of early rock `n roll. He interviewed Jerry Lee Lewis to add some oral history. An interviewer asked Lewis about payola, where the record companies would pay DJs to play certain records. The interviewer asked a question along the lines of “These were great records. Why did you have to pay to get them played on the radio.”
Lewis: “Everybody wants to be…appreciated.”
While everybody likes the emotional boost from public or private compliment, people respond just as positively to meaningful pay increases. This is what Lewis was talking about in the above-mentioned quote. Like it or not, one of the most prominent and best-understood methods of job-place appreciation is to give people meaningful raises. I guarantee you if my boss gives me a 10% raise, he’s earned some loyalty from me. It’s that simple.
And therein lies the problem. On the whole, people are not making meaningful gains in wages. According to the Bureau of Labor Statistics, the average earnings increase from 2000-2004 was 3.86%, 3.22%, 3.12%, 1.71% and 2.39% respectively. However wages have to be compared to inflation to determine the real rate of wage growth. For the same years, annual inflation was 3.4%, 2.8%, 1.6%, 2.3% and 2.7% respectively. When inflation is subtracted from wages, overall wage growth becomes .46%, .42%, 1.52%, -.59% and-.31% respectively for 2000-2004.
At the same time, people have seen increases faster than inflation in health insurance premiums, gasoline, spending on prescription drugs and tuition payments for college. These are necessary expenses that are taking a larger and larger percentage of a stagnant pie of weekly earnings.
This problem is exacerbated by the lack of creation of numerous high-paying jobs. According to the Bureau of Economic Analysis, the three industries that have had net gains in number of jobs created since 2000 are government employees (+791,000), Health Care and Social Assistance (+1,279,000) and Food Service/Drinking Places (+465,000). According to the Bureau of Labor Statistics, these are not the highest-paying jobs the US could create. Food Service and drinking places have an average hourly wage of $7.46/hour. Health Care has several job categories. To no ones surprise, doctors and dentists make really good money. However, their assistants don’t, coming at $16.20/hour. The BLS does not provide statistics for government workers. It’s also important to remember these are raw wages, which don’t include deductions for things like health insurance which alone usually comprises 10% of income.
In short, we’re not making high-paying jobs that provide some economic security. It’s not enough to simply create jobs. It’s important to ask what kind of jobs are created to determine if we can do better. And the answer to that is clearly no. We can do better.
http://www.bls.gov/ncs/ocs/sp/ncbl0635.pdf
http://www.bea.doc.gov/
