Sep 19 2013
“I have directed my staff on the Budget Committee to conduct a detailed analysis of the economic conditions facing working Americans: their wages, their employment, their household finances. I will give a series of talks over the coming weeks looking at their financial condition and the state of our nation economically…
It’s not just the unemployment rate, which remains too high at 7.3 percent… It’s the number of people we all know who are working well below their potential because nothing is available that uses their job skills… The jobs our economy is producing are part-time jobs rather than full-time… You have to go back to 1995 to find median household income that is lower than it is today…
It is time that we recognized both the disastrous conditions facing working Americans and the moral obligation we have to replace government dependency with the freedom and dignity that comes from work and independence.”
WASHINGTON—U.S. Sen. Jeff Sessions (R-AL), Ranking Member of the Senate Budget Committee, delivered the following speech today as the first in a series of remarks on the state of the U.S. economy:
“I have directed my staff on the Budget Committee to conduct a detailed analysis of the economic conditions facing working Americans: their wages, their employment, their household finances. I will give a series of talks over the coming weeks looking at their financial condition and the state of our nation economically. I will also attempt to look at the causes leading to our current financial difficulties and suggest some steps to restore America’s financial future.
The sad fact is that the state of middle- and lower-income Americans is worsening on nearly every front. The slow growth of the economy (the slowest economic recovery from a recession since World War II) is restraining the normal upward movement in income that previous generations have experienced. And, if you don’t have a job, you’re twice as likely to only find part-time as full-time work—if you can find any work at all.
According to the U.S. Census Bureau, middle class incomes have declined for 18 years. Different parties, different presidents, different majorities in Congress. That means that savings for college and retirement are growing at all-time lows.
Young people are not marrying as early as they want, due to bad economic prospects. That means that families are launching later in life, which gives couples fewer years to pay down a mortgage or raise children.
Perhaps the single greatest source for economic anxiety for working Americans is the fear of losing their jobs.
It’s not just the unemployment rate, which remains too high at 7.3 percent in August 2013. It’s the number of people we all know who are working well below their potential because nothing is available that uses their job skills. It’s the number of people we know who have given up looking for work, or who are working part-time because nothing full-time is available for them.
Fewer people are working today than in 2007. That’s actual numbers—even though population has increased. Just before the recession hit in December of 2007, about 62.7 percent of the working-age population was working. If that same percentage was working today, we would have 154.1 million jobs. But we don’t. We have 144.2 million jobs and only 58.6 percent of the population is working.
In short, we’re missing 9.9 million jobs when we compare this economy to the one in 2007.
Here’s another way to look at the job problem: in 2007 we had 363,000 “discouraged workers”—people who had given up looking for work but had not yet disappeared from view by the Employment Security offices. Today we have 866,000. That an increase of 140 percent in six years.
Here’s still another barometer of middle class anxiety: we have 1,988,000 fewer full-time jobs today than in December of 2007. However, we have 3,627,000 more part-time jobs. People with part-time jobs are not counted as unemployed. What does this mean? The jobs our economy is producing are part-time jobs rather than full-time. That’s been going on for a long time, and it’s not acceptable. These jobs often have no health care program or retirement plan.
The workforce participation rate—the percentage of people who are actually working—is the lowest it’s been since 1975.
Take a look at the median family’s income. The Census Bureau published new estimates of household income on Tuesday, August 17. They reported that the median income of American households, adjusted for inflation, stands at $51,017—lower than last year, lower than the year before, and, in fact, lower than any time since 1995.
I would suggest that we’ve done a lot active things supposedly to make this economy better, but it’s not benefitting mainline, hardworking American people. They are struggling.
Let me say it again: you have to go back to 1995 to find median household income that is lower than it is today.
Even if you take a broad measure of income, you get similar results. If we divide all of the income in the United States by the population to come up with a per capita income concept, per person income is lower today than at any time since 1997. This is an unacceptable trend. It is not a short-term phenomenon—it’s now a negative trend over 18 years.
It cannot continue. While the stock market has rebounded and profits are strong, that should not, cannot, be used to obscure these trends—trends that have accelerated even after the recession is supposed to be past us.
Many are concerned that the Federal Reserve is furthering the national wealth gap. Their “quantitative easing” has boosted wealth in the investor class but has not benefitted the working class. This is not the way our policies should work.
Another thing I would note is that our civil society today has certain weaknesses that we need to discuss. I will talk more about it in a separate speech, but let me share a few thoughts about why this weakness should concern us all.
Few social institutions are more important in helping us through difficult economic times than marriage. Marriage is disappearing in the bottom 50 percent of the income distribution. And, as it does, so does the presence of the father in the home. If you are in the bottom 50 percent and give birth, there is a greater than 50 percent chance that the father will not be living with you when the child comes home from the hospital. Perhaps, as many suggest, our welfare policies are exacerbating these trends.
Also worrying is the decline of charitable giving since 2007. Like the overall economy, this vital part of our social and economic system has failed to recover. Total charitable giving fell in 2008 to $303.8 billion from $326.6 billion in 2007. As of the end of 2012, total giving was only $316.2 billion… still 3 percent below its level of 6 years ago.
The road we are on today leads to the continued erosion of civil society, the continued expansion of the welfare state, and the permanent entrenchment of a political class that profits from the growth of government. It is time that we recognized both the disastrous conditions facing working Americans and the moral obligation we have to replace government dependency with the freedom and dignity that comes from work and independence.
There are things that can be done to improve these conditions. It’s time for us to defend working Americans and their undeniably legitimate concerns. I will talk about that in time to come. But, we’ve got to ask ourselves if we should bring into our country, through our immigration policy, more people than we have jobs for? Won’t that pull down wages and make it harder for people to get work? Shouldn’t we defend our workers more effectively against unfair trade from around the world? There should be bipartisan support for both of those policies.
We must also convert more of our welfare spending—the 80 means-tested support programs for lower-income Americans, on which the federal government spends $750 billion per year, larger than Social Security or the defense budget—to job training and employment preparation programs. Shouldn’t we focus more on getting our unemployed citizens trained and ready to move into the workforce?
Those are some of the fundamental questions I think we as Americans need to be asking.”