Executive Council Statement | Better Pay and Benefits

Job Loss and Joblessness During the Bush Administration: A Dismal Record Unparalleled in the Past Half-Century

Chicago, Ill.

No measure of the American economy matters more to working families than the jobs it creates and sustains. An economy that hums along with good and plentiful jobs soundly extends hope and opportunity to all while one that limps and staggers denies families the resources they need today, robs them of optimism about the future and rocks their confidence in their elected leaders.

President Bush and his economic advisors know that America’s working families are very troubled about jobs and joblessness. That’s why—on the same day the Labor Department announced the nation lost an additional 44,000 jobs last month and another 71,000 manufacturing positions—the president told reporters he is concerned about unemployment but declared “there’s a positive feeling in America about our economy.” That’s why he deployed his secretaries of Labor, Commerce and Treasury to Minnesota and Wisconsin—heartland states that have lost tens of thousands of jobs over the past 30 months but which Mr. Bush hopes to capture in next year’s presidential sweepstakes—to talk up his tax policies as the salve for the nation’s economic wounds. And that’s why Labor Secretary Elaine Chao sought to assure skeptical workers at one stop on the tour, “There are still a great many employers and companies who are looking for workers with the requisite skills.”

The president and his advisors may be masters of spin but they have it completely backwards this time: America’s workers and their families do not have a “positive feeling” about the economy. Instead, they are positive that the economy is broken.  

The unvarnished truth is that President Bush and his team are poor stewards of the economy: They have amassed the worst jobs record in more than half a century, piled up a mountain of government debt for the nation’s children and, equally bad, they have no realistic, fair and effective plan to fix the economy and put America back to work.

The nation has lost jobs in 25 of the 31 months that President Bush has been in office, making for the worst jobs record at this point in a presidency of any administration since Herbert Hoover.  Including last month’s loss of 44,000 positions (when economists had predicted a 10,000-job increase), our economy has shed more than 2.5 million jobs and 3.2 million private-sector jobs since the president took office.

Almost 20 percent of workers in a mid-June survey had been laid off during the past three years, the overwhelmingly majority of them since the Bush Administration began.

Since January 2001, we have lost almost 2.5 million industrial jobs. Although maintaining our nation’s security at this tense time demands a strong and vibrant industrial base, manufacturing employment has fallen to its lowest level since 1958.  

Though suffering worst of all, manufacturing is not the only hard-hit sector under this administration. The trade, transportation and utilities sector has shed more than 1 million jobs; the professional and business services sector has lost 748,000 positions; and the information sector, which includes information technology and telecommunications positions, has shed 428,000 jobs. Retail trade has lost jobs in 20 of the past 31 months, with 398,000 jobs gone since Mr. Bush took office. Job loss is taking hold in the public sector now too, with the federal and state governments cutting payrolls in each of the past five months. And even teens seeking summer work have not been spared: A smaller share has summer jobs than at any time in 55 years, and teen unemployment is at its highest rate in a decade. 

The official unemployment rate has been at or above 6 percent for months (compared with 3.9 percent just before Mr. Bush took office). Roughly 11 million unemployed workers want jobs but cannot find them, up by 800,000 over this time last year. Nearly 5 million individuals want full-time jobs but can only find part-time work, an increase of more than half-a- million in one year.

On average, jobless workers are unemployed for more than 19 weeks, up 2.5 weeks from one year ago. Since the beginning of the year, more than one in every five unemployed workers has been jobless for six months or longer. The nation has not experienced such a sustained period of long-term unemployment since 1984.

More than 1 million jobless workers have used up both their regular state unemployment benefits and their emergency federal benefits and still cannot find jobs; since the emergency federal unemployment program began, more 3 million ran out of federal benefits before finding work. African American workers, who scored substantial employment gains during the latter part of the 1990s, have been especially hard hit in the downturn: Their unemployment rate is more than double that of their white co-workers and rising faster.

Bad as the news has been, there’s no reason to think the jobs situation is getting better.

Recent lay-off notices read like a “who’s who” in American business and commerce. In the past month alone, corporations announcing job cuts included the Eastman Kodak Co., cutting 4,500 to 6,000 jobs; Boeing, eliminating 4,000 to 5,000 more positions than previously planned; Pillowtex Corp., closing 16 plants, eliminating 6,450 jobs; the May Company, closing 34 stores and terminating 3,700 employees; Ford Motor Co., cutting as many as 2,000 white-collar positions; American Airlines and Delta Air Lines, laying off as many as 4,100 flight attendants; Verizon Communications Inc., slashing up to 5,000 jobs this year; Wrangler jeans manufacturer VF Jeanswear, closing plants in the South and eliminating 1,800 jobs; catalog retailer Spiegel Inc., shutting down two more facilities and terminating 680 employees on top of 900 already fired; Lucent Technologies’ spin-off Avaya Inc., the nation’s largest manufacturer of office telephone equipment, which already has cut its staff in half, slashing another 500 management slots; and auto supply retailer Pep Boys, closing 33 stores, cutting 700 jobs and eliminating 160 management positions.

In July, the Business Roundtable released a forward-looking survey of its members’ business forecasts for the second half of the year. The news was upbeat on company profits, with almost 70 percent of corporate chiefs predicting company sales will increase. But few predicted new jobs for America’s workers: Roughly 40 percent of the CEOs say there will be no change in their U.S. employment levels—and a near-equal share expects further job cuts.

That sales and profits would rise with no pay-off for workers is hardly surprising. In late July, The New York Times “outed” IBM’s secret plans to speed up its outsourcing of software design and other white-collar jobs to India. ABC News reported that more than half-a-million white-collar jobs have moved from the United States to India, the Philippines, Malaysia and China. The research firm Gartner Inc. said by the end of 2004, one of every 10 jobs with U.S.-based information technology vendors and service providers will be exported. American corporations are flocking to take advantage of lower cost programmers, software designers and call center operators, just as they have moved manufacturing operations and jobs from one low-wage nation to another, always pursuing lower wages, whatever the costs to America’s workers and the American economy.

The Chile and Singapore trade deals Congress has just approved—and the president will soon sign—set the stage for more manufacturing job losses and are harbingers of tougher and more damaging trade fights ahead.  The ballooning U.S. trade deficit continues to drain good manufacturing jobs from our economy. The trade deficit in goods is on track to reach a record $550 billion this year, or more than 5 percent of GDP, posing an unprecedented risk not only to jobs but also to long-term economic prosperity.  A leading contributor to this mushrooming deficit is China, with whom our trade deficit reached more than $100 billion last year. And China continues to keep its currency artificially low, defy international trade rules, and deny its workers their fundamental human rights in order to gain an unfair advantage and maintain their bulging trade surplus with the U.S.  The Bush Administration has completely ignored the toll that our trade deficit and China's unfair trade practices is taking on American jobs, putting more effort into taping over "Made in China" labels at a Bush press event in January than finding any real policy solutions to our trade deficit during the last two-and-a-half years.

No wonder America’s working families have no basis for a “positive feeling” that the jobs picture will improve. Three of every four workers say they are concerned about the unemployment situation and about job security for those who are working; roughly as many say it is a bad time to find a quality job. And the overwhelming majority says that when it comes to jobs, the president is doing a poor or only fair job.

To top it off, the Bush Labor Department is proposing changes in the rules governing overtime pay eligibility that could jeopardize protections for at least 8 million workers, reduce job quality for individuals suddenly forced to put in longer hours without more pay, subtract from family time, further discourage job creation and cut incomes for millions. That the administration would pursue such radical and far-reaching changes now—when job loss has been massive and unrelenting, unemployment is high and long-lasting and real wages have barely budged—is bad for workers, bad for their families and bad for the economy overall. This breathtaking act underscores how deeply out of touch the president is with—or insensitive to—the needs and priorities of ordinary working families and how little he appreciates the profound concerns these families have about the jobs crisis.

Compounding the jobs crisis is the considerable threat to families’ economic security occasioned by spiraling health care costs, declining health care coverage and the ongoing disintegration of workers’ retirement security. Health care costs rose six times faster than the costs of all other items last year, and premium hikes were five times greater than wage increases. Health care is on the table in every major contract negotiation, as employers doggedly try to push price hikes onto workers. The share of employers cutting health benefits more than doubled between 2000 and 2002, a period during which close to 75 million Americans—80 percent of them in working families—were uninsured at some point. Retiree health coverage continues to decline as fewer employers offer it, and those that have provided it feel less and less compelled to keep their promises. Meanwhile, the state budget crisis has resulted in health care cuts for the nation’s poorest and most vulnerable families, children and seniors.  

At the same time, Americans’ retirement future looks more uncertain today than it has in a long time. Major companies, such as DaimlerChrysler, Ford, Prudential, Goodyear and Charles Schwab, have eliminated or suspended their matching contributions to workers’ 401(k) accounts, promising lower retirement savings for working families, with the most significant impact hitting today’s younger workers. Older workers who depend on defined-contribution plans face the troubling prospect of retiring during a prolonged stock market slump. Meanwhile, some employers are threatening to freeze or even terminate their traditional pension plans. Many of these employers took long holidays from contributing anything to their pensions while the stock market was booming. Workers and retirees from industrial companies driven out of business by the weak economy and unfair trade face the complete loss of retiree health benefits and, in some cases, partial loss of their pensions.

Despite this unraveling of employment-based benefits, President Bush has no plan—and no intention—to shore up the system. Instead, he pursues policies that will undermine it. Nowhere is this clearer than in the battle under way over prescription drugs. The nonpartisan Congressional Budget Office has concluded that the drug bill promoted by the administration will lead employers to terminate retiree health coverage for as many as 4 million retirees.  Further endangering health and retirement security overall, the president remains committed to partial privatization of Medicare and Social Security, the nation’s bedrock family security programs.

The jobs crisis and decline in overall job quality the nation has witnessed over the two-and-a-half years George W. Bush has been president underscore how critical it is for the union movement to respond as never before to the challenge of moving the country back on track economically and politically. Our members—indeed, all working families—expect it of us, and we owe it to them.

To that end, in the months ahead, the AFL-CIO will launch an active campaign to highlight the Bush jobs crisis in every dimension—ongoing job loss, high unemployment, the threats to job quality, stagnant wages and declining benefits. We will take our message to multiple forums and venues, starting in the early fall with a national forum on joblessness to be followed later by town hall meetings around the nation. These events will provide a vehicle and a voice for working families left out and left behind by the Bush Administration, and for experts to help frame the discussion about the policies and priorities we need to rebuild the economy and put America back to work. Every month, we will clock and publicize the administration’s record on job loss and other measures that reflect working families’ economic security.

Union leaders will speak out regularly on what is happening in the American economy and what has happened to America’s workers. We will reach every union member in the nation, carrying our message about key jobs fights and the role of the Bush Administration in reducing job security and job protections to worksites, shop floors, plant gates, union halls and the communities in which our members live. We will implement and maintain aggressive activist campaigns on every jobs issue, taking advantage of every medium for activism within the union movement’s arsenal and arming our members to lobby federal and state decision-makers on the key jobs fights ahead.

We will shine a high-beam, union-made spotlight on the economies of the nation and the states. We will ask every elected official and politician who seeks our support, “Which side are you on? Are you on the side of creating and preserving good jobs in America? Will you side with unemployed workers and their families? Whose side are you on when it comes to overtime pay protections and other basic workplace rights? Are you on the side of shoring up employment-based benefits, while simultaneously working to strengthen public programs?”

No measure of the American economy matters more to working families than the jobs it creates and sustains.  We will carry this value through all our political work next year because for us, no measure of an American politician matters more than his or her commitment to creating and sustaining good jobs for working families.

Sadly for working families, President Bush has failed that test—and we have all paid the price. Working families will not forget that next November.