It’s the season for reruns. Another sluggish economic summer sparks another round of presidential speechmaking (inspirational or divisive, depending on where you sit and everyone has taken a seat). Noisy protesters again demand higher pay.
There’s a dreary sameness to the rhetoric. The clapper strikes the brass, but no one responds to the ringing bell. We’ve heard it all before. Our summers of discontent have become commonplace.
And yet, the continuing trends signal serious problems ahead. And they require better responses than we’ve yet seen.
Let’s review. Last week the Commerce Department reported that gross domestic product grew just 1.7 percent in the second quarter. That may look good when compared with 1.1 percent growth in the previous quarter, but hold the champagne. Anemic growth and a few indicators above zero do not a celebration make. Particularly when you couple the GDP report with the jobs report released Friday.
Nationally, employers added just 162,000 jobs in July, well below expectations. Two-thirds of the new jobs are part-time. Keith Hall, former head of the federal Bureau of Labor Statistics who’s now with George Mason University, delivers more bad news. He tells McClatchy newspapers Washington Bureau that 97 percent of net job creation over the last six months has been part-time work.
Democratic strategist Stan Greenberg finds people believe that “American jobs have been fundamentally restructured to pay less.” They see more jobs, but not more good jobs.
He calls the president’s economic message “schizophrenic.” On the one hand, Obama talks about the struggles of the middle class. On the other, he claims the economy is improving. People buy the first bit, but not the second.
Greenberg would play the Occupy card. “The president must present a choice between progressives who want to address issues like rising inequality and conservatives who don’t,” he says.
That’s changing the subject, and it’s worked in previous Obama campaigns. But it’s not a strategy for addressing the problems confronting the nation now.
The class warriors confuse cause and effect. Bill Gates’ fortune doesn’t make us poor. His business success, rather, continues to create wealth and opportunity. At its best, that’s how the system works. Sure, there are some vastly overpaid CEOs, but skewing at the top has little to do with economic stagnation.
Brookings Institution fellow Scott Winship finds scant evidence demonstrating that income inequality has any negative effect on economic growth and mobility. Attacks on the financially successful won’t create opportunity for the poor and the middle class. A growing economy will.
Winship points out the critical role played by education. He writes that “just 16 percent of those who start at the bottom but graduate from college remain stuck at the bottom, compared with 45 percent of those who fail to get a college degree.”
These days, too many of those college graduates begin the career search burdened with heavy debt in a job market offering low-wage, part-time jobs. Washington state appears to be doing a little better than the nation, but we remain vulnerable to receding national tides.
Here, regulatory overreach puts thousands of family wage jobs at risk. Controversial proposed water-quality regulations (based in part on estimates of fish consumption) would raise local government utility costs and threaten major industries. Then the Inslee administration decides the environmental review of a coal export terminal should consider the climate change effects of burning coal in China.
Construction, transportation and trade jobs take a back seat. Progressives intent on mandating higher wages and benefits refuse to acknowledge resulting job losses.
While the White House rails against inequality, Obamacare is leading many employers to use part-timers to avoid triggering the mandate. Policy matters. The drag will continue through the year, eventually affecting state revenues.
Our state lawmakers counted on accelerated growth when they finally passed the budget in June. The $1 billion dedicated to meeting the state Supreme Court’s ruling on school funding was a start, but it won’t satisfy the court. Slow growth means another budget stalemate.
Greenberg’s criticism of schizophrenic messages applies here. The governor needs to balance his environmental zeal with some appreciation for the negative economic consequences of regulatory uncertainty and rising business costs. What happened to building a working Washington?Bainbridge Island resident Richard S. Davis is president of the Washington Research Council. Email him at firstname.lastname@example.org.