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August 25, 2004 Kerry's Economic Spin One of the key talking points for the Democrats this year is represented by this statement on the Economy page of the Kerry/Edwards site.... In America, a rising tide is supposed to lift all boats. But today, Americans are working harder, earning less, and paying more for health care, college, and taxes.I'm willing to assume that health care and college costs are rising. Indeed-- as they are largely legislated beyond the normal pressures of the free market--they are always rising, so this is hardly a keen insight by the Kerry/Edwards team. However, I'm less willing to give ground so quickly in the other areas. To take them in order:
Briefing.com presents this handy little graph of the Average Workweek....  So, we're working harder than...when, exactly?
This statement is generally substantiated by pointing to weekly and hourly earnings, which have been only roughly approximating--even lagging--inflation. The Kerry campaign issued a press release on those lines, claiming... Real wages fell 1.0 percent in the last year and are now lower than they were when the economic recovery began.Well, fair enough...real wages have fallen. We won't even get into the argument regarding whether that is a temporary structural anomaly. No, instead, let's remember something: "wages" do not represent our total compensation. In fact, the Bureau of Labor Statistics has a category to represent total compensation. They--in a rare instance of comprehensible economic language--call it "Total Compensation". Here's the BLS data for 12 month % change in private industry total compensation, going back 10 years.  Note, please, current compensation is growing faster than in much of the 90s. Apparently, current compensation is shifting from wages to other benefits. Whether that is a net positive or not, the fact is that businesses did not suddenly begin stiffing employees on compensation in--oh let's just say--January, 2001. In fact, after a drop beginning in 2000, continuing through the recession, and worsened by 9/11, it has been rising steadily.
Are we paying higher taxes? Not Federal taxes, per the Congressional Budget Office. can't speak for your state, but Virginia just shot down a tax cut, citing a"budget deficit"...shortly before announcing a $300+ billion revenue surplus. The Congressional Budget office recently released a report called "Effective Federal Tax Rates Under Current Law, 2001 to 2014" (pdf) What did the CBO find? TOTAL EFFECTIVE FEDERAL TAX RATEYou see any higher effective federal tax rates in there? No? Neither do I. And the effective individual tax rates tell the exact same story. But, remember, John Kerry promises to turn this all around. After 4 years of Democrats complaining--correctly, in many instances--about how the Bush administration is painting a deceptive picture of the economy, it's worth pointing out that the new boss will be the same as the old boss. The Democrats are not upset about the President putting political spin on economic information...they're just upset that it's not their turn. |