Yesterday we celebrated Labor Day. Unfortunately, there has not been much to celebrate in the labor market over the last 4 years. A look at the recent record shows an extremely under-performing labor market economy.

Employment

Since the start of 2001, the economy has lost nearly a million jobs. Part of the job-loss was due to the recession, however, even after 2001 the labor market has just barely crept along. Measuring from the end of the recession, the economy has added an average of only 18,000 jobs a month.

This stands in stark contrast with previous administrations and recent historical experience. Over the last 30 years, employment growth has averaged a healthy 150,000 jobs. Looking at the past six 4-year terms, on average, a 4-year term will contain 30 months with growth above this level. Under the Bush administration, there have only been 4 months with satisfactory levels of growth. (See figure below). The Bush Administration will be the only administration since Herbert Hoover in the 1930's to have a net job loss during its term in power.

Data: Bureau of Labor Statistics

Earnings

In addition to a weak labor market as measured by the number of jobs, it also appears that even those with jobs are not doing well. Average inflation adjusted weekly and hourly earnings have slowed to a crawl, and even declined over the past year. (See figure below).

Data: Bureau of Labor Statistics

Policy

The record of the last 4 years appears clear. The economy and the labor market have underperformed under the policies of this administration. While the labor market weakness has been emphasized, in fact, the average growth rate of the overall economy has been weak as well. Real gross domestic product has grown on average just around 2.5 percent under Bush -- which is lower than past administrations, including the 3.3 percent average rate experienced during the Carter administration.

Administration economic policies, which were sold as economic and jobs stimulus, have obviously not had their claimed impact.

In the meantime corporate profits have soared, from $767 billion in 2001, to $1,167 billion in the most recent reporting period (2004, 2nd Quarter) -- an increase of more than 50 percent. It seems clear who is currently benefiting from the current economy as well as current policy.