Mr. President, 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 conditions, and their household finances. I will give a series of talks over the coming weeks looking at that financial situation and the state of our Nation as a whole 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.
This topic is very important. The sad fact is that the state of middle and lower-income Americans is worsening on virtually every front. The slow growth of the economy (and this has been the slowest recovery from a recession since World War II or the Great Depression) is restraining the normal upward movement of income that previous generations have experienced. It has accelerated in the last several years, but it has been going on--we have to be honest with ourselves--for a much longer period of time. If you don't have a job now, you are twice as likely to only find a part-time job as full-time work, if you can find one at all.
According to the U.S. Census Bureau, middle-class incomes have declined for 18 years. That has happened with different parties, different Presidents, and different majorities in the House and Senate. That decline means that savings for college and retirement are growing at alltime lows. Young people are not marrying as early as they want, sometimes due to bad economic prospects. That means families are launching later in life, which gives couples less years to pay down a mortgage or raise children.
Perhaps the greatest single source of our economic anxiety, however, is the fear of losing a job or that our children won't be able to get a job or our grandchildren won't be able to get a good job.
It is not just the unemployment rates that remain too high--at 7.3 percent as of August 2013--it is the number of people we all know who are working well below their potential because nothing is available that uses their job skills. It is 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 to them.
Fewer people are working today than in 2007. Almost 4 million fewer people are working today than in 2007, but during that time our population has increased and the number of workers of working age has increased. Just before the recession hit in December 2007, about 62.7 percent of the working-age population was working--62.7. If that same percentage was working today, we would have 154 million jobs. But we don't have 154 million, we have 144 million. And only 58.6 percent of the population is working, which is a marked decline. In short, we are missing 9.9 million jobs when we compare this economy to the one in 2007.
Here is another way to look at the job problem. In 2007 we had 363,000 discouraged workers--people who had given up looking for work because they couldn't find a job but still had not disappeared from the rolls of employment security offices. Today we have 866,000. That is an increase of 140 percent in discouraged workers.
Here is another barometer of the middle-class difficulties. We have 1,988,000 fewer full-time jobs today than in December 2007; however, we have 3,627,000 more part-time jobs. How we calculate this is important. People with part-time jobs, according to the jobs people at the Department of Labor, are not counted as unemployed, they are counted as employed, although they may want a full-time job, and most do. So our economy is producing part-time jobs rather than full-time jobs. That has been going on for a long time, and it is not acceptable. These jobs often have no health care program or retirement plan.
A very high percentage of all jobs created this year are not full-time jobs, and workforce participation--the percentage of people who are actually working today--is the lowest since 1975. That is not acceptable. And these trends have been going on for some time.
Let's take a look at median family income. The Census Bureau published new estimates of household income onTuesday, August 17. They report that the median income of American households is lower than last year, lower than the year before, and, in fact, is lower than at any time since 1995, adjusted for inflation.
This is a very serious trend. While we have done a lot of things to make this economy better, few benefits are going to main-line, hard-working American people. They are struggling out there. You have to go back to 1995 to find median household income that is lower than today's household income.
Even if we take broad measures of income, we get similar results. If we divide all of the income 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 clear it is not a short-term phenomenon. It is now a negative trend for almost 18 years, and it cannot continue.
While the stock market has rebounded and corporate profits have remained strong, that should not and cannot be used to obscure these trends, trends that have accelerated after we emerged from the recession of 2008 and 2009.
Many are concerned that the Federal Reserve is furthering the Nation's economic problems with a growing wealth gap. Their quantitative easing has boosted the wealth of the investor class but has not benefited the working class. This is not the way our policies should work. People who know what to do with low-interest money seem to be coming out ahead. But the people who don't have money, don't have jobs, who are working part time instead of full time, are slipping.
Our civil society, the great foundation of the our economy, today has certain weaknesses that we have to talk about. I will address more in a separate speech, but let me give a few thoughts.
Few social institutions are more important in helping us through difficult economic times than marriage. However, marriage is disappearing in the bottom 50 percent of the income distribution. Many people stay too long in low-income unemployment situations, and it is not healthy. And too often, the fathers are not in those households. If you are in the bottom 50 percent of the income distribution 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. We need to look at that.
Also worrying is the decline of charitable giving since 2007. Like the overall economy, this vital part of our social and economic system has not recovered effectively. Total charitable giving fell in 2008 to $303 billion from $326 billion. As of the end of 2012, total giving was only $316 billion--still 3 percent below what it was 6 years ago.
I would conclude and note that the road we are on is leading to the continued erosion of the middle-class civil society, the quality of life for hard-working Americans is not improving financially, and 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 we recognize both the disastrous conditions facing working Americans and the moral obligation we have to replace dependency on government with the freedom and dignity that comes from work and independence. That has got to be our goal.
There are things that can be done to improve these conditions. It is time for us to defend working Americans and their undeniably legitimate concerns about current trends. I will talk about that as we go forward. It is something we need to seriously consider.
Relevant here is this question, can we bring into our country more people than we have jobs for? Won't that pull down wages and make it harder for people to get work? And this question, shouldn't we defend more effectively our workers against unfair trade and competition from around the world? Both of those policies are ones I hope we could have bipartisan support on, although I am worried. The Senate's immigration bill would increase permanent immigration by 50 percent, would increase guest workers--people who come and take jobs--by double, all in addition to the 11 million who would be given legal status here.
I do think our colleagues are correct to say we should do more about trade and have fair competition on the world stage for our workers. I think we have got to convert more of this welfare spending, the 80-some-odd programs that are fundamentally geared to lower income Americans, that spend $750 billion a year--which is larger than Social Security, larger than defense, and larger than Medicare--we need to convert some of that to better use.
For example, for every $100 spent on these programs, only $1 goes to job training. Shouldn't we focus more on getting our unemployed, our people who need more training, trained, ready to move into the workforce, to take jobs? Can we afford to bring in millions of people to take jobs and to leave our people on welfare and the unemployment rolls?
Those are some of the fundamental questions we as Americans need to be asking. But first and foremost, colleagues, we are not able to deny the unassailable fact that we have had a slide in the financial well-being of millions of Americans, and that this has been going on for well over a decade.