Despite efforts by the Bush Administration to portray the economy as doing well, Americans remain skeptical. One reason why the President is having such a tough time selling his message is that the economy has done so much worse on his watch than it did under President Clinton by a variety of indicators.

Economists properly caution that many forces beyond presidential leadership affect the performance of the economy. But in one area where the president does matter—fiscal responsibility—President Clinton’s record stands in marked contrast to President Bush’s. The strong policy environment under President Clinton created conditions in which the economy could flourish.

The following indicators illustrate key differences in economic policy and economic performance under President Clinton and President Bush:

·        Job Creation

·        Unemployment

·        Wages and Income

·        Other Measures of Economic Well-being

·        Fiscal Responsibility

 

For the full text of this report, please click on the file listed under "Related Resources."

 

The U.S. labor market is a constantly churning sea of job creation and destruction. On average, 18 million new jobs appear each year, while 15 million jobs are lost.1 The vitality of the labor market creates great opportunities for those who can navigate it successfully, but it also creates great risk and uncertainty for working families.

One result of a constantly changing labor market is that many American families experience substantial year-to-year instability in their earnings. While there is an ongoing debate whether that volatility has increased significantly in recent years, there is no question that it exists. About one in five workers experiences a decline in earnings of at least 25 percent from one year to the next, while one in nine workers sees a decline of 50 percent of more.

Some of the volatility in earnings reflects family decisions to change jobs or to take time off from work to devote more time to family responsibilities. It also reflects involuntary loss of earnings as a consequence of illness or injury. Some of the volatility, however, is the outcome of the shifting job market as workers are displaced by slack demand, technological change, or competition from foreign producers.

Elements of the social safety net can help cushion the impact of a temporary decline in earnings because of a job loss, but there are few government programs to help those who suffer a permanent reduction in earnings. Unemployment Insurance (UI) is the main bulwark against temporary job loss, but the UI program has many gaps and is not designed to help with long-term job displacement or reduced earnings once a worker is reemployed. Programs explicitly designed to help displaced workers such as Trade Adjustment Assistance (TAA) are limited in scope and reach very few workers.

The federal income tax provides some assistance to families who experience a decline in earnings through the Earned Income Tax Credit (EITC), but that help is limited to those families whose earnings are low enough to qualify for the credit. Moreover, the EITC itself and other features of the tax system can exacerbate the consequences of earnings fluctuations by imposing higher taxes on families whose income fluctuates from year-to-year than on families with the same average earnings but whose earnings remain steady.

This paper explores the extent of earnings and employment instability faced by American families and possible ways to improve the social safety net and the federal tax code to help cushion the blow of job displacement and the complete or partial loss of earnings that too-often occur in today’s economy.

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Historically, labor market outcomes for African-Americans have been worse than those for the population as a whole. The problem is even more acute for black men, particularly for young black men with low educational attainment.

Key Concerns

·    The Unemployment Rate for Black Men is Double That of All Men.

·    Labor Force Participation Is Lower Among Black Men.

·    Nearly 40 Percent of Black Men Were Not Working in 2006.

·    The Problem of Black Male Unemployment Is Particularly Acute Among Young Men.

·    Little Education Means Joblessness for Many Young Black Men.

·    High Rates of Incarceration Pose Steep Employment Barriers for Black Men.

·    Rigid Child Support Collection Creates a Disincentive to Find Work for Half of African American Men Aged 25 to 36.

For the full text of this report, please click on the file listed under "Related Resources."

 

 

Parents today know that their children will need a college education to succeed in our global economy, but they are having a harder time saving for college as tuition skyrockets. Despite the importance of a college education to an individual’s future success and the competitiveness of the entire economy, steep tuition increases have made college an intimidating financial hurdle for middle class families. America’s parents need support to be able to provide their children with the opportunities and access to education that they had. Only with this support will today’s young people achieve prosperity in a changing global economy.

Key Facts

·        College is Key for Opportunity in 21st Century Economy.

·        The Cost of College Keeps Going Up.

·        Students and their Families Are Racking Up Student Loan Debt.

·        Even Families that Do Save For College, Can’t Save Enough.

·        On Top of Tuition, Textbooks Create a Burden On College Students and Their Families.

 

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With the rising costs of health care and erosion of retirement savings from traditional pensions, many American seniors find themselves in a financial bind when they need unexpected medical care and must turn to their family members for emergency assistance. Often, their children have children of their own, and are juggling the rising costs of education and health care within their own household. The financial squeeze felt by these families in the “sandwich generation” who are taking care of both their parents and their children is likely to become more prevalent in the future as the population changes.

Key Facts

·        A Growing Number of Americans Are Entering the “Sandwich Generation” and  being squeezed between the simultaneous demands of caring for their children and their aging parents.

·        Women Are More Likely Than Men To Provide Support To Aging Parents.

·        Baby Boomers Retiring With Debt Will Put More Pressure on the “ Sandwich Generation.”

 

 

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The rising costs of childcare, healthcare, and education, coupled with stagnating wages, have made raising a child a financial high wire act for many American families. Unfortunately, much of the Bush tax cuts were designed to provide benefits to the people who don’t need them, while middle-class families struggle to manage the expenses of raising a family — expenses which only increase with each new child. Targeted tax relief to middle-class families will help them to mange the crunch of balancing work and family, achieve their aspirations, and contribute to America’s economic growth.

Key Facts

·        Families Are Sacrificing More to Have Children.

·        More Young Adults are Waiting Longer to Have Children.

·        It Often Takes Two Incomes to Raise a Family.

·        Child Care Can Pose a Huge Financial Burden on Families.

·        Millions of Americans Are Struggling to Manage the Financial Crunch in Balancing Work and Family.

For the full text of this report, please click on the file listed under "Related Resources."

 

 

 

In his State of the Union Address, President Bush announced a new health care proposal that he claims will“help more Americans afford their own insurance.” In fact, however, the President’s proposal is more likely to weaken the nation’s health care system than it is to make things better. It will not help the vast majority of the 47 million uninsured and will not address the inefficiencies in health care that contribute to skyrocketing costs. What it will do is undermine our country’s most reliable source of health care coverage - the employer-sponsored system - and put more and more people into the individual market where the risks are much greater.

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The federal government’s ill-conceived royalty relief program for offshore oil and gas drilling could cost taxpayers up to $80 billion—with precious little to show for it. There is scant evidence that royalty relief materially affects the domestic supply of oil and natural gas or our dependence on foreign energy sources. Moreover, money spent on tax incentives for oil and gas companies to encourage deepwater drilling is very likely to have a greater impact on energy security if used to encourage conservation or the development of renewable energy alternatives. As an economic policy, royalty relief appears to have no net effect on jobs at the national level or any effect on energy prices paid by consumers.

For the full text of this report, please click on the file listed under "Related Resources."