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Via Workers World News Service
Reprinted from the Aug. 29, 1996
issue of Workers World newspaper
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Whose recovery?

Widest income gap, more low-wage jobs under Clinton

By Shelley Ettinger

At their convention in Chicago the week of Aug. 25, the Democrats will present themselves as the party that represents ordinary working people. Appealing to workers to send the president back to the White House for four more years, they'll say the Clinton administration got the economy back on track.

Unemployment is down, they'll say. Wages are up. Jobs are being created. They may even claim that the era of corporate restructuring and mass layoffs is over.

Bill Clinton has saved the day for U.S. workers. Send him back to keep up the good work.

This will be the central theme in Chicago. Is any of it true?

Bankers satisfied with Clinton

At the moment the capitalist economy is relatively stable--for the capitalists, that is. The Gross Domestic Product grew at a 4.2-percent rate in the second quarter of 1996. Third-quarter profits continued to rise.

For a while, analysts were worrying about inflation and predicting that the steady growth would prompt the Federal Reserve Board to raise short-term interest rates. But as the Fed's Aug. 20 meeting approached, that looked unlikely.

The fact that real wages are not rising is one reason. Another is the bankers' apparent satisfaction with President Clinton; the Fed is now expected to hold off any move toward raising rates until after the election.

And why not? On Aug. 3 the New York Times wrote of Clinton's record, "In almost every instance, he took the route favored by Wall Street, business executives and conventional economists."

This route included pushing through the North American Free Trade Agreement. It included reducing the federal deficit by cutting government spending on human services.

Naturally, Clinton's record does not include any action to staunch the flow of layoffs, plant closings or runaway shops-because these are all key elements contributing to the profit flow.

And on the crucial issue of wages, Clinton did nothing.

Real wages still falling

During the first two years of his administration when the Democrats controlled Congress, the president made no move to raise the minimum wage. Then the Republicans took over. Now Clinton goes to the convention having just signed a bill to slightly increase the minimum wage.

He will take credit for the small but not insignificant minimum-wage raise. He won't talk about how the welfare cuts he's also signing will drive wages down overall.

Even before the welfare cuts take effect, wages continue their two-decade-long free fall. On Aug. 13 the Labor Department released figures showing that real average weekly pay fell sharply--1.5 percent-in July alone.

Government economists have used occasional upward monthly fluctuations to claim that wages are rising. In fact, however, average overall income is exactly the same as it was in 1992--which is about 6 percent lower than the average in 1988, according to Census Bureau statistics. And 1988's average was lower than 1985's, and so on going back almost two decades.

Bureau of Labor Statistics figures show that the real average hourly wage in the United States has fallen by 12 percent since 1978. That trend continued under Clinton.

Rich-poor gap widest in 75 years

In the Clinton administration's first two years, the gap between rich and poor in this country not only widened. The pace at which the gap grew accelerated.

Sociologist Michael Hout of the Russell Sage Foundation reported Aug. 19 that "the United States is now more unequal than at any point in the last 75 years.

"According to our calculations, the richest 1 million American households made an average of $412,000 in 1994, while the poorest million households made just $2,930," Hout said at the annual meeting of the American Sociological Association in New York. That's about 140 to one.

Black, Latino and women workers make the lowest wages. If anything, this pattern has intensified during the Clinton years as the economy's shift toward low-paying service-sector jobs has continued.

But Clinton says there's good news on the employment front. The president claims to have presided over the creation of millions of new jobs.

The official unemployment rate currently hovers around 5.3 percent, the figure for July. It's almost double that--10.5 percent-for African Americans, and 9 percent for Latinos.

Even official Washington knows that the Labor Department's numbers represent an extreme undercount. The figures don't take into account those who have given up looking for work. They do include everyone who worked at all-even one hour- in the week surveyed.

The government's frequent shifts in methods of statistical analysis make the unemployment data suspect in other ways, too. For example, in June the White House celebrated a supposed drop in unemployment, to 5.2 percent. Yet an independent analysis by a Wall Street firm showed that the total number of layoffs in June 1996 was higher than any other month on record, ever.

Has the hemorrhage of jobs ended? Not by any meaningful measure. Every day brings another announcement of thousands of cuts-from Silicon Valley to auto, rubber and steel production to hospitals and meat-packing plants.

Every day also brings another company demand for wage and benefit concessions from unions, and another set of jobs outsourced to a non-union site.

All this-downsizing, outsourcing, union busting-is part of the capitalist restructuring drive that has been under way since at least 1979. This restructuring is the context for the mass anxiety about jobs and wages that even the White House admits grips the country.

But Clinton is going to tell the Democratic Convention that the restructuring era is over.

Where are the new jobs?

Clinton's one substantive claim is that the economy is generating about 200,000 new jobs every month. Millions of laid-off workers must wonder where these jobs are.

The picture isn't clear. But it appears that some are relatively high-end positions that require college degrees and high-tech skills. That leaves out most workers.

The rest are at the lowest end: minimum-wage jobs with no benefits. And a great many are part-time or temporary.

Which means average workers looking for decent full-time jobs are out of luck. Those jobs have been restructured out of existence.

What does the AFL-CIO have to say about Clinton's claim that the layoffs are over?

"We don't quite believe it," said AFL-CIO Political Director Steve Rosenthal. "We are not convinced that America has turned the corner. But on the other hand, we feel strongly that the president needs to be re-elected."

That's unfortunate for the 13 million workers the AFL-CIO represents. Diverting workers into voting for one or the other capitalist politician won't win anything.

The way to turn around the layoffs and raise wages isn't to pledge allegiance to politicians who work for the class laying workers off and cutting their wages. The way is to wage an independent working-class struggle for jobs at decent wages.

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