If members of the U.S. Senate had bothered to scan the news before they cast their votes Wednesday on whether to allow final debate and passage of a bill that would increase the minimum wage, they would have seen headlines like this one from Bloomberg News: “Growth Freezes Up as U.S. Business Spending Slumps.”
One would think that would have given senators pause before 42 of them voted to filibuster the legislation, which would increase the minimum wage to $10.10 an hour. After all, Tuesday’s news of a barely perceptible 0.1 percent increase in gross domestic product growth in the first three months of the year is one more sign of how a virtuous economic cycle has been broken by wrong-headed economic austerity. And a crucial part of restoring that cycle – in which businesses do well because consumers are doing well in a broadly shared prosperity – is to give people work and then make work pay.
You can accept all of the caveats of this disappointing growth report – it was a particularly cold winter in much of the country, much of the growth decline was due to a drop in exports and in reduced business investment – and still see in the report the bitter fruit of the refusal of conservatives in Congress and in the states to allow the investments working people and the economy as a whole need to get back on their feet.
Economic Policy Institute economist Josh Bivens wrote Thursday that “if one wanted to explain why the current recovery has been so anemic relative to previous recoveries,” all you have to do is look at economic data that shows that “essentially the entire gap in GDP growth between the current recovery and historical averages can be explained by the contraction in government spending” between 2010 and 2013 – a contraction at the behest of conservatives in Congress.
Wages, of course, is also a big part of the story. After seeing average wages fall during the Great Recession, average hourly worker wages, adjusted for inflation, are back to where they were in 2009, as the recession was beginning. But that means that workers received none of the fruits of the productivity gains business experienced in the past six years; all of those gains went to the top 5 percent.
Recall that economists Thomas Piketty and Emmanuel Saez found that the top 1 percent pocketed 93 percent of the nation’s income gains between 2009 and 2012.
This is not the stuff of a sustainable recovery, and it shows. Yet, congressional Republicans refuse to admit that they erred in not supporting measures that would move the country faster toward full employment, such as accelerated spending on infrastructure improvements and other public assets; renewable energy research, development and deployment; and aid to state and local governments to restore jobs of teachers, first responders and other essential public workers that were cut during the recession.
In fact, the recent House Republican embrace of the budget written by Rep. Paul Ryan represents a doubling down on a policy of enriching the rich and impoverishing everyone else. So will the expected full House vote in favor of a package of tax cuts that will add $310 billion to the deficit over the next 10 years. The willingness of House Republicans to push these tax cuts, many of which will primarily benefit big business, without regard to their impact on the nation’s debt stands in sharp contrast to their refusal to consider an extension of unemployment benefits for the long-term jobless at only a fraction of that cost.
As job opportunities and wages continue to be weak for working-class people, President Obama and Democrats are taking the blame in opinion polls. The truth, of course, is this is not the economy of President Obama and certainly not the economy of progressive Democrats. This is an economy shaped by Republican gridlock, the sum total of deep-sixed attempts to rebuild the middle class and forced compromises.
On Friday we’re likely to see more evidence in the monthly jobs report from the Bureau of Labor Statistics. Even if the headline appears positive – job growth for the month of March exceeding 200,000, perhaps – underneath the headline will be the truth of an economy performing far below its potential, and far below what ordinary people need in order to find good jobs at living wages. There is an even more urgent need to tell the real story of an American economy hobbled by conservatism and oligarchy, and to build an independent movement that advances a bold, progressive populist alternative.