Last month, our country said farewell to Ronald Reagan. Even his
former enemies had to admit President Reagan won the Cold War,
tamed inflation and rebuilt the economy after the stagflation of
the Carter years. The praise was overwhelming and
heartwarming.
But it wasn't universal. In the New York Daily News, columnist
Denis Hamill claimed Reagan's policies "helped transform the U.S.
from a manufacturing giant into a nation of burger-flippers" by
"destroying our manufacturing base."
This charge isn't new. Like a political comet, it seems to come
around during election cycles. So let's take a closer look at
it.
Remember that in 1992, Bill Clinton captured the presidency behind
the slogan "It's the economy, stupid," even as the country was
recovering from a brief recession. This year, the Kerry-Edwards
ticket is taking a similar tack. The campaign recently claimed,
"America's middle-class families are less financially secure today
than they were when [George W.] Bush took office," and their "Two
Americas" theme aims to highlight the differences between rich and
poor.
But there's a real problem with this approach: The economy is
booming. And that's good for everyone.
Our economy has added 1.5 million jobs over the last 10 months. And
as Heritage Foundation economist Timothy Kane wrote recently,
"Since January 2001, American disposable incomes have risen by 7.5
percent, wages have risen by 2.4 percent, and the government
projects 21 million good job opportunities over the 2002-2012
decade."
These openings will include some "burger-flipping" jobs, of course,
but nothing out of the ordinary. The Labor Department's
Occupational Outlook Quarterly projects 12 percent growth in the
food industry over the next decade -- but that's the same rate of
growth it projects for the entire labor force. In other words,
there will probably be zero real growth in "burger-flipping"
jobs.
There will, however, probably be an increase in the number of
Americans working for themselves. At least 7.5 million already do,
and these jobs don't show up in the payroll surveys used to
tabulate employment numbers. There's good reason, though, to
suspect these workers are happy and prosperous. After all, polls
confirm one of the most popular aspirations of Americans is to be
their own boss.
Meanwhile, for those who decide to keep working for someone else,
there should be plenty of growth in high-skill jobs. For example,
the Labor Department projects a 45 percent increase in the number
of software engineers, a 49 percent increase in the number of
physician assistants, a 36 percent increase in the computer and
information-systems sector and a 38 percent jump in the number of
postsecondary teachers, to name just a few areas.
All those jobs should generate even more income growth, which would
come on top of some amazing recent gains.
Since January 2001 real disposable income per person is up 7.5
percent. And annual real income per person has increased 5.2
percent, meaning the average person is taking home an extra $1,800
after inflation. According to Tim Kane, that's enough for every
American to buy an extra 900 gallons of gas.
All these statistics add up to the simple fact that today's
American jobs are higher paying than they were during the height of
the dot-com boom in the go-go 1990s.
The only thing Reagan destroyed was malaise -- or, more
technically, the perverse incentives that discouraged work by
overtaxing income. Reagan's tax cuts fueled a 20-year economic
boom, marred only by the two mildest postwar recessions. And
history will note that Reagan's successors -- of both parties --
have basically maintained his pro-trade, low-tax legacy.
A handful of columnists and politicians will be eager to ignore the
good news and focus on the negative. And that's fine for them. But,
for the rest of us, life is good and getting better. Let's get back
to work.
Ed Feulner is president of The Heritage Foundation
(heritage.org), a Washington-based public policy research
institute.
COMMENTARY Political Process
All Worked Up
Jul 16, 2004 2 min read
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