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The True State of the Union

Discussion in 'Political Discussion' started by mikey, Jan 30, 2006.

  1. mikey

    mikey In the Starting Line-Up

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    http://www.chicagotribune.com/busin...tory?coll=chi-business-hed&ctrack=1&cset=true

    MAJOR ISSUES FOR THE STATE OF THE UNION: THE ECONOMY
    Bush touts it, jobless doubt it
    President's talk of strong economy hard for some in St. Louis to believe

    By Mark Silva
    Tribune national correspondent
    Published January 30, 2006
    ST. LOUIS -- Angie Totten was 19 when she started on the night shift at Ford Motor Co. She met her husband on the mini-van assembly line. They had two children. In the good years, with overtime, they made close to $100,000 a year.

    Now Totten, 39, and her husband, Jeff, 40, have no clue about the future for them or their kids, ages 9 and 7. The Tottens, along with more than 1,300 others, lost their jobs last week when Ford announced it would idle the old Hazelwood assembly plant outside St. Louis in March and close it in 2008.

    It is against a backdrop of bad news from U.S. manufacturing giants such as Ford and General Motors Corp.--companies that once empowered an American middle class and now struggle for survival--that President Bush will deliver his State of the Union address Tuesday.

    The president will trumpet the nation's economic successes, with unemployment down and productivity up, crediting his tax cuts and calling on Congress to make them permanent. But the gap between the president's view and that of many working Americans is a yawning one and quite apparent in this once proud but dramatically shrunken middle-American city where good-paying work is hard to find.

    Throughout Missouri and across the nation, people tell pollsters that the economy they confront every day is not so promising and they see little hope for improvement. New jobs may be opening in America, people on the streets of St. Louis say, but those jobs don't carry the wages and benefits that make for a comfortable living.

    "I know 1,300 people who would disagree with Bush's view of the economy," said Angie Totten, seated at the smoky Hazelwood Bowl, across from the Ford plant where an SUV painted in an American flag motif revolves on a turntable.

    That countervailing view is supported in many national surveys, including a Los Angeles Times/Bloomberg News Service poll published Friday that indicated only 37 percent of Americans approved of the president's handling of the economy.

    The perception gap could make it difficult for Bush to secure support for the agenda he unveils Tuesday night, including proposals to make health care more affordable.

    Bush "and the people around him believe that if you tell people the same story over and over again they will believe it," said Totten, who voted against Bush. "There is so much that's construed as truth, but it's not real."

    In Missouri, about 18,000 more people are employed today than when Bush became president, but 36,000 more are unemployed, according to the Bureau of Labor Statistics.

    And for those working, the rising cost of health insurance or the lack of insurance weigh heavily, as do regular reports of major corporations abandoning their pension plans.

    Bush touts a national unemployment rate of 4.9 percent, the lowest in three years.

    "Our economy is growing, it is strong," Bush said last week while acknowledging too "that it is changing" and that U.S. workers must adapt "in a competitive world."

    Bush inherited a recession, said Al Hubbard, his chief economic adviser. But Bush pressed for tax cuts in 2001 and 2003 "and the results have been spectacular," he said. "4.5 million new jobs have been created. Productivity is at record levels."

    To press that case, Bush recently campaigned for his tax cuts in the burgeoning northern Virginia exurb of Loudoun County, where unemployment is 2 percent, the state's lowest.

    One happy story

    "We have plenty of business in this area. The problem is finding the workforce," said Charles Kuhn, president of JK Moving and Storage, where Bush staged his appeal. Kuhn is happy to credit the president--since Bush took office, his company's revenue and profits have doubled, his employment of 509 people up by 161 percent.

    But that area is riding a trend bigger than any tax cut: a housing explosion fueled by the growing federal government and tech industry. Loudoun County already had the fastest-growing employment among all major counties in the nation, 12 percent in one year before Bush's election.

    In the old urban enclave of St. Louis, in contrast, unemployment runs at 8.3 percent in a shrunken city of about 345,000 that has lost nearly two-thirds of its population since the 1950s with an exodus of the auto, airplane and shoe manufacturing that once made the city hum.

    Work is easier to find in the broader St. Louis metropolitan area, where unemployment runs at 5.3 percent. But the city deprived itself of income from its thriving suburbs with its decision in 1876 to carve itself apart from the county.

    It is the lower-paying services sector that is growing, according to the Federal Reserve Board of St. Louis, which reports "modest" growth in the St. Louis area.

    "Here in Missouri we hear about those jobs being created, but they are newer jobs that replace the quality jobs being lost," said state Sen. Joan Bray, a Democrat from St. Louis. "What a different world it is for the generation behind us. They don't ever expect to be as affluent as we are, even though we are middle class."

    Here and nationally, experts say, the government and many prominent economists gloss over how many people have stopped looking for work and how many are "underemployed," working below their ability in the low-wage and often no-benefit jobs of a burgeoning service economy.

    Full-time jobs elude millions

    Nationally, the government reports 4.1 million people are working part-time, unable to find full-time work. Another 1.6 million are "marginally attached" to the workforce--they had looked and not found work last year but hadn't searched recently--including 451,000 "discouraged workers" who have quit looking.

    For many, the average weekly wage has failed to keep pace with inflation; while earnings were up 3.1 percent last year, they effectively declined by 0.4 percent. Add to that the rising costs of health care, fueling a car and heating a home, and purchasing power has diminished further.

    "I don't think the average person is seeing the economy in such great shape," said Ken Warren, a political scientist at St. Louis University. "They are seeing it in terms of what they pay for gas, they're seeing it in terms of what they pay for health care. Bush can talk about an upturn. There are indicators that show there is an upturn. But these aren't things that people deal with every day."

    The problem for Bush is evident in polls. Just 34 percent of Americans surveyed by the Pew Research Center earlier this month rated the economy as good or excellent, and 64 percent called conditions fair or poor.

    St. Louis has its particular problems.

    Calvin Miller, who once ran five dry-cleaning shops in St. Louis, pulled out years ago and has settled in Granite City, Ill.

    "It got so complicated--robberies, break-ins," Miller said. "Pistols, I didn't mind. But shotguns, I didn't like."

    A city that was home to nearly 1 million in the early 1950s now appears barren in many places, with the baronial lion statues at the manses of Hortense and Lenox Place standing as reminders of a lost past.

    Now the biggest employers are hospitals and universities.

    "How far can your economy travel on that?" asked Joseph Heathcott, professor of American studies at St. Louis University. "Not to mention what the average worker in a hospital is making compared with what workers made on the assembly line."

    The average wage of health-care support workers is $12.50 an hour, the Bureau of Labor Statistics reports. Assembly-line workers at Ford made $26 an hour here.

    Angie Totten, who started part-time at Ford to get a foot in the door in 1985, began at $10.90 an hour. As a team leader in the body shop last year, she was making $27 an hour.

    Last week, she and fellow workers were called into the plant, following weeks of pre-Christmas layoffs, for a video feed from Detroit to announce closings eliminating up to 30,000 jobs by 2010.

    They had been warned of the eventual closing in 2002, Totten said, and "I was holding out hope that these words wouldn't come."
     

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