Friday, September 03, 2004


Here’s something it would be good for Republicans, as well as the rest of the electorate, to know: The Bush administration’s claim that it has raised real wages in the United States is based mainly on increased spending by the government.

Most people can shrug this off, since spending is spending and rising wages are rising wages. No matter what, it’s a good thing, or at least doesn’t hurt.

But Republicans want less government. It’s what they’re all about. So they might question the people in charge if government spending is the only thing about rising wages that actually has to do with money people are getting in paychecks.

Floyd Norris’ column in The New York Times today goes into much more depth about this, and I will quote it at length. If this election needs more of anything, it’s more dissemination of facts:
The tax cuts that President Bush pushed through Congress were a big reason for the gain. Adjusted for inflation, taxes paid in July were down 23 percent from December 2000, the last month of the Clinton administration. (All numbers are at seasonally adjusted annual rates.)

What else contributed to the increase? Private businesses are paying a lot more for employee benefits, especially health care. Those costs are up 23 percent, adjusted for inflation. And government spending on its benefit programs, principally Social Security, Medicare and Medicaid, is up 19 percent. All that spending counts in disposable personal income, and makes the overall number look better. But few of us feel better off when health insurance premiums go up.

In the area people think of when they hear about personal income — wage and salary payments — the picture is not as pretty. The entire increase there comes from the government payroll. Adjusted for inflation, private industry is paying almost exactly the same as in 2000. To be precise, private spending on wages is up less than 0.1 percent.

No administration back to John F. Kennedy has done as poorly ...

The share of wage and salary income coming from the government can be seen as a measure of the size of government relative to the economy. It ... fell rapidly under Bill Clinton, hitting a low of 16 percent in late 2000.

It has risen under the current administration. The latest quarterly figure showed 17.4 percent of all wage and salary payments came directly from the government.

Republicans will still love the part about the tax cuts helping. Democrats will still note that more of those tax cuts could have gone to people who weren’t already bringing home hundreds of thousands of dollars in salary.

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