WASHINGTON - The wealth gap between the rich and poor and the sluggish job market in the United State are looming as major problems for President George W. Bush as he campaigns for another term in office, analysts here say.
According to the latest figures, the wealth gap has been growing over the past decade, despite a boom in housing and the stock market, while the job situation, another important economic indicator, has also worsened.
There is a significant, and growing, wealth gap between lower-income households and the rest of America, said a report released Tuesday by the Consumer Federation of America, Credit Union National Association and the National Credit Union Foundation.
Between 1992 and 2001, the net wealth of low-income U.S. households increased by only seven percent--from $6,261 to $6,720. By comparison, the net wealth of all U.S. Households increased by 42 percent--from $60,695 to $86,100, said the report.
In 2001 the net wealth of the typical poor household was $6,720 compared to $86,100 for the typical U.S. household, a wealth gap of thirteen to one, it added.
While the findings are unlikely to feature highly in the ongoing heated debate between Democrats and Republicans in the run-up to the November presidential election, experts say it is likely to have a psychological effect on consumers already worried about job losses.
Increasingly the focus in debates between Democratic contenders for Bush's job and between the president and the opposition has been the unemployment rate.
Under Bush's presidency, the unemployment rate has shot up from 4.2 percent in 2001 to 5.6 percent now, a 33 percent increase, and above the five percent rate that many economists consider to be the natural jobless rate.
The Washington-based Center for Economic and Policy Research estimates that at the current rate of job creation it will take two-and-a-half more years just to regain the jobs lost under the current administration.
The center also says that Bush could become the first president in more than 70 years to accumulate a net loss of jobs during his term.
Today some eight million Americans are out of work.
And although Bush told workers this week there is an undeniable sense of economic optimism across the country, a new ABC News/Money Magazine poll found that consumer confidence took its biggest plunge in more than 18 years of polling.
On everything from shipping U.S. jobs overseas, to stripping worker protections, to rewarding companies for reducing health benefits for their employees, the Bush administration has racked up a spectacular record of exacerbating the already difficult economic challenges Americans are facing, said the Center for American Progress, a Washington think tank founded by members of the administration of former President Bill Clinton.
This week, the administration received sharp criticism over its approval of the growing trend of companies relocating U.S. Jobs overseas.
Many of these firms move their production lines to developing countries, where they profit from cheaper labor cost. Many U.S. technology companies, for example, use Indian tech workers instead of their more expensive U.S. counterparts.
Late last week Democratic Senator Tom Daschle introduced a bill that would hamper the offshoring of jobs.
The legislation requires any company that plans to lay off 15 or more workers and send those jobs overseas to disclose how many jobs are affected, where the jobs are going and why they are being offshored.
Firms would also be required to give dislocated workers three months warning and notify federal and state agencies responsible for helping laid-off workers.
Embattled administration economist N. Gregory Mankiw on Tuesday had to defend comments he made last week praising the shipping of jobs abroad as a long-term benefit for the U.S. economy.
Economists and non-economists speak two different languages, Mankiw, chairman of Bush's Council of Economic Advisers, told the National Economists Club.
Republicans, including House of Representatives Speaker J. Dennis Hastert, joined forces with opposition Democrats to criticize Mankiw for describing outsourcing of jobs as a new way of doing international trade.
Creating an environment for robust job creation is a paramount goal of the president and his economic team, he added.
Bush took the same message last weekend to Florida, a swing state whose votes in 2000 helped put him in the White House.
The president said the economy under his watch has become lively, and could be further boosted with tax cuts, one of his favorite economic measures.
But Democrats were quick to point out that the President, who promised that tax cuts would create 131,200 jobs in Florida, failed to mention that only 61,800 jobs have emerged, a shortfall of almost 70,000 jobs in the state.
Other administration officials followed the same script in early campaigning for the vote. Treasury Secretary John W. Snow, Commerce Secretary Don Evans, Labor Secretary Elaine L. Chao, and Small Business Administrator Hector Barreto are now visiting the U.S. northwest, one of the regions hardest-hit by job losses, to promise that their plans will eventually create jobs.
On Wednesday, White House Spokesman Scott McClellan stressed Bush's record on job creation. At a press briefing in Washington he told reporters that more than 366,000 jobs were created in the last five months.
The unemployment rate continues to decline, he said. It is now at the lowest point it has been in two years, and it is below the average of the '70s, '80s, and '90s.
But the U.S. Labor Department reported that only 1,000 jobs were gained in December, far below the expectations of some experts, who had predicted growth of 150,000 posts.
The White House on Wednesday refused to repeat forecasts that the administration will be able to add 2.6 million jobs to the economy by the end of this year.
When asked whether the White House still stands behind the forecast issued nine days ago by the Council of Economic Advisors, McClellan declined to back the figure.
I think that people can debate the numbers all they want, he said. The President is focused on acting on policies to create as robust an environment for job creation as possible, so that we can help those who are hurting because they are looking for work and cannot find a job.
The Democrats strongest contender to date for Bush's job, John Kerry, poked fun at the prediction.
George Bush is saying he's going to create 2.6 million jobs this year alone--and his advisers are saying, 'what, you didn't actually believe that did you'?
© Copyright 2004 IPS - Inter Press Service