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Following two weak months of job growth, growth in August modest
Job growth was a modest 144,000 in August, enough to absorb the increase in working-age population but, in the long-term, too small to actually lower unemployment (unless the labor force shrinks again, as it did last month). August's job growth follows two months of very weak growth of 73,000 in July and 96,000 in June and is substantially slower than the 295,000 jobs created monthly (on average) in March, April, and May. This pace of job creation is far slower than what the Bush Administration said would follow as a result of its 2003 tax cuts.

The Bush Administration called the tax cut package, which took effect in July 2003, its "Jobs and Growth Plan." The president's economics staff, the Council of Economic Advisers (CEA, see background documents), projected that the plan would result in the creation of 5.5 million jobs by the end of 2004 306,000 new jobs each month starting in July 2003. The CEA projected that the economy would generate 228,000 jobs a month without a tax cut and 306,000 jobs a month with the tax cut.  Thus, it projected that 4,284,000 jobs would be created over the last 14 months. In reality, since the tax cuts took effect, there are 2,668,000 fewer jobs than the administration projected would be created by enactment of its tax cuts. The August job growth of 144,000 fell 162,000 jobs short of the administration's projection. As can be seen in the chart below, job creation failed to meet the administration's projections in 12 of the past 14 months.

Difference between actual and projected monthly job growth

Weakest job recovery since the 1930s
Since the recession began 41 months ago in March 2001, 1.0 million jobs have disappeared from the U.S. economy, representing a 0.8% contraction. To put this performance in historical perspective, the Bureau of Labor Statistics began collecting monthly jobs data in 1939 (at the end of the Great Depression). In every previous episode of recession and job decline since 1939, the number of jobs had fully recovered to above the pre-recession peak within at least 31 months of the start of the recession (the average, excluding the 1991 recovery, has been 20 months to full recovery).

Change in total employment, 41 months after the recession began

Private-sector jobs have fared worse than public-sector jobs. Jobs in the private sector have dropped by 1.7 million since March 2001, representing a 1.5% contraction. However, having no job losses, or gains, is a very low standard by which to judge a recovery with history as a guide, one would have hoped that the economy would have recovered the jobs lost months ago. If job growth had been at the pace of other post-war business cycles (a 5.5% growth by the 41st month), then over 7 million new jobs would have been created by now.

Change in private-sector employment, 41 months after the recession began

Declines continue in employer-provided health care coverage
According to an EPI analysis of the new data released by the US Census last week, employer-provided health insurance coverage fell between 2002 and 2003, continuing its decline since 2000.   In 2003, 56.4% of workers who worked at least 20 hours per week and 26 weeks per year received employer-provided health insurance from their own employer, down from 57.3% the year before and down a total of 2.5 percentage points since 2000.   Workers earning lower wages are significantly less likely to have employer-provided health coverage than workers earning higher wages.   In 2003, 77.8% of workers in the highest quintile had employer-provided health insurance, whereas only 24.9% of workers in the lowest quintile did.   Although the decline in employer-provided health insurance from 2000 to 2003 pervaded all wage levels, the number of insured workers with wages in the second wage quintile (see chart) fell the most (-4.0%).

Declines in private-sector employer-provided health insurance coverage from 2000 to 2003


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