Jobs, pay, and the score so far

There may or may not be "two Americas," but when it comes to the economy, there are certainly two widely differing views.

Republicans point to solidly growing national output - better than 3 percent for more than a year - thanks in part to President Bush's tax cuts. The job market is starting to sprout "help wanted" signs from Long Beach to Fort Lauderdale. The "misery index," the sum of the inflation and unemployment rates, is lower than when presidents sought reelection in 1996, 1992, or 1984.

Democrats say the economy may be growing, but it's creating neither enough jobs to match the growth of the labor force nor enough well-paying ones to keep pace with inflation. And Bush's tax cuts have helped mainly the rich.

"It's perfect for an election year. It's a half-empty, half-full picture," says Avery Shenfeld, an economist with CIBC World Markets, a bank subsidiary that tracks the United States economy from Toronto.

Amid this unusually well-matched battle over economics, one of the campaign's pivotal issues, here's an attempt at a reality check:

• Overall economic growth is healthy, despite a possibly worrisome uptick in inflation. Score one, economists say, on the upbeat side.

• Job growth, too, appears to be recovering to health, but so far not strongly enough to cut the jobless rate much. A mixed picture.

• On incomes, the picture is more negative. Adjusted for inflation, wages have fallen back to where they were in November 2001. While Bush's tax cuts put rebate checks in millions of pockets, most of the benefit went to the rich.

• Debate rages on the quality of jobs - whether America is replacing well-paying jobs with "burger flippers." One new assessment notes that the majority of new jobs have long been created in higher-paying categories rather than lower-paying ones. But it adds that the economy now seems weaker than usual on job quality.

Here's more detail on jobs, incomes, and the "burger flipper" debate.

Since the economy started to add new jobs last August, employers have added 1.5 million through June. The unemployment rate has remained essentially flat at 5.6 percent since December, with the jobless numbering 8.2 million. The new jobs are welcome, but just as the recession was a mild one, this is "the weakest hiring cycle in modern history," states Stephen Roach, economist at Morgan Stanley in New York.

It is now 32 months since the 2001 recession ended, yet Bush could become first president since Herbert Hoover to see fewer nonfarm jobs at the end of four years than at the start of his term.

As of June, the number of jobs is short 1.1 million. "Bush could well make it," says Mr. Shenfeld. "But just."

The last monthly employment numbers available before the November election will be for September. So simple math indicates monthly job growth would have to exceed a husky 366,000 for three months to wipe out the job deficit. But is that the right way to look at the issue?

Jared Bernstein, an economist at the liberal-leaning Economic Policy Institute in Washington, notes the economy must create jobs not just for the unemployed but also for new entrants into the labor market.

After adjustment for inflation, average hourly wages in May of $15.64 fell back to exactly the same level as November 2001, the month when the last recession ended. Over the 12 months to May, nominal wage growth slowed to 2.2 percent, less than the inflation rate, a number swelled by high energy and medical price increases.

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