Bush's Economic Failure Weakens Middle Class, Deepens Poverty and Harms Women and Families

August 27, 2004

"Yesterday's Census Bureau report—that for the third year in a row poverty in the U.S. has deepened—is a strong indicator of that we have a larger problem: we have a phantom economic recovery," said NOW Vice President for Action Olga Vives. "Despite the Bush administration's rhetoric that an economic recovery is underway, there are abundant signs that for most working families their situations are no better—and in many cases are far worse."

In defense of their failed economic policies the Bush administration points to a 4.4 percent increase in last year's economy, without noting that the increase mostly reflected profit surges for corporations. The administration's objective of rewarding the top earners with deep tax cuts instead of providing more generous cuts to working families has had a predictable outcome: the working families who drive the economy through consumer demand have less money to spend. They are not buying goods and services and, as a consequence, consumer demand and related job creation are not increasing.

"It's Economics 101—although George W. Bush has a hard time grasping these simple facts, " Vives added. "Moreover, the Bush administration has done nothing to help working women and their families—and many are barely making ends meet."

From 2001 to the present marks the only period of sustained job loss for women in the last 40 years; women workers have lost over 300, 000 jobs between the start of the recession in March, 2001 through the March, 2004, report. According to the Institute for Women's Policy Research, the proportion of single mothers who are employed fell in 2003 and the unemployment rate rose markedly among single mothers, from an already-high 9.5 percent to a desperate 10.2 percent.

When Bush took office in 2001, the U.S. was experiencing a national surplus for the first time in recent memory, unemployment and poverty had been on the decline for years, and the economy was booming. Now, almost four years later, poverty is on the rise, healthcare coverage is on the decline, and the country is faced with the largest national deficit in history. Lower middle class families are slowly slipping below the poverty line and the poorest are becoming even more destitute. Most of these families are headed by women.

The Bush economic agenda has succeeded in its goal of benefiting the wealthiest few at the expense of the vast majority of people at middle and low incomes, especially women and children. The Congressional Budget Office recently released a report finding that a significant proportion of the tax burden has been shifted from the wealthy to the middle class—an unfair and regressive policy.

The number of people living below the poverty line has steadily increased throughout the Bush administration, and 2003 was no exception. Although many income brackets experienced very little change during 2003, the income of those families at risk of going into poverty saw a decline. Men experienced a slight increase in overall income, while—not surprisingly—income for women declined. Those in deep poverty, the bottom 20% under the poverty line, felt a three percent drop in income. The bottom line: high income earners experienced an increase in earnings while low income workers clearly suffered a decrease.

The gap between high and low income workers is larger than it has been since 1967, and even the gap between low and middle income workers is widening . In addition, the newly-released report also indicates that the wage gap between men and women widened for the first time in four years.

According to the 2003 poverty census, a family of three at the top of the poverty line lives on an average of 51 dollars a day. That figure is based on the assumption that their child care and health care are fully subsidized by the government, which is not the case for most working poor families. For many poor families child care may cost 20 percent or more of their annual income. The Bush administration has cut funding for programs such as child care, which are essential to single parent households, in favor of expanded unproven programs such as marriage promotion.

In 2003, more individuals were without healthcare coverage than at any point in recent times, especially among the working class. People of color groups, such as Latinos, suffered the largest decline in healthcare coverage; one third do not have health insurance. Economists project that we will see a decline in private insurance coverage as well. Being employed does not guarantee health insurance: eighty percent of the uninsured are employed.

Under this administration, access to health insurance coverage will continue to shrink - especially for women. States that are in fiscal crisis because of the federal cuts have tightened eligibility requirements and cut services under Medicaid, and cannot keep up with the increasing need for coverage. The Bush administration effectively capped spending for Medicaid by creating a block grant program in the states. Women, who comprise 70% of adults covered by Medicaid, will suffer the most as a result of the Bush administration spending cap.

"Four more years of these destructive economic policies will result in a country that we do not recognize and do not want," Vives said. "We urge women and men everywhere to work to re-defeat George W. Bush in 2004."

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