All Worked Up

COMMENTARY Political Process

All Worked Up

Jul 16th, 2004 2 min read
Edwin J. Feulner, Ph.D.


Edwin J. Feulner is the founder and president of The Heritage Foundation.

Last month, our country said farewell to Ronald Reagan. Even his former enemies had to admit President Reagan won the Cold War, tamed inflation and rebuilt the economy after the stagflation of the Carter years. The praise was overwhelming and heartwarming.

But it wasn't universal. In the New York Daily News, columnist Denis Hamill claimed Reagan's policies "helped transform the U.S. from a manufacturing giant into a nation of burger-flippers" by "destroying our manufacturing base."

This charge isn't new. Like a political comet, it seems to come around during election cycles. So let's take a closer look at it.

Remember that in 1992, Bill Clinton captured the presidency behind the slogan "It's the economy, stupid," even as the country was recovering from a brief recession. This year, the Kerry-Edwards ticket is taking a similar tack. The campaign recently claimed, "America's middle-class families are less financially secure today than they were when [George W.] Bush took office," and their "Two Americas" theme aims to highlight the differences between rich and poor.

But there's a real problem with this approach: The economy is booming. And that's good for everyone.

Our economy has added 1.5 million jobs over the last 10 months. And as Heritage Foundation economist Timothy Kane wrote recently, "Since January 2001, American disposable incomes have risen by 7.5 percent, wages have risen by 2.4 percent, and the government projects 21 million good job opportunities over the 2002-2012 decade."

These openings will include some "burger-flipping" jobs, of course, but nothing out of the ordinary. The Labor Department's Occupational Outlook Quarterly projects 12 percent growth in the food industry over the next decade -- but that's the same rate of growth it projects for the entire labor force. In other words, there will probably be zero real growth in "burger-flipping" jobs.

There will, however, probably be an increase in the number of Americans working for themselves. At least 7.5 million already do, and these jobs don't show up in the payroll surveys used to tabulate employment numbers. There's good reason, though, to suspect these workers are happy and prosperous. After all, polls confirm one of the most popular aspirations of Americans is to be their own boss.

Meanwhile, for those who decide to keep working for someone else, there should be plenty of growth in high-skill jobs. For example, the Labor Department projects a 45 percent increase in the number of software engineers, a 49 percent increase in the number of physician assistants, a 36 percent increase in the computer and information-systems sector and a 38 percent jump in the number of postsecondary teachers, to name just a few areas.

All those jobs should generate even more income growth, which would come on top of some amazing recent gains.

Since January 2001 real disposable income per person is up 7.5 percent. And annual real income per person has increased 5.2 percent, meaning the average person is taking home an extra $1,800 after inflation. According to Tim Kane, that's enough for every American to buy an extra 900 gallons of gas.

All these statistics add up to the simple fact that today's American jobs are higher paying than they were during the height of the dot-com boom in the go-go 1990s.

The only thing Reagan destroyed was malaise -- or, more technically, the perverse incentives that discouraged work by overtaxing income. Reagan's tax cuts fueled a 20-year economic boom, marred only by the two mildest postwar recessions. And history will note that Reagan's successors -- of both parties -- have basically maintained his pro-trade, low-tax legacy.

A handful of columnists and politicians will be eager to ignore the good news and focus on the negative. And that's fine for them. But, for the rest of us, life is good and getting better. Let's get back to work.

Ed Feulner is president of The Heritage Foundation (, a Washington-based public policy research institute.