[Joint House and Senate Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-646
 
                  THE EMPLOYMENT SITUATION: MARCH 2008

=======================================================================

                                HEARING

                               before the

                        JOINT ECONOMIC COMMITTEE
                     CONGRESS OF THE UNITED STATES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             April 4, 2008

                               __________

          Printed for the use of the Joint Economic Committee



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                        JOINT ECONOMIC COMMITTEE

    [Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]

SENATE                               HOUSE OF REPRESENTATIVES
Charles E. Schumer, New York,        Carolyn B. Maloney, New York, Vice 
    Chairman                             Chair
Edward M. Kennedy, Massachusetts     Maurice D. Hinchey, New York
Jeff Bingaman, New Mexico            Baron P. Hill, Indiana
Amy Klobuchar, Minnesota             Loretta Sanchez, California
Robert P. Casey, Jr., Pennsylvania   Elijah E. Cummings, Maryland
Jim Webb, Virginia                   Lloyd Doggett, Texas
Sam Brownback, Kansas                Jim Saxton, New Jersey, Ranking 
John E. Sununu, New Hampshire            Republican
Jim DeMint, South Carolina           Kevin Brady, Texas
Robert F. Bennett, Utah              Phil English, Pennsylvania
                                     Ron Paul, Texas

                  Michael Laskawy, Executive Director
            Christopher J. Frenze, Republican Staff Director


                            C O N T E N T S

                              ----------                              

                      Opening Statement of Members

Statement of Hon. Charles E. Schumer, Chairman, a U.S. Senator 
  from New York..................................................     1
Statement of Hon. Baron P. Hill, a U.S. Representative from 
  Indiana........................................................     2
Statement of Hon. Sam Brownback, a U.S. Senator from Kansas......     5

                                Witness

Statement of Dr. Keith Hall, Commissioner, Bureau of Labor 
  Statistics, Accompanied by: Philip L. Rones, Deputy 
  Commissioner, Bureau of Labor Statistics, U.S. Department of 
  Labor, Washington, D.C.; and Michael W. Horrigan, Associate 
  Commissioner for Prices and Living Conditions..................     3

                       Submissions for the Record

Prepared statement of Senator Charles E. Schumer.................    17
Prepared statement of Representative Baron P. Hill...............    18
Prepared statement of Keith Hall, Commissioner, Bureau of Labor 
  Statistics.....................................................    18
Prepared statement of Senator Sam Brownback......................    19


                       THE EMPLOYMENT SITUATION:
                               MARCH 2008

                              ----------                              


                         FRIDAY, APRIL 4, 2008

             Congress of the United States,
                          Joint Economic Committee,
                                                     Washington, DC
    The committee met at 9:30 a.m., in room 106 of the Dirksen 
Senate Office Building, the Honorable Charles E. Schumer 
(Chairman) and Congressman Baron Hill, presiding.
    Senators present: Schumer and Brownback.
    Representatives present: Hill.
    Staff present: Christina Baumgardner, Heather Boushey, 
Stephanie Dreyer, Nan Gibson, Greeta Goodwin, Colleen Healy, 
Annabelle Tamerjan, Chris Frenze, Bob Keleher, Jeff 
Schlagenhauf, and Jeff Wrase.

OPENING STATEMENT OF HON. CHARLES E. SCHUMER, CHAIRMAN, A U.S. 
                     SENATOR FROM NEW YORK

    Senator Schumer. The hearing will come to order. I want to 
thank Commissioner Hall and his staff for being here.
    Well today we got some bad news on the job front. The 
numbers 80,000 and 60,000 should be a shot across the bow to 
this Administration to get off its hands and start moving in 
terms of getting us out of the bad straits we are in in this 
economy.
    These numbers are a shot across the bow. They are saying 
that the economy is getting soft. It is no longer just housing 
prices and credit, but jobs. And once you get the three 
together headed downward, there is real trouble in the economy.
    Despite these job numbers, the Administration continues its 
Hoover-like attitude of doing nothing. We get no help on 
getting some relief in the mortgage foreclosure crisis. We get 
no help on restructuring our financial system in a way that 
meets the needs of the Twenty-first Century.
    We get no help on crafting a stimulus package that can get 
the economy going--a second stimulus package dealing with 
infrastructure and unemployment and the kind of direct spending 
that is needed to augment the tax relief that we have passed.
    And so these numbers hopefully will be a wake-up call to 
the Administration, a wake-up call to stop its Hoover-like 
trance of doing nothing, letting the free market govern in any 
way. We believe in free markets but we have learned over the 
last 100 years that there are ways to improve them.
    I want to thank Baron Hill for chairing this hearing. I 
apologize. We have votes. I did not expect to be able to be 
here at all and thank the Commissioner for his work.
    Congressman Hill.
    [The prepared statement of Senator Schumer appears in the 
Submissions for the Record on page 17.]

OPENING STATEMENT OF HON. BARON P. HILL, A U.S. REPRESENTATIVE 
                          FROM INDIANA

    Mr. Hill [presiding]. Good morning everybody. I want to 
welcome Commissioner Hall and thank him for testifying here 
this morning on the March employment situation.
    I have a vested interest in these dreary numbers we have 
recognized this morning, as I have seen firsthand how the 
recent economic downturns have affected my constituents in 
Bloomington, Indiana.
    The General Electric Refrigerator Plant announced in 
February that it will close by the end of 2009, and it will 
result in the loss of 900 jobs for this area.
    Job losses like this are occurring throughout the country 
as today's employment numbers highlight. The labor market news 
keeps getting worse, and today's report is no exception.
    As a matter of fact, yesterday we were anticipating the 
loss of 60,000 jobs--some were estimating 50,000 jobs--and 
today we learned that it is 80,000 jobs.
    March marks the third consecutive month of job losses for a 
total of 232,000 jobs lost in the first quarter of this year. 
We have not seen job losses like this for nearly 5 years.
    Now this chart over here illustrates what is going on right 
now. The downward arrow indicates the loss of jobs in non-farm 
payrolls, and it is alarming. And it keeps on going down.
    I agree with Senator Schumer that this Administration needs 
to get serious about trying to get this economy turned around.
    On Wednesday, the Federal Reserve Chairman Ben Bernanke 
told this Committee that a recession is possible. We do not 
want that to happen. Maybe we are already in that, and so I 
think it is behooving to all of us that we as Members of 
Congress, along with the Administration, try to do something to 
prevent this from happening.
    Yesterday brought news that the weekly unemployment benefit 
claims rose above 400,000, a level that typically signals that 
the labor market is already in recession.
    The Federal Reserve and many private sector economists 
expect unemployment to climb throughout the year. We seem to be 
a long way from a healthy economy which usually adds 150,000 to 
200,000 jobs each month, but the economy has lost 77,000 jobs 
per month on the average in the first quarter of this year.
    The widespread job losses we are seeing are a clear 
indication to me that the economy is in trouble. For nearly 2 
years now the manufacturing industry has shrunk. These trends 
adversely affect my State's economy as Indiana has a high 
proportion of manufacturing jobs compared to the rest of the 
country.
    In Indiana we have seen an average unemployment period of 9 
weeks. And as of the fourth quarter of 2007, 40 percent of 
unemployed Hoosiers have now exhausted their unemployment 
benefits, the eleventh highest in the nation.
    Congress should consider a proposal to provide an extension 
of unemployment benefits that would last an additional 13 
weeks.
    Republicans in Congress and this Administration have 
resisted that. Workers could receive these benefits--workers 
who could receive these benefits are those who have lost their 
job through no fault of their own. They have had the bad luck 
of working for a business that must lay off workers or close 
its doors due to the weakening economy, like the workers at the 
Bloomington General Electric plant.
    Extending unemployment benefits to struggling workers 
should be a high priority. Wages are not keeping up with the 
rising cost of living. Sky high gas prices and rising health-
care costs add to the pinch for families.
    These elements have combined to create the lowest consumer 
outlook for the economy in 35 years. And on another chart here 
we can see that since October real earnings in this country are 
dropping dramatically at an alarming rate.
    As I said earlier, this economy is in trouble and we better 
be doing something about it. I do want to thank Mr. Hall and 
his colleagues for being here to discuss today's labor 
statistics, and I look forward to the continued focus on labor 
market conditions by this Committee.
    Now let me introduce our witness. Dr. Keith Hall is the 
Commissioner of Labor Statistics for the U.S. Department of 
Labor. As Commissioner he oversees the Bureau of Labor 
Statistics which is the principal fact-finding agency in the 
Federal Government in the broad field of labor economics and 
statistics.
    Prior to becoming Commissioner, Dr. Hall was the chief 
economist for the White House Council of Economic Advisors for 
2 years.
    He has also served as the chief economist for the U.S. 
Department of Commerce. Before entering government, Dr. Hall 
was an economics professor on the faculties of both the 
University of Arkansas and the University of Missouri.
    He received his Ph.D. in economics from Purdue University, 
a good old Indiana college. I'm glad that you went there.
    I also want to acknowledge your colleagues Mr. Rones and 
Mr. Horrigan and thank them for joining us today.
    Commissioner Hall, you may proceed with your testimony.
    [The prepared statement of Representative Hill appears in 
the Submissions for the Record on page 18.]

  STATEMENT OF HON. KEITH HALL, COMMISSIONER, BUREAU OF LABOR 
      STATISTICS, ACCOMPANIED BY: PHILIP L. RONES, DEPUTY 
 COMMISSIONER, BUREAU OF LABOR STATISTICS, U.S. DEPARTMENT OF 
  LABOR, WASHINGTON, D.C.; AND MICHAEL W. HORRIGAN, ASSOCIATE 
         COMMISSIONER FOR PRICES AND LIVING CONDITIONS

    Mr. Hall. I thank you, Mr. Chairman. Thank you for this 
opportunity to discuss the March labor market data we released 
this morning.
    Non-farm payroll employment continued to trend down in 
March and the unemployment rate rose from 4.8 to 5.1 percent.
    Payroll employment edged down by 80,000 over the month 
bringing the decline over the past 3 months to 232,000. To put 
these recent changes into context I would note that labor 
market conditions started to weaken more than a year ago.
    Average monthly job growth slowed from 175,000 in 2006 to 
107,000 in the first half of last year, to 76,000 in the last 
half of last year to -77,000 for the first quarter of this 
year.
    The unemployment rate remained at or near 4.5 percent 
during the first half of 2007 but rose steadily to 4.7 percent 
in the third quarter, 4.8 percent in the fourth quarter, and an 
average of 4.9 percent in the first quarter of this year.
    Returning to the payroll employment figures for March, job 
losses occurred in construction, manufacturing, and employment 
services. Job growth continued in health care, food services, 
and mining.
    The construction industry lost 51,000 jobs over the month 
with declines concentrated in residential and nonresidential 
specialty trade contracting. Since its peak in September 2006, 
construction employment has fallen now by 394,000.
    Manufacturing employment decreased by 48,000 in March. 
Motor vehicle manufacturing employment was down by 24,000; this 
decline largely reflected the impact of a strike at an 
automotive parts maker. The resulting parts shortage triggered 
plant shutdowns and idled workers at non-striking motor vehicle 
factories.
    Elsewhere in manufacturing there were job declines in 
several construction-related industries: wood products, 
furniture, and nonmetallic minerals.
     Both manufacturing hours and overtime were up by one-tenth 
of an hour.
    In the service-providing sector, employment services shed 
42,000 jobs in March. This industry group includes temporary 
help services. Over the past 12 months, employment services has 
lost 158,000 jobs, three-quarters of which were in temporary 
help.
    Professional technical services employment was little 
changed for the third consecutive month compared with average 
monthly gains of 27,000 last year.
    Elsewhere in the service-providing sector, employment 
growth continued in health care and in food services. Each 
industry added 23,000 jobs in March.
    In the goods-producing sector, mining employment rose by 
6,000 due to gains in oil and gas extraction and related 
support activities. Average hourly earnings for production and 
non-supervisory workers in the private sector rose by $.05 in 
March and have increased by 3.6 percent over the past 12 
months.
    From February 2007 to February 2008 the Consumer Price 
Index for urban wage earners and clerical workers rose by 4.5 
percent.
    Turning to the labor market data from the survey of 
households, the number of unemployed and the unemployment rate 
both rose over the month. The jobless rate was 5.1 percent in 
March, up from 4.8 percent in February and up from 4.4 percent 
in March of last year.
    Over the month the number of unemployed persons grew by 
434,000 to 7.8 million. The number of unemployed persons who 
were job losers continued to trend up. Job losers represent 54 
percent of all unemployed persons in March, up from 48 percent 
12 months earlier.
    Other groups of unemployed persons include those entering 
the labor market for the first time, those re-entering after an 
absence, and those who voluntarily leave jobs.
    About 1.3 million unemployed individuals had been searching 
for work for 27 weeks or more, little changed from a year 
earlier.
    The number of persons in the labor force increased in 
March, reversing the decline in the prior month. The labor 
force participation rate has been at or near 66 percent since 
last spring. In March, 62.6 percent of the population was 
employed, down from a recent peak of 63.4 percent at the end of 
2006.
    The number of persons working part-time who prefer full-
time employment showed little change over the month but has 
risen by 629,000 over the past 12 months.
    In summary, payroll employment continued to trend down in 
March. Job losses have totaled 232,000 for the first 3 months 
of the year. The unemployment rate rose to 5.1 percent.
    My colleagues and I would now be glad to answer your 
questions.
    [The prepared statement of Commissioner Hall appears in the 
Submissions for the Record on page 18.]
    Mr. Hill. Thank you, Dr. Hall.
    The Chair wants to recognize Senator Brownback for an 
opening statement.

 OPENING STATEMENT OF HON. SAM BROWNBACK, A U.S. SENATOR FROM 
                             KANSAS

    Senator Brownback. Thank you very much, Mr. Chairman, and 
Commissioner and witnesses. I appreciate very much you being 
here. We are all very interested in hearing about recent 
developments in the labor force.
     Today's news that the economy lost 80,000 payroll jobs 
last month and the unemployment rate rose 5.1 percent is 
disappointing to all of us. This is not good news. This is bad 
news.
    We will be working on what we can do to see that that not 
go further in a difficult way. I do want to get some questions 
to you as we get into a time period for questions whenever that 
might be appropriate to be able to ask what--do we see in trend 
lines here in the data that can let us know where this is going 
or what particular areas seem to be the weakest and where do we 
have the potential for strength. Those are the things I'm going 
to be curious about as well.
    Mr. Chairman, thank you for letting me step in here. We had 
two votes on the Senate floor that I had to be at and so I look 
forward to the rest of the presentation and some questions.
    [The prepared statement of Senator Brownback appears in the 
Submissions for the Record on page 19.]
    Mr. Hill. I don't know if your other colleagues wish to 
make any statements or not?
    Mr. Hall. [Nods in the negative.]
    Mr. Hill. Let me ask the first question, Dr. Hall. When was 
the last time we have had three consecutive months of job 
losses?
    Mr. Hall. The last time we had three consecutive months was 
between April and June in 2003 while the U.S. Labor market was 
still recovering from the 2001 recession.
    Mr. Hill. Does 3 months of job losses mean that we're in a 
recession?
    Mr. Hall. I would like to not offer an opinion on that 
primarily because of the role of the Bureau of Labor 
Statistics. Our mission is to produce relevant and accurate and 
objective economic statistics and objective analysis of the 
factors underlying the trends devoid of value judgments, 
assumptions, or opinions.
    So I therefore feel constrained by my position from 
offering an opinion on particularly where the economy is going 
to go from now.
    Mr. Hill. Let me ask it in a different way that may kind of 
let you off the hook. In discussions among yourself and other 
economists, what is the measurement by which most economists 
declare that we are in a recession? Do you know the answer to 
that question?
    Mr. Hall. There is not a really strong rule of thumb. The 
generally accepted group that makes a declaration of a 
recession is a committee within the National Bureau of Economic 
Research, which is a private nonprofit research organization. 
They usually make a determination of a recession.
    I can tell you first that a recession is generally defined 
as a decline in economic activity spreading across the economy 
that lasts for more than just a few months.
    This committee typically, as a result, makes the 
determination retrospectively. So they do it fairly far down 
the line.
    For example, the last two recessions they waited until 
eight straight months of job loss before they declared a 
recession. Other than that, I am not sure there are real strong 
rules of thumb.
    Mr. Hill. Is the labor market in a recession right now?
    Mr. Hall. The real answer to that would be if the labor 
market started to shed jobs, or continued to shed jobs for 
several months. We have had 3 months of that. We will have to 
wait and see where it goes from here.
    I am not sure for example the committee would have an 
opinion yet as to whether the labor market has been in decline 
for long enough for it to be declared a recession.
    Mr. Hill. Again, is there a defined length of time among 
economists who feel like that we can label this labor market in 
a recession?
    Mr. Hall. There really isn't. There really isn't. You know, 
at this point there are lots of people who have an opinion on 
it, and they are quite often right fairly early on, but I don't 
know of a consensus rule of thumb on the labor market.
    Mr. Hill. But would you be willing to offer that these 
statistics that we are hearing today and for the last couple of 
months spell trouble for our economy in this country?
    Mr. Hall. It is certainly a serious concern.
    Mr. Hill. Can you tell us where the job losses began and 
what industries are now seeing employment?.
    Mr. Hall. Sure. The residential construction industry began 
experiencing job losses in early 2006. More broadly, industries 
related to the housing market have been shedding jobs for about 
the past 2 years, declining by nearly 800,000 over that period.
    At the moment now the job losses are appearing broadly. In 
fact, just about every sector--there are exceptions--but just 
about every sector has had a slowdown in job growth and a 
number have actually had job loss at the moment.
    In particular for industries that have not had job losses, 
that still appear pretty strong, it is pretty much health care 
and educational services that remain strong.
    Mr. Hill. So we are increasing jobs in those sectors?
    Mr. Hall. Yes.
    Mr. Hill. What subsectors of the manufacturing industry 
have been hardest hit by the recent job losses?
    Mr. Hall. Very recently it has been automotive, motor 
vehicles. Other than that, I think it is fairly broad in 
manufacturing. Manufacturing is an industry that has not 
actually had job gains. In fact we have not had a significant 
increase in jobs in manufacturing for a decade. So that has 
been an industry that has had long term job loss. What has 
happened recently of course is the job loss has increased.
    Mr. Hill. Well let me ask you, you talk about the 
automobile sector having job losses, does that apply just to 
American-owned companies in the United States? Or are we 
talking about foreign-owned companies that are manufacturing in 
the United States as well?
    Mr. Hall. Yes. I mean our data includes all manufacturing 
in the United States whether it is foreign-owned or domestic-
owned. I do not know the breakout, whether the loss has been 
concentrated or not in particular companies.
    Mr. Hill. OK. Let me give Senator Brownback the opportunity 
to ask a few questions here now as well.
    Senator Brownback. Thanks, Mr. Chairman.
    Thanks for the data and the information. We had Chairman 
Bernanke in earlier this week and he was talking about the 
growth in the export market that was taking place as one of the 
great sides of the economy.
    Do you see any of that reflected in your employment data of 
either strength or less weakness in employment and export-
oriented sectors?
    Mr. Hall. I would say it is really hard for us to match job 
gains or losses in exports directly certainly on a month-to-
month basis, so I really could not say.
    Senator Brownback. You mentioned that the construction 
industry--when you say on month-to-month, do you see any trend 
lines on the export on a broader--on a longer basis on 
employment related to exports broader than a few months?
    Mr. Hall. No, no, I really don't. It is the sort of thing 
where you can do some research and get some idea of what 
export-related employment might be, but it is not something we 
measure directly. So we have really no way of linking 
particular jobs to exports.
    For example companies that export quite often will sell 
some domestically and some abroad, and it is very hard to 
separate it out.
    Senator Brownback. I have been touring a number of places 
in my state and manufacturing industries had experienced a 
significant fall off of employment over the past several years 
but have been experiencing some strength recently with the 
declining value of the dollar. I didn't know if that is 
happening across the country?
    Mr. Hall. Well I guess I am saying it may be, but I am not 
aware of a trend in export-related employment.
    Senator Brownback. The overall unemployment rate rose to 
5.1 percent. Where was that rate a year ago? Where were we at a 
year ago? Do you recall? Do you have that in any of your data?
    Mr. Hall. Yes I think I had it--Yes, 4.4 percent.
    Senator Brownback. OK and so has it steadily risen during 
that period of time? Or did we see a major jump up in this 
first quarter of this year? What are you seeing on the numbers?
    Mr. Hall. Well we have seen some month-to-month variation, 
but if you look at say quarterly averages of the unemployment 
rate, in the first half of the year the unemployment rate was--
of last year, I am sorry--the unemployment rate was about 4.5 
percent. Then in the third quarter it went 4.7. In the fourth 
quarter it went 4.8. And now this quarter it is 4.9. So it has 
been steady.
    Senator Brownback. So there has been a steady deterioration 
since about the middle of last year?
    Mr. Hall. That's correct.
    Senator Brownback. So would we ascertain from that that the 
economic slowdown started roughly the middle of last year? Or 
you do not draw that kind of conclusions from this data?
    Mr. Hall. Well I would certainly say the labor market 
weakness started over a year ago.
    Senator Brownback. You were hesitant to use the word 
``recession,'' but would you say we are in a recession relative 
to unemployment rates?
    Mr. Hall. I would not want to make that judgment. You know 
again because if--the important thing about a recession is that 
it lasts for longer than just a few months.
    Senator Brownback. Well the definition is two quarters of 
negative growth is what I have always understood the kind of 
classic definition of a recession is.
    Mr. Hall. Yes. That was a rule of--that has been sort of a 
rule of thumb. That rule of thumb actually was broken the last 
recession. We never did have two consecutive quarters of 
decline.
    I can tell you that the Business Cycle Dating Committee of 
the National Bureau of Economic Research, the ones that are 
actually--have as closest to an official declaration of a 
recession--they look at a lot of things. They cite particularly 
the labor market and personal income and industrial production 
as really important data that they look at in declaring a 
recession.
    Senator Brownback. Now Chairman Bernanke talks about slow 
performance late last year, you know, the signs of a recession 
this year--I think he carefully tries to choose his words--but 
then looking at an upward growth in the economy in the second 
half of this year.
    Do you do any soliciting of groups that you survey to see 
if they have employment projections or what they are 
anticipating to do looking down the next quarter, two quarters?
    Mr. Hall. No, we do not, and the real reason is that we are 
too close to the data. We are the ones who produce the 
employment data, and we want to give every appearance and every 
reason for people to trust us that we are just reporting the 
facts. So we stay away from trying to project data in any way.
    The exception would be we do do some projections on long 
term, 10-year projections on occupations, but that is not 
really related to the business cycle.
    Senator Brownback. OK. And the biggest falloff in 
employment has been the construction industry?
    Mr. Hall. That is the one that has been declining the 
longest. And this month that was the biggest decline.
    Senator Brownback. What of the 80,000 job loss was 
associated with the construction industry?
    Mr. Hall. I think it was about to fifty, was it fifty-four? 
Fifty-one thousand.
    Senator Brownback. Oh boy. So you are looking at well over 
60 percent of the job loss is in the one industry alone, 
construction?
    Mr. Hill. Yes, but there were several other industries that 
also had job losses that were made up by job gains in other 
industries.
    For example, as I mentioned, education and health care had 
strong job growth. So there were other industries that had job 
losses that outweighed the increase in say health care and 
education.
    Senator Brownback. What were the other major ones?
    Mr. Hall. Well manufacturing this month was the second-
biggest decline.
    Senator Brownback. With how many job losses there?.
    Mr. Hall. I'm sorry, I should remember this. I just looked 
at it--a 48,000 job loss.
     Senator Brownback. OK and what is behind them? What is the 
next one behind it?
    Mr. Hall. Let me grab my data here really quickly. 
Professional business--professional and business services lost 
35,000 jobs.
    Senator Brownback. What is in that category? What is the 
big one in that category?
    Mr. Hall. That includes employment services and temporary 
help. That particular sector in particular lost a number of 
jobs.
    Senator Brownback. So that is telling us that companies are 
not putting on temps? Is that what you are saying to us?
    Mr. Hall. Yes.
    Senator Brownback. And that--I mean it seems to me that 
that would be one of the first moves the company would make. 
The first thing would be well we are not going to hire any 
temps this month.
    Mr. Hill. Yes, that is part of why I think that is an 
important thing to note, that that is a concern.
    Senator Brownback. So if you took construction and 
manufacturing together, what percentage of the job loss--was it 
well over 100 percent?
    Mr. Hall. Right.
    Senator Brownback. I mean if we are just looking at those 
numbers because it was offset by gains in education and health 
services?
    Mr. Hall. Correct.
    Senator Brownback. Those are the--the big losing areas are 
construction and manufacturing?
    Mr. Hall. Yes.
    Senator Brownback. And you don't provide any more granular 
data on manufacturing as to which sectors in manufacturing?
    Mr. Hall. Well we have a split-out between durable and 
nondurable goods, for example.
    Senator Brownback. The reason I am asking this is, you know 
obviously we are looking at a number of policy issues up here 
for what we can do to try to stimulate the growth, and I think 
everybody's key focus has been on the housing market and what 
we can do to stimulate the housing market, which would 
certainly be supported by your data. And then some people are--
well I--certainly saying we cannot raise taxes in this 
environment because that is going to hurt the economy when it 
is clearly in difficulty.
    So whether it is in durable or nondurable may really tell 
us something about the consumer nature of this.
    Mr. Hall. Well we do have it split out where we have been 
breaking out housing-related industries. So we collect all the 
industries that are related to the housing market.
    The housing-related industries together lost about 68,000 
jobs this month.
    Senator Brownback. 68,000 in all housing-related. So that 
would include your durable goods that you put into a house? Is 
that what you're telling me?
    Mr. Hall. Yes, and it would include some services as well. 
It is everything from furniture to real estate services, to 
things like----
    Senator Brownback. So that fall-off in the housing market 
is a key piece of this data. That is the big piece of this 
data?
    Mr. Hall. Yes. But I would say though that the weakness is 
much broader than that. There is weakness well beyond just the 
housing-related industries. And there is now some job loss in 
industries that have nothing to do with housing.
    Mr. Hill. Let me interject here for just for a minute, if--
--
    Senator Brownback. I'm sorry, I thank you for letting me 
question----
    Mr. Hill. No--and if you have more questions feel free to 
ask them.
    But I want to make sure this math adds up here. We lost 
80,000 jobs in March, correct?
    Mr. Hall. Yes.
    Mr. Hill. But you mentioned that we lost 51,000 in 
construction jobs in March?
    Mr. Hall. Yes.
    Mr. Hill. And 48,000 in manufacturing?
    Mr. Hall. Yes.
    Mr. Hill. And 35,000 in ``others''?
    Mr. Hall. Yes.
    Mr. Hill. That adds up to 134,000 jobs.
    Mr. Hall. Right. Now there is little overlap, for example, 
because some of the manufacturing is related to housing. And 
then, you know, we had some industries with job gains. So on 
net it came out to be a negative 80,000.
    Mr. Hill. OK, how many jobs in the health and education 
field were gained?
    Mr. Hall. 42,000 jobs.
    Mr. Hill. 42,000 new jobs were gained?
    Mr. Hall. Yes.
    Mr. Hill. OK, that answers my question then.
    Senator, feel free to ask more questions.
    Senator Brownback. Thank you for letting me do this, and 
thank you for participating with me on this. I mean this really 
helps to try to figure what we ought to be targeting with this.
    On the manufacturing side of the job loss, is this part of 
a long-term trend? Or is this part of, if you take out the 
housing market on this and the durable-good manufacturing, 
which I don't know if you do split that out that way, but is 
this just a continuation of a long-term trend? Or is this a 
part of the weakness in the economy?
    Mr. Hall. It looks to me like it is part of the weakness in 
the economy. The long-term trend has been for manufacturing to 
shed a few jobs, but the job loss in manufacturing has 
accelerated as the general labor market weakness has increased.
    Senator Brownback. OK, and it is primarily in durable goods 
in manufacturing? Or what is the breakout on that?
    Mr. Hall. OK. Well, for example, just this month about 
35,000 in durable goods, about 24,000 of that was in motor 
vehicles and parts. And in nondurable goods, it is about 
13,000.
    Senator Brownback. 13,000 in nondurable?
    Mr. Hall. Right.
    Senator Brownback. And what is it in automotive, 28,000?
    Mr. Hall. About 24,000.
    Senator Brownback. 24,000 of the 34,000 in durable?
    Mr. Hall. Yes.
    Senator Brownback. OK, so we have got a real weakness in 
the automotive sector continuing there? Correct?
    Mr. Hall. Correct.
    Senator Brownback. And that is showing up. And then what is 
the big piece in the nondurable?
    Mr. Hall. To be honest, it is pretty broad. Everything from 
food manufacturing, textile mills, apparel, petroleum and coal 
products, plastic and rubber products, those all lost jobs 
within the nondurable goods sector.
    Senator Brownback. Any thought as to why on those?
    Mr. Hall. I don't, but it is certainly consistent with just 
the general weakening in the economy.
    Senator Brownback. That people are just spending less 
money?
    Mr. Hall. Yes.
    Senator Brownback. So that the stimulus package which put 
forward toward consumers is one we would hope would go at that 
particular sector?
    Mr. Hall. Exactly. Yes. And actually it would hopefully 
affect everything.
    Senator Brownback. What about the financial activities 
sector? Because, you know, we had the big Bear Stearns bailout 
and the problems there. Are we seeing substantial job losses in 
that category?
    Mr. Hall. Yes, the financial activities sector lost about 
5,000 jobs. It is actually a bit weaker than that in the sense 
that that is normally a sector that has pretty solid job 
growth. So has weakened to the point where I guess we lost 
5,000 jobs this month.
    Senator Brownback. So that one is more alarming than the 
number might portend because it has been a growth sector?
    Mr. Hall. Yes.
    Senator Brownback. OK. All right, thank you for breaking 
that out.
    Any thoughts on policy issues that are helpful or harmful? 
I think everybody here wants to see what we can do that would 
be helpful, particularly in the job creation and sustaining 
roll.
    Mr. Hall. I am afraid I am constrained by my job since the 
Bureau produces the data and we want to remain objective and 
just let the data speak for itself as much as possible. So I 
want to steer clear of talking about policy issues.
    Senator Brownback. A wise man.
    Thank you, Mr. Chairman.
    Mr. Hill. Thank you, Senator.
    Dr. Hall, we appreciate your testimony. Senator Brownback 
pointed to the fact that the unemployment rate rose 5.1 percent 
last month, and your testimony in answer to his question was 
that this was not a spike but more of a trend upwards.
    Yesterday, the Department of Labor reported that last week 
applications for unemployment benefits rose above 400,000. 
Before this, we are learning that those who have applied for 
unemployment insurance have had their unemployment insurance 
expire because they have been out of a job for longer that what 
the law allows.
    I know we do not like to define whether or not--with these 
statistics whether or not we are in a recession, but many 
economists consider this 400,000 mark as an indication that the 
labor market is in a recession.
    Your comments?
    Mr. Hall. In particular that data is a weekly series so it 
is highly volatile. It has got value, but to some degree it is 
sort of trumped I think by the payroll data. Once we report the 
payroll data like we are today, you have got sort of the same 
information that you got from the unemployment insurance 
claims.
    Now to the degree this may imply something about next 
month's employment report, I don't know.
    Mr. Hill. What share of the U.S. population has a job right 
now?
    Mr. Hall. I have to look that one up. About 62.6 percent.
    Mr. Hill. OK, and how long has it been since the share of 
Americans with a job was this low?
    [Pause.]
    Mr. Hall. I'm sorry but it will take me a minute to dig 
that out.
    Mr. Hill. OK.
    Mr. Hall. Since March of 2005.
    Mr. Hill. March of 2005.
    Senator Brownback in his remarks commented that we are 
trying to figure out what we should be doing from our end in 
order to stem the tide of all these negative statistics. Some 
have argued that we need to pass legislation to extend benefits 
to the long-term unemployed because the unemployment rate 
remains relatively low.
    In the recessions of the early 1990s and early 2000, the 
unemployment rate was at 7 percent and 5.7 percent, 
respectively. It was at that time that Congress extended 
unemployment insurance benefits higher than it is today. As a 
matter of policy do you have any comment as to whether this is 
a wise approach that we should be looking at?
    Mr. Hall. I think I am going to give a similar answer to 
what I did a minute ago. Since the Bureau of Labor Statistics 
is producing this data and we want to keep our reputation as 
being objective reporters of data, I am going to try not to 
give an opinion on policy issues.
    Mr. Hill. You are good at not being pinned down, Dr. Hall.
    Let me switch gears here a bit. The dollar is very low 
right now. It seems to me that because the dollar is low that 
exports ought to be going up. Are exports going up in this 
country?
    Mr. Hall. We do not produce the export data but I think 
export growth has been fairly strong for a period, but I don't 
have that data right in front of me.
    Mr. Hill. Do you have any data showing what kind of 
employment rate is tied to exports?
    Mr. Hall. No, we do not.
    Mr. Hill. OK. My understanding is that wage growth should 
be tied to the productivity of workers. Is it correct that 
output per hour in the nonfarm business sector has grown at a 
1.9 percent average annual rate, but the real hourly 
compensation, pay-plus-benefits, of workers producing that 
output actually decreased 0.5 percent in the fourth quarter of 
2007? Looking at this graph to my left, you can see that real 
earnings have dropped over the last several months.
    Your comments?
    Mr. Hall. Well those figures that you just quoted are 
correct. Would you like me to talk about productivity and wage 
growth a little bit? Is that what----
    Mr. Hill. Yes, please.
    Mr. Hall. Oh, sure. Historically there has been a pretty 
good link between productivity growth and real wage growth, in 
particular productivity growth and real hourly compensation, 
labor compensation which includes both wages and non-wage 
benefits. The numbers that you cite show that the gap between 
labor productivity and real compensation growth is actually 
wider than it usually is.
    Now it is not unusual for this gap to get wide after a 
recession as part of the business cycle, but usually by this 
point that gap has closed. And this time it is not yet closed.
    Mr. Hill. Is this a trend? And if it is, does this trend 
tell us anything about the state of the economy?
    Mr. Hall. Well obviously I don't know what the trend is 
going to be like going forward. And, to be honest, I do not 
know what this is going to tell us about the economy if this 
gap does not close.
    All I can tell you is that this gap has always closed 
pretty much between 1973 and say 2001. The gap has been pretty 
constant at a fairly narrow rate of something like a half a 
percentage point.
    Mr. Hill. Since when did you say?
    Mr. Hall. Since 1973 to 2001.
    Mr. Hill. OK. Employers labor costs include not only wages 
and salaries but also benefits. When labor costs rise to 
increases in health insurance, how does that affect your 
measures of employee compensation?
    Mr. Hall. Well we do have measures of employee compensation 
that include health insurance costs when the health insurance 
is provided by employers. So when the health-insurance costs go 
up, compensation does go up by our compensation measures.
    Mr. Hill. OK, we are getting near the end of the questions 
that I have. I would invite Senator Brownback, if he has any 
further questions, before I end up this committee meeting to 
ask his questions.
    Senator Brownback. Thank you, Mr. Chairman, and thank you 
for allowing me to ask so many.
    I find this real interesting. In part of your report you 
are saying the duration of unemployment has shortened at this 
point in time from what it was a year ago. Is that correct?
    Mr. Hall. Let me scramble for just a second and get the 
data here.
    Senator Brownback. You are saying that the duration, the 
mean, the average duration of unemployment decreased in March 
of 2008 to 16.2 weeks from 16.8 weeks in the preceding month, 
and a year ago it was 17.2 weeks.
    Mr. Hall. I am sure that is correct. I just want to find 
the data.
    Senator Brownback. Well it just kind of jumped out at me 
because I had thought that would have gone differently but it 
would have a bearing on whether or not to extend unemployment 
benefits.
    Mr. Hall. Yes. I think the thing that is probably 
indicating is that when job loss--when we start to lose jobs 
the duration goes down because you have newly unemployed 
people.
    Senator Brownback. Ah, thank you. OK, so that that is a 
reflection of the bigger number of unemployment taking place, 
rather than that people are unemployed for a less period of 
time.
    Mr. Hall. Correct.
    Senator Brownback. All right. Thank you for explaining that 
because I looked at that and it seemed odd to me.
    Thank you, very much.
    Thank you, Mr. Chairman.
    Mr. Hill. Thank you, Senator.
    Consumer spending has remained stagnant in February. It was 
0.1 percent in January. In your view does this trend portend 
for the labor market--in your view, what does this trend 
portend for the labor market in the months to come?
    Mr. Hall. Well I kind of want to stay out of the business 
of forecasting the labor market. Again, because we produce the 
data I do not want to sort of try to guess what the data is 
going to be.
    Mr. Hill. But there is a connection between consumer 
spending and this trend, right?
    Mr. Hall. Oh, absolutely. Absolutely. And consumer spending 
actually has been weakening, and I think that has been part of 
this broader weakening in the labor market, is because consumer 
spending is going down. That's sort of why we are probably 
seeing the job loss or job weakness extending beyond just 
housing-related industries.
    Mr. Hill. I know of your reluctance to define whether or 
not we are in a recession, but if at some point that we declare 
that we are in a recession, how long does it take for 
employment to recover to its pre-recession peak?
    Mr. Hall. The last four recessions, the average time was 
about 20 months. The most recent recession was unusually long. 
That took 39 months.
    Mr. Hill. And how long do wages and other compensations 
take to recover?
    Mr. Hall. Well in terms of the level, the level of wages is 
very quick. Because wage growth does not pause very much. That 
is only maybe a couple of quarters. But in terms of--not in 
terms of levels but in terms of growth of wages, in the last 
couple of recessions wage growth rates have never recovered 
actually.
    Mr. Hill. OK. So based upon your analysis of today's 
report, I know you were not willing to say that we are in a 
recession, but does it appear that we may be in a difficult 
period for the labor market in the months to come?
    Mr. Hall. I will say, I hope not.
    Mr. Hill. You hope not?
    Mr. Hall. Yes.
    Mr. Hill. And that is all you will add?
    Mr. Hall. Again, I do not want to forecast what our future 
data may look like.
    Mr. Hill. I want to take a step back to the long-term 
unemployed. The number of long-term unemployed is still higher 
than it was at the beginning of the last recession. Is that 
correct?
    Mr. Hall. That is correct.
    Mr. Hill. OK. So, Dr. Hall, and your colleagues, we thank 
you very much for coming here this morning. Obviously the 
numbers that you have reported here today are not good, but we 
must as Members of Congress face the reality that this economy 
is sputtering along.
    If you are unwilling to define it as a recession, I think 
it is fair to say that this economy is in trouble. Would you be 
willing to say that?
    Mr. Hall. I would say that the labor market is certainly 
weaker than we would like to see it, and it has certainly been 
weakening.
    Mr. Hill. Well, there are people suffering out there. I 
mean, we deal with these statistics but the statistics are 
statistics of real people and real pain out there among people 
who are struggling to make a living. Not only are they losing 
their jobs, but they are paying over $3 a gallon for gasoline. 
Their health-care costs are going up. In my state, property 
taxes have been going up dramatically, and I believe that we 
should recognize that people are suffering out there and that 
the Congress needs to respond to try to provide some relief.
    So with that said, let me thank you all for appearing here 
this morning. We appreciate your willingness to come, and we 
thank you for the data that you have provided to us this 
morning.
    Mr. Hall. Thank you.
    Mr. Hill. This committee is adjourned.
    [Whereupon, at 10:18 a.m., Friday, April 4, 2008, the 
hearing was adjourned.]

                       Submissions for the Record

=======================================================================

[GRAPHIC] [TIFF OMITTED] T2946.002

            Prepared Statement of Senator Schumer, Chairman
         schumer: today's jobs report is a shot across the bow
Joint Economic Committee Holds Hearing with BLS Chairman on Employment 
        Picture Showing 80,000 Jobs Lost in March and 232,000 in 2008

    Today, the Bureau of Labor Statistics (BLS) released the monthly 
jobs report that showed a loss of 80,000 jobs in March and 232,000 jobs 
lost over the last three months. Sen. Charles E. Schumer, the Chairman 
of the Joint Economic Committee (JEC), released a statement on these 
bleak numbers and their impact on our economy. The JEC convened a 
hearing on the employment situation this morning with the BLS 
Commissioner, Keith Hall, chaired by Rep. Baron Hill (D-IN).
Sen. Schumer's statement follows:
    ``Today's jobs report is a shot across the bow for the 
administration that has not acted in the face of serious economic 
troubles. Even with falling home prices, rising foreclosures, job 
losses, and no economic growth, we have an administration that refuses, 
in a Hoover-like way, to take off its ideological handcuffs and help 
the economy. It's no surprise that nearly 80% of Americans are 
pessimistic about the direction of our country right now.''
    ``And the Bush administration continues to be a day late and a 
dollar short in responding to the economic realities we are facing. The 
President is traveling abroad this week, but in reality he's been on a 
year-long vacation from the country's economic problems. President Bush 
is literally and figuratively in Bucharest.''
    ``Today's job report is alarming and much weaker than expected. We 
lost 80,000 jobs in March--the third straight month of losses--the 
first time in 5 years we've experienced such a string of job loss.''
    ``As if the March news wasn't bad enough, we have also learned 
today that job losses for January and February were worse than 
reported. We now know that 60,000 more jobs were lost than the 
government data showed last month.''
    ``Chairman Bernanke was here on Wednesday and he came as close to 
saying that we're in a recession as he has so far. He walked up to the 
door, knocked on it, and someone opened it--but he didn't walk in. It 
crystal clear to Americans that we're in a recession. The report of 
80,000 jobs lost in March, and 232,000 jobs lost so far this year, is 
an elephant in their living rooms.''
The Joint Economic Committee, established under the Employment Act of 
        1946, was created by Congress to review economic conditions and 
        to analyze the effectiveness of economic policy.

                           www.jec.senate.gov

                                  ###

                               __________
           Prepared Statement of Representative Baron P. Hill

    Good morning. I am honored that Chairman Schumer and Vice Chair 
Maloney have asked me to preside today.
    I want to welcome Commissioner Hall and thank him for testifying 
here today on the March employment situation.
    I have a vested interest in these numbers as I have seen first hand 
how the recent economic downturns have affected my constituents. In 
Bloomington, Indiana, the GE refrigerator plant announced in February 
that it will close by the end of 2009. This will result in a loss of 
900 jobs for the area. Job losses like this are occurring throughout 
the country, as today's employment numbers highlight.
    The labor market news keeps getting worse and today's report is no 
exception. The unemployment rate jumped to 5.1 percent in March and 
nonfarm payroll employment fell 80,000 jobs. March marks the third 
consecutive month of jobs losses, for a total of 232,000 jobs lost in 
the first quarter of this year. We haven't seen job losses like this 
for nearly five years.
    On Wednesday, Federal Reserve Chairman Ben Bernanke told this 
committee that a recession is possible. Yesterday brought news that 
weekly unemployment benefit claims rose above 400,000, a level that 
typically signals that the labor market is already in recession. 
Indeed, the Federal Reserve and many private sector economists expect 
unemployment to climb throughout the year.
    We seem to be a long way away from a healthy economy--which usually 
adds about 150,000 to 200,000 jobs each month--since the economy has 
lost 77,000 per month on average in the first quarter of this year. The 
widespread job losses we are seeing are a clear indication to me that 
the economy is in trouble.
    For nearly two years now, the manufacturing industry has shrunk and 
since the beginning of 2006, motor vehicles and parts manufacturing 
alone has lost 172 thousand jobs. These trends adversely affect my 
state's economy, as Indiana has a high proportion of manufacturing jobs 
compared to the rest of the country. In Indiana we have seen an average 
unemployment period of 9 weeks. And, as of the fourth quarter of 2007, 
40 percent of unemployed Hoosiers have now exhausted their unemployment 
benefits, the eleventh highest rate in the nation.
    Congress should consider a proposal to provide an extension of 
unemployment benefits that would last an additional 13 weeks for those 
who have exhausted their regular six month benefits while looking for a 
new job. Workers who could receive these benefits are those who have 
lost their job through no fault of their own--they have the bad luck of 
working for a business that must lay off workers or close it doors due 
to the weakening economy, like the workers in the Bloomington GE plant. 
Extending unemployment benefits to struggling workers should be a high 
priority.
    Wages are not keeping up with the rising cost-of-living. Sky-high 
gas prices and rising healthcare costs add to the pinch for families. 
These elements have combined to create the lowest consumer outlook for 
the economy in 35 years.
    I want to thank Mr. Hall and his colleagues for being here to 
discuss today's labor statistics, and I look forward to the continued 
focus on labor market conditions by this Committee.
                               __________
    Prepared Statement of Keith Hall, Commissioner, Bureau of Labor 
                               Statistics

    Mr. Chairman and Members of the Committee:
    Thank you for this opportunity to discuss the March labor market 
data we released this morning.
    Nonfarm payroll employment continued to trend down in March, and 
the unemployment rate rose from 4.8 to 5.1 percent. Payroll employment 
edged down by 80,000 over the month, bringing the decline over the last 
3 months to 232,000. To put these recent changes into context, I would 
note that labor market conditions started to weaken more than a year 
ago. Average monthly job growth slowed from 175,000 in 2006 to 107,000 
in the first half of 2007, to 76,000 in the last half of 2007, and to -
77,000 for the first quarter of this year. The unemployment rate 
remained at or near 4.5 percent during the first half of 2007 but rose 
to 4.7 percent in the third quarter, 4.8 percent in the fourth quarter, 
and 4.9 percent in the first quarter of this year.
    Returning to the payroll employment figures for March, job losses 
occurred in construction, manufacturing, and employment services. Job 
growth continued in health care, food services, and mining.
    The construction industry lost 51,000 jobs over the month, with 
declines concentrated in residential and nonresidential specialty trade 
contracting. Since its peak in September 2006, construction employment 
has fallen by 394,000.
    Manufacturing employment decreased by 48,000 in March. Motor 
vehicle manufacturing employment was down by 24,000; this decline 
largely reflected the impact of a strike at an automotive parts maker. 
The resulting parts shortage triggered plant shutdowns and idled 
workers at non-striking motor vehicle factories. Elsewhere in 
manufacturing, there were job declines in several construction-related 
industries--wood products, furniture, and nonmetallic minerals. Both 
manufacturing hours and overtime were up by one-tenth of an hour.
    In the service-providing sector, employment services shed 42,000 
jobs in March. This industry group includes temporary help services. 
Over the past 12 months, employment services has lost 158,000 jobs, 
three-fourths of which were in temporary help. Professional and 
technical services employment was little changed for the third 
consecutive month, compared with average monthly job gains of 27,000 in 
2007.
    Elsewhere in the service-providing sector, employment growth 
continued in health care and in food services; each industry added 
23,000 jobs in March. In the goods-producing sector, mining employment 
rose by 6,000 due to gains in oil and gas extraction and related 
support activities.
    Average hourly earnings for production and nonsupervisory workers 
in the private sector rose by 5 cents in March and have increased by 
3.6 percent over the past 12 months. From February 2007 to February 
2008, the Consumer Price Index for Urban Wage Earners and Clerical 
Workers (CPI-W) rose by 4.5 percent.
    Turning to labor market data from the survey of households, the 
number of unemployed and the unemployment rate both rose over the 
month. The jobless rate was 5.1 percent in March, up from 4.8 percent 
in February and from 4.4 percent in March of last year. Over the month, 
the number of unemployed persons grew by 434,000 to 7.8 million. The 
number of unemployed persons who were job losers continued to trend up. 
Job losers represented 54 percent of all unemployed persons in March, 
up from 48 percent 12 months earlier. (Other groups of unemployed 
persons include those entering the labor market for the first time, 
those re-entering after an absence, and those who voluntarily leave 
jobs.) About 1.3 million unemployed individuals had been searching for 
work for 27 weeks or more, little changed from a year earlier.
    The number of persons in the labor force increased in March, 
reversing a decline in the prior month. The labor force participation 
rate has been at or near 66.0 percent since last spring. In March, 62.6 
percent of the population was employed, down from a recent peak of 63.4 
percent at the end of 2006. The number of persons working part time who 
prefer full-time employment showed little change over the month but has 
risen by 629,000 over the past 12 months.
    In summary, payroll employment continued to trend down in March, 
and job losses have totaled 232,000 for the first 3 months of the year. 
The unemployment rate rose to 5.1 percent.
    My colleagues and I now would be glad to answer your questions.
                               __________
                               [GRAPHIC] [TIFF OMITTED] T2946.001
                               
              Prepared Statement of Senator Sam Brownback

    Thank you, Representative Hill, and thank you Commissioner Hall for 
appearing before this committee. We are all very interested in hearing 
about recent developments in our Nation's labor markets.
    Today's news that the economy lost 80,000 payroll jobs last month 
and that the unemployment rate rose to 5.1% is disappointing all of us. 
However, the unemployment rate does remain low by historical standards.
    I will be interested to hear the degree to which job losses remain 
confined primarily to the manufacturing and construction sectors or if 
weakness has spread to other sectors as well.
    We often hear from the other side of the aisle that, somehow, the 
administration's policies are responsible for low growth in inflation-
adjusted wages, high unemployment rates in some sectors of the labor 
markets, and anemic economic growth. Somehow, the administration's 
policies simply favor the rich, or look out for Wall Street, instead of 
Main Street. I have yet to hear from the other side, however, precisely 
what those policies are that are responsible for some of the slowdown 
in economic activity that we are currently observing. Is it low taxes 
that lead to slower economic activity or the discrepancy between 
productivity growth and wage growth? Is that the policy that is 
responsible for the economic slowdown?
    You might even think, given budget proposals from the other side of 
the aisle, that allowing current tax policy to expire--which is the 
same thing as increasing taxes without taking votes--will help 
stimulate out economy. I wonder what set of economic principles lead 
those on the other side of the aisle to believe that the higher taxes 
and bigger government that they seek will give rise to more prosperity 
in the private sector. To the contrary, I believe that if we allow pro-
growth tax policies that we instituted in 2001 and 2003 to continue, 
then we will allow the American people to keep more of their hard-
earned income to use to provide for their families.
    The economic lessons that I learned in school suggest that if we 
keep taxes low, and we work toward a leaner and more efficient 
government, then people have the proper incentives to work hard for 
their families because they can keep their hard earned income, choose 
how to use it for their families well being, and not have to send money 
to fund inefficient government spending.
    I am anxious to hear about the status of our Nation's labor markets 
and look forward to Commissioner Hall's testimony.

  

                                  
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