June 4, 2004

With growth of 4.4% in the first quarter of 2004, America's economy is continuing to perform well above the historical average. At 5% over the past year as a whole, annual economic growth has been the fastest in nearly 20 years.

Employment is also growing strongly. Last month 248,000 jobs were created nationwide. The economy has posted steady job gains for each of the last nine months, with over 1.4 million new jobs having been added since August, and nearly one million new jobs in the last three months alone.

Since last June the national unemployment rate has dropped from 6.3% to 5.6%, which is below the decade averages in the 1970s (6.2%), 1980s (7.3%) and 1990s (5.8%).

The release of the latest national figures follows the U.S. Bureau of Labor Statistics' May 21 announcement that Wisconsin's economy added 14,100 payroll jobs in April. We now have 33,400 more payroll jobs than a year ago, and our state unemployment rate has dropped from 5.7% a year ago to 4.6% now.

Some will insist that these new jobs are mostly "flipping hamburgers," but in fact, virtually every major sector of the economy added jobs in May, from retailing to construction industries. Especially encouraging are the 32,000 new hires in manufacturing.

America's standard of living is on the rise with after-tax incomes up by 11% since December 2000. Partially as a result, in the first quarter of this year the national homeownership rate reached a record high of 68.8%, beating the record set the previous quarter.

Productivity (the amount produced per hour worked) grew from 2000 to 2003 at the fastest three-year rate in more than 50 years, and continues to grow, bolstering profits and leading to significantly higher real wages for workers over time.

We have heard a lot recently about the outsourcing of jobs to foreign countries with cheaper labor, but rising productivity is the key to keeping us competitive. As one worker recently told me, "I don't care if machines do the jobs I used to do, just so long as I get to maintain the machines."

America offers a lot of advantages to employers: a predictable legal system, modern transportation and communications and a well-educated workforce, just to name a few. Change and dislocation can be very painful, but we have every reason to expect to have plenty of increasingly-productive machines that need to be maintained, and plenty of well-paying services that need to be provided, both within and outside the manufacturing sector.

The catch, of course, is that modern factories and modern services require workers to continuously upgrade their skills. That's why, as Vice Chairman of the Committee on Education and the Workforce, I've worked so hard on the Workforce Reinvestment and Adult Education Act which will improve vocational education and employment programs. I've just been appointed to serve on the conference committee which will work out the differences between the versions of this bill passed by the House and Senate.

And since efficient transportation is necessary to stay competitive, I'm pleased that, as Chairman of the Highways, Transit and Pipelines Subcommittee, I've also just been appointed to the conference committee that will negotiate the differences between the House and Senate versions of the latest major highway and transit bill.