Tax Cuts Lead to Job Gains
December 9, 2003
The economy is not only adding jobs, but will gain millions more in the years ahead, says Labor Secretary Elaine Chao.
- November's unemployment rate fell to 5.9 percent and the economy gained 57,000 jobs, according to the Bureau of Labor Statistics' payroll survey, which looks at data from 400,000 firms.
- This represents four straight months of job growth totaling 328,000 jobs -- the most robust four-month record in three years.
- The Bureau of Labor Statistics' survey of 60,000 households showed an even greater gain, of 589,000 employed workers last month.
- This survey recorded a four-month gain of 1.1 million employed workers and shows that total employment today is now higher than at the start of the recession.
In each phase of our country's economic history, says Chao, different growth industries have led the way. This decade's prospective job-growth leaders include biotechnology, which is forecast to add 3 million jobs; health services, which is forecast to add 1.3 million jobs; and high-tech manufacturing, which is projected to grow by more than 800,000 jobs.
Why has the economy rebounded? Chao cites research by economists William Gentry and R. Glenn Hubbard of Columbia University and Kevin Hassett of the American Enterprise Institute that demonstrates that businesses respond to lower taxes by investing more and employing more workers. The lower rate of taxation on capital due to President Bush's tax cuts has contributed to an increase in the rate of nonresidential business investment, which surged at an annual rate of 14 percent in the third quarter.
Source: Elaine Chao, "Where the Workers Are," Commentary, Wall Street Journal, December 9, 2003.
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