With the decline of our state's manufacturing base and loss of thousands of jobs over the last several years, Michigan is often portrayed as an island of economic malaise in a nation of prosperity.

It ain't necessarily so.

President Bush has talked up the nation's economy as growing and healthy, but less than two months before the general election - which will determine whether Republicans lose their stranglehold on Congress - polling shows that voters are not giving the GOP credit for the economy.

The reasons: rising health care costs are eating away at family budgets. Workers' wage increases are not keeping up with inflation. The record federal deficit continues to rise. So does America's debt to other nations. The war in Iraq is draining the federal treasury. Republican leadership seems more intent on focusing on their perceived political strength - keeping the nation safe - than on domestic issues like taxes, federal spending and immigration reform.

And when Republicans do focus on domestic issues, they have so far shown a tin ear to the AFL-CIO's drumbeat that "America needs a raise." This summer Republicans finally came up with a plan to increase the minimum wage (it hasn't been hiked since 1997), but it was killed off when they tied it to a plan to eliminate the estate tax, which affects only the very richest Americans.

Those factors dominated news coverage this year during the period around Labor Day, which usually brings a deluge of media information about how the American workforce is faring and the state of the U.S. economy. A sampling of news reports and studies indicates that while Michigan has its problems, middle class workers in much of the rest of the nation are also wondering why the supposedly rising economy hasn't lifted their boat, too.

*From The New York Times (Aug. 29). "With the economy beginning to slow, the current expansion has a chance to become the first sustained period of economic growth since World War II that fails to offer a prolonged increase in real wages for most workers.

"That situation is adding to fears among Republicans that the economy will hurt vulnerable incumbents in this year's midterm elections even though overall growth has been healthy for much of the last five years.

"The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity - the amount that an average worker produces in an hour and the basic wellspring of a nation's living standards - has risen steadily over the same period.

"Until the last year, stagnating wages were somewhat offset by the rising value of benefits, especially health insurance, which caused overall compensation for most Americans to continue increasing. Since last summer, however, the value of workers' benefits has also failed to keep pace with inflation, according to government data."

*USA Today, (Aug. 30, 2006): "After-tax corporate profits rose 19.5% in the second quarter from the same time a year ago, the Commerce Department said. That follows a 21% gain in the first quarter. Corporate profits as a percentage of total U.S. economic activity was the highest in four decades."

*From the labor-backed Economic Policy Institute and its annual "State of Working America" report (September 2006).

"The five-year-old economic expansion that began in late 2001 has posted some impressive results, most notably faster productivity growth. Yet, real income is lower for the typical family than in 2000, while the incomes of the best-off families have grown rapidly.

"These highly unbalanced economic outcomes present a stark contrast to the latter 1990s, when wages and incomes of low-wage and middle-wage workers grew in much closer step with rising productivity, the measure of goods and services produced per hour worked."

The current economy, the EPI report said, is "centered around a seeming contradiction. On the one hand, the economy is frequently characterized as robust in terms of big-picture indicators such as the gross domestic product. On the other hand, the wages and incomes that shape most Americans' living standards continue to fall behind expectations."

*From the Wall Street Journal (Sept. 5), regarding the GOP's fall agenda: "Down in the polls and divided internally, Republicans want to block debate on domestic policy and shift attention to national security issues that command more party unity.

"But this means almost no further progress on domestic issues."

*From a poll by the the Pew Research Center (Aug. 30): "Americans believe that workers in this country are worse off now than a generation ago - toiling longer and harder for less in wages and benefits, for employers who aren't as loyal as they once were, in jobs that aren't as secure, and in a global economy that might very well send their work overseas."

*Washington Post op-ed column by Harold Myerson (Aug. 30): "…wages and salaries now make up the lowest share of gross domestic product since 1947, when the government began measuring such things. Corporate profits, by contrast, have risen to their highest share of the GDP since the mid-'60s - a gain that has come chiefly at the expense of American workers.
Don't take my word for it. According to a report by Goldman Sachs economists, 'the most important contributor to higher profit margins over the past five years has been a decline in labor's share of national income.'

"Clearly, globalization has weakened the power of workers and begun to erode the egalitarian policies of the New Deal and social democracy that characterized the advanced industrial world in the second half of the 20th century."

*AFL-CIO President John Sweeney: "This Labor Day, it appears that a perfect storm is gathering that may well sweep away Republican control of the Congress this fall. Economic trends have strained working families to the breaking point. Workers are not sharing in the wealth they helped create, and our nation's economic recovery has not been a recovery for workers at all."