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Q&A on the News

By Lori Johnston
Jan 26, 2011

Q: What was the unemployment rate when the Bush tax cuts went into effect? Is there any data to support the claim that tax cuts create jobs?

-- Mark Hardage, Villa Rica

A: Research by PolitiFact.com, a project of the St. Petersburg Times that seeks to find the truth in American politics, contends that the George W. Bush-era tax cuts failed to increase work-force participation over the decade, although employment rose between 2003 and 2007, before the worst economic downturn in 80 years. PolitiFact.com, which also has a partnership with The Atlanta Journal-Constitution, looked at two main areas: employment numbers and work-force participation. Employment is just what it sounds like: the number of Americans working. However, work-force participation is more complicated and is actually more meaningful, it says. From PolitiFact.com: "Work-force participation is the percentage of the population 16 and older that is employed. Most economists regard it as a more meaningful measure of employment than the total number of Americans working. Here's why: The total employment figure does not take into account that the United States' population is growing and additional workers enter the job market every day. The U.S. has to create about 125,000 new jobs a month just to keep its employment and unemployment rates steady. The measure of work-force participation includes population growth." Employment numbers from the U.S. Bureau of Labor Statistics show 132 million Americans were employed in June 2001, 129.8 million were employed in June 2003 and 138 million were employed in December 2007. By the end of November 2010, only 130.5 million were employed. In June 2001 (when the first Bush tax cuts were approved), work-force participation was at 63.7 percent. When the second Bush tax cuts happened, work-force participation was 62.3 percent in June 2003 and 62.7 percent in December 2007. The figure was 58.2 percent in November, PolitiFact.com reported.

Lori Johnston wrote this column. Do you have a question about the news? We’ll try to get the answer. Call 404-222-2002 or e-mail q&a@ajc.com (include name, phone and city).

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Lori Johnston

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