Candidates spin economic news

By Ken Moritsugu
Knight Ridder News Service

COLUMBUS, Ohio -- President Bush and Democratic challenger John Kerry seem to be talking about two different economies on the campaign trail.

Yet, they're both right.

While the overall economy is picking up, as Bush highlights, the recovery has yet to trickle down to many workers, as Kerry emphasizes. One telling statistic: Wages for those who make $33,000 or less -- fully half the work force -- are falling behind rising prices for gasoline and food.

"You've got really two different worlds out there," said Mark Zandi, the chief economist at Economy.com, an analysis firm in West Chester, Pa. "You've got folks who are doing quite well, and folks at the bottom half who are struggling."

Kerry has been trying to capitalize on that dichotomy by focusing on what Democrats call the "middle-class squeeze." His strategists acknowledge that they must, to a certain extent, "talk down" the economic recovery.

But that strategy leaves Kerry open to Republican hammering that the Massachusetts senator is a doom-and-gloom candidate. And if the economy continues to improve, Kerry's message will be increasingly difficult to sell to voters.

"Our economy is good here," said Amelia Durkee, a government worker in Columbus, Ohio, where Kerry campaigned recently. "If you don't have a job it's because you don't want to."

Ohio, a hotly contested swing state in the election, has been hit hard by the loss of factory jobs. But Columbus, with a more diversified economy, is faring better than the industrial northeastern region of the state.

Still, Durkee's co-worker, Donna Sebring, isn't feeling the recovery yet.

"There are signs that the economy is improving, but it's mostly in the stock market and hasn't filtered down to the creation of jobs," the 50-year-old undecided voter said.

Durkee and Sebring said the Iraq war would play a bigger role than the economy in influencing their choice for president. But the economy remains the leading issue for voters in Ohio, according to polls by Mason-Dixon Polling & Research.

The Bush campaign trumpets statistics showing growth in disposable income, how much people have to spend after taxes, since Bush took office. In the past year, disposable income per person has risen 2.8 percent, adjusted for inflation, according to the Commerce Department.

But much of that additional income -- from tax cuts, stock market gains and refinancing home mortgages -- accrued to financially better-off people, economists say.

Kerry points out that wages, a more dominant source of income for the less well-off, haven't kept up with inflation. In the past year, average pay for nonsupervisory workers has risen 2.2 percent to $15.64 an hour, while consumer prices are up 3 percent, according to the Labor Department.

"There's no contradiction between the two claims," said Larry Bartels, the director of the Center for the Study of Democratic Politics at Princeton University. "In the current climate, the average is disproportionately affected by what's going on at the top of the distribution."

High gasoline prices and rising interest rates weigh on the mind of April Stinelli, 45, an undecided voter who drives 90 miles each way from Milford, Ohio, to Columbus to work as a clerk for the federal government.

The economy will be foremost on her mind as she votes, she said, though she is skeptical of both candidates: "They talk the talk but they don't walk the walk."

Polls suggest that Bush is gaining support in regard to the economy, though he still trails Kerry in that area.

On the issue of "creating jobs," 49 percent of voters favored Kerry, compared with 42 percent for Bush, according to a George Washington University "Battleground 2004" poll released last week.

Kerry's lead on that issue has narrowed by 10 percentage points since last September, when 54 percent chose Kerry and 37 percent picked Bush.

The poll of 1,000 registered likely voters, which has a margin of error of 3.1 percentage points, also found an optimistic outlook. While only 37 percent rated the economy as excellent or good today, 51 percent expect it to be either excellent or good in six months.

So what's that all boil down to for swing voters?

"I'm pretty undecided," said Erich Gellner, 42, a Republican who owns two struggling Internet espresso bars in Columbus. "I could go either way. A lot has to do with the next couple of months."

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