On Labor Day, it’s a tradition to try to sum up conditions for the American worker — and in a year before a presidential campaign, this is often done with the incumbent’s re-election prospects in mind.
So what about this year?
Donald Trump’s economic record, as of this Labor Day, is a mixed bag, albeit a bright spot in the administration’s otherwise-unblemished record of tarnishing race relations, the environment — and, indeed, most of what it touches. The unemployment rate is 3.7%, average job growth since he arrived in the White House is 183,500 per month, and median household incomes are up around 12% since he took office, even as faster gains (and bigger tax cuts) at the top exacerbate inequality.
The economy grew faster in 2018 than its norm since the financial crisis but appears to be reverting this year to the 2.3% yearly average since 2009, or slightly worse, with 2% annual growth in the second quarter announced Thursday. The S&P 500 index’s
30% gain since Jan. 3, 2017 (splitting the difference between those who think Trump should get credit for a post-election rally before he took office and those who don’t), compares to a 31% jump for the same stretch under his predecessor, who inherited a crashing stock market. (From March 2009’s bottom, the market rose 82% through this date in 2011.)
Here’s how Trump is doing by some major indicators to judge the state of workers, and presidents:
The 3.7% unemployment rate is the lowest since 1969. As Trump notes, unemployment among African-Americans, at 6%, is the lowest reading among data that go back to 1972. But Trump deserves little credit, because unemployment had dropped from 10%, and nearly 17% among blacks, to 4.7% and 7.7% by the time he was sworn in.
Grade: B+. You can’t fault the level, but the effort lacks the originality of an A paper. It simply sustained most of what was already happening.
Job growth under Trump is slower than Barack Obama’s second-term average of 208,000 a month. But this isn’t bad. In mature expansions, job growth should slow as the economy nears full employment. In fact, I predicted in early 2016 that it would slow to about 160,000 a month, so 183,500 isn’t disappointing.
Grade: B. This is the opposite of Trump’s grade for the unemployment rate. There, he lost an A because he didn’t contribute much to the good result. Here, he’s spared a C+ because mediocre growth has an extenuating explanation.
Beyond brave talk about work’s meaning, its real purpose is to bring in cash. Something has to put Labor Day burgers on the grill, and few can count on Trump’s $400 million in tax-curated gifts and inheritances from Dad to do the job.
Real median household income has risen about $7,000 under Trump to $65,000-plus, extending a run that began in 2014 after a seven-year decline, according to Sentier Research. It’s actually rising faster than in late Obama times, though the sharp upward movement began in 2014.
At the heart of Trump’s America-in-decline story was his boast that only he could fix manufacturing, which lost 4.5 million jobs under President George W. Bush and another 1.1 million in Obama’s first year.
By raw employment numbers, Trump beats Obama’s second term but trails the 2010-13 recovery in manufacturing. His 496,000 new manufacturing jobs compares to 385,000 in Obama’s second term and 530,000 from the February 2010 low to January 2013. Hourly pay for line workers is up 8%, too, matching Obama’s second term.
Grade: B/Incomplete. So far, Trump hasn’t made much of a difference. But his trade policies have recently hammered manufacturers’ profits, notably at General Motors
, and how much negativity trickles down to workers will play out between now and the election.
Trump’s efforts to repeal the Affordable Care Act are disgraceful, especially since he never proposed anything meaningful to help the 20 million–plus people who would lose their existing coverage.
Even in the market for company-paid health insurance, the biggest source of Americans’ coverage, he has flopped, failing to control annual premiums and out-of-pocket costs for family coverage, which hit $22,885 last year. As the Kaiser Family Foundation’s president, Drew Altman, pointed out, health insurance now exceeds the cost of buying a new car every year. That’s up $2,000 in just the first two years of Trump’s term (excluding this year), about double the increase in Obama’s later years.
Unions and minimum wage
The minimum wage of $7.25 per hour is nearly 40% lower than in the 1970s, adjusted for inflation — and Trump has done nothing to lift it. Boosting it to $15, as most Democratic politicians want to do, would raise pay for 33 million Americans, according to the liberal Economic Policy Institute. Trump is also moving to strip unions representing federal workers of bargaining power, while appointing management-side labor lawyer Eugene Scalia as secretary of labor.
The rubber will hit the road on Trump’s economic record when the economy, or manufacturing, slips into recession before the election — or does not.
The question for voters will be whether Trump’s trade war was worth its cost.
Come to think of it, that’s the question about Trump himself.