Take his recent policies
- No tax on tips
- No tax on overtime
- Capping interest rates on credit cards
They will be like building a wall and Mexico paying for it and repealing ObamaCare. They won't materialise.
And if you care to check...when he was in, the blue-collar wages rose at a faster rate than any of the top tiers?
What “Blue Collar Boom”?
In his 2020 State of the Union address, President Trump claimed that his policies have led to a
“blue collar boom.” He has said that wages for working-class Americans have surged, thousands
of new factories have sprung up, hundreds of thousands of factory jobs have returned from
overseas and blue collar job growth has skyrocketed.1
These claims are all highly misleading or flatly untrue. Even before the coronavirus outbreak, the
promised benefits of the president’s $1.9 trillion tax cuts hadn’t materialized and manufacturing
had fallen into a slump—the public health crisis, fueled in part by the administration’s early
refusal to acknowledge it and subsequent glacial response, will greatly accelerate the downward
trend.
2
By mid-February 2020, President Trump’s trade war with China already had badly hurt many
American businesses and their employees, requiring action by the Federal Reserve to counter the
effects of this disastrous policy. Moreover, the 2017 tax cuts—rather than supercharging the pace
of wage growth as the president had promised—resulted in very small hourly pay increases for
working-class Americans in both the manufacturing and service sectors, while the after-tax
incomes of the wealthiest wage earners have skyrocketed.
U.S. manufacturing contracted in 2019
After a brief upturn in 2018, manufacturing had fallen into a slump by the first quarter of 2019.
Manufacturing was in a technical recession as the Federal Reserve reported that manufacturing
production contracted in three of the four quarters in 2019. Over the year, factory production
shrank by 1.3 percent.
Since the outbreak of coronavirus, the downturn in manufacturing has accelerated with the New
York Federal Reserve’s Empire State Manufacturing Index of business conditions falling 34
points to reach its lowest level since 2009. The decline from February to March was the largest
on record.4 Manufacturers are currently facing an unprecedented drop in demand and supply
chain disruptions as a result of coronavirus, and it seems likely that the sector will be in deep
recession for the foreseeable future.5
Job growth in manufacturing slowed dramatically in the past year
U.S. manufacturing has been shrinking since 1979, when the number of manufacturing jobs
peaked at approximately 19.5 million, almost 22 percent of the working population. The sector
shed more than two million jobs during the Great Recession, and now less than 8.5 percent of
American workers are employed in manufacturing.
Manufacturing job growth accelerated somewhat in 2018, with 264,000 jobs created over the
year. However, it slowed dramatically to only 61,000 jobs in 2019.
6 Recently it has slowed to a
crawl, with only 23,000 jobs added in the past eight months.7 The president’s policies and his
trade wars with China and other countries have taken a particular toll on the sector.
The states that rely most on manufacturing lost jobs last year
Manufacturing job growth has been slowing nationwide and has been especially weak in
Midwestern states, where manufacturing makes up a larger share of jobs than in other parts of
the country.8 Of the ten states with the largest number of manufacturing jobs, eight have lost
manufacturing jobs over the last year. This includes the key Midwestern states of Ohio (-4,600
jobs), Illinois (-14,300), Indiana (-12,000) and Wisconsin (-2,700), as well as California (-3,700),
Pennsylvania (-1,200), North Carolina (-500) and New York (-3,600)
Most new “manufacturing establishments” employ five or fewer people
The president claims that 12,000 new factories have been built since he has been in office. This
is highly misleading. Data from the Bureau of Labor Statistics does show that 12,000 additional
“manufacturing establishments” were added in the first year and a half of the Trump
administration. However, more than 80 percent of these “manufacturing establishments” employ
five or fewer people.
Many of them are not even factories at all, as the Bureau of Labor Statistics uses an expansive
definition of a factory that includes any establishment where materials are transformed into new
products.10 Under this definition, even bakeries and tailors count as “manufacturing
establishments.”
Few manufacturing jobs have returned to the United States under President Trump
Despite the president’s claims that he would bring millions of jobs back, companies announced
plans to relocate just 145,000 factory jobs to the United States in the first two years of the Trump
administration.
11 This is less than one month of average jobs gains over the past 11 years of
expansion. And companies announced more than half of these jobs in 2017 before the Tax Cuts
and Jobs Act (TCJA) took effect—further evidence that the TCJA did not create the sustained
investment that was promised.
12
In 2009, the Obama administration took decisive action to rescue General Motors, Chrysler and
auto parts suppliers to prevent the auto industry from collapsing. It is estimated that this saved
1.5 million jobs in the auto industry.13
More than 50 million Americans have median annual earnings of just $18,000
While unemployment is exceptionally low at 3.5 percent, topline economic numbers do not tell
the full story. Employment does not guarantee good pay and benefits, and the prevalence of lowwage work is often underestimated. Fifty-three million Americans—44 percent of workers
between the ages of 18 and 64—have median annual earnings of just $18,000.14
These low-wage workers are not just younger workers and students with part-time jobs. A
majority of them are in their prime working years, and they support themselves and their families
with these low-wage jobs. Many work two or sometimes even three jobs.
15 This is the reality for
eight million Americans.16
Meanwhile, the costs of education, housing, health care, child care and other living expenses
have continued to climb. Over the last three decades, the cost of attending college increased
nearly eight times faster than wages did.17
Hourly wages for typical workers have increased only 23 cents over the past year
Wage growth has fallen short of expectations given the tight labor market with such low
unemployment. Though much has been made of recent wage growth for workers in low-wage
industries, gains have been modest. Real average hourly earnings for production and
nonsupervisory employees (typical workers) increased just one percent over the last year. In real
(inflation-adjusted) dollars, this amounts to an increase of just $0.23 from $23.73 in February
2019 to $23.96 in February 2020.
18 Over the year, this totals an extra $478—not an insignificant
amount, but not enough to truly lift the incomes of typical workers.
Production and nonsupervisory workers in manufacturing only saw a 0.5 percent increase in their
real average hourly earnings over the last year—just an $0.11 increase from $22.42 in February
2019 to $22.53 in February 2020 in real (inflation-adjusted) dollars. This only amounts to an
extra $229 over the year.
Average earnings growth under President Trump lags that under President Obama
In President Trump’s first three years in office, real average hourly earnings for workers
increased by an average of 0.8 percent—which is less than the 1.3 percent average increase over
the last three years of President Obama. For production and nonsupervisory workers (typical
workers), real average hourly earnings increased by an average of just 0.9 percent under
President Trump, compared to an average increase of 1.5 percent under President Obama.
