Multiple measures show that America’s economy is humming again, but according to The Economist, President Trump had little to do with any of it.
“Has Mr. Trump delivered on his promise to revive American manufacturing, mining and the like?” the story asks. “A more probable explanation is that he came to office just as America began to run out of willing workers to fill all of its job vacancies.”
But America is nowhere close to running out of willing workers. The percentage of working-age men in the workforce plunged early in President Obama’s term and remains at near-record lows. As a result, in the five years following the end of the recession in 2009, wages and salaries rose only 8.7 percent, and prices increased 9.5 percent.
While wages had begun to move upward before, they have skyrocketed in recent months. Wages and salaries grew faster for factory workers, builders and drivers than they did for professionals and managers in the third quarter of this year – and overall blue-collar wage growth now tops 4 percent, the magic number at which dramatic economic expansion can occur.
And it’s not just tip-driven: Often-seasonal jobs such as waiting tables and cleaning that have pushed the growth. It’s blue-collar jobs – skilled and semi-skilled labor – that are seeing the biggest wage increases.
In some industries, labor shortages “seem acute,” according to the Economist. Tile and terrazzo contractors are earning 11 percent more this year remodeling bathrooms. Soap workers have enjoyed an 11 percent hike as well.
It’s demand rather than a productivity boom, the story says, as well as a weakening dollar and strengthening world economy. Whatever it is, it added up to a 4 percent hike in exports in 2017 over 2016.
That’s enough to lure some of those men who sat out the labor market during the Obama administration to look for work again, the Economist reported. Almost all the labor market growth so far during the Trump administration has been women getting jobs and earning higher wages.
Energy also has rebounded. There are 907 active oil rigs in America, up from 568 a year ago. Energy has driven nearly 60 percent of the economic growth this year. The energy states – Texas and Oklahoma, in particular – are booming as someone in Washington has taken the shackles off the energy industry and allowed it produce wealth again, creating booms in both the energy and manufacturing sectors.
Unfortunately, according to The Economist, some people will have to move to take advantage of these new higher-paying jobs, and the communities they leave behind will be, well, left behind. Also unfortunately, wages for the top 1 percent of earners actually fell in 2016 and are only leveling off now.
This is good, right? Women finding jobs. The energy sector booming again. Working class making more; top execs slightly less. “So long as inflation remains low,” The Economist tells us.
There are so many hedges in this story that one wonders if the editors of The Economist are cheering for the U.S. to remain in the stagnant, unproductive economic cycle it has been in most of this decade. They seem almost to resent the present progress or any suggestion President Trump’s pro-business, pro-energy, pro-work economic approach might actually be working.
“After years of imbalance, a shift in economic power towards workers is to be welcomed,” the piece read. “Yet wage growth also helps to determine the fate of politicians, whether or not they deserve it. Mr. Trump’s election led to soaring self-business confidence, which is yet to abate. His promise to deregulate the energy sector may have spurred some investment. Yet his apparent economic success to date mostly reflects fortunate timing.
“That will not stop him from taking the credit should a tight labor market lift America’s spirits as the 2020 presidential election approaches. Rightly or wrongly, the biggest beneficiary of a sustained wage boom for workers may be a suited man sitting in the Oval Office.”