Recent economic reports have President Donald Trump crowing.
The big headline numbers do sound encouraging. The unemployment rate is down to 3.6%, the lowest since 1969. Average earnings are finally outpacing inflation, the stock market has been hitting record highs, and the first quarter of 2019 had the fastest annualized growth rate (3.2%) since 2015.
And yet most of the gains from our growing economy are still going to those who least need a boost. Stock market rallies, for example, further concentrate wealth among the very richest Americans. The top 1% of Americans own more than half of stocks and mutual funds. The bottom 90% own just 7%.
For ordinary Americans, the slight uptick in wages is not enough to make up for many years of stagnation. Average hourly pay rose just 6 cents in April 2019 and 4 cents the month before that.
Workers need a much bigger raise if they are to receive their fair share of economic gains, especially with prices for many essentials rising much faster than wages. For example, compared to the 3.2% increase in average earnings over the past year, spending on prescription drugs is up 7.1% while the average house price rose 5.7%. Average childcare costs jumped 7.5% between 2016 and 2017.
Such small pay increases won’t do much to chip away at the country’s $1.6 trillion in student debt — a burden leading 1 in 15 borrowers to consider suicide, according to a recent survey.
The rosy topline indicators also mask our country’s deep racial divides. The black unemployment rate remains more than twice as high as the rate for whites (6.7% versus 3.1% for whites) and it has increased from 6.5% in April 2018.
People of color are also more likely than whites to be among the more than 27 million Americans who lack health insurance. The uninsured rate is 19% for Latinos and 11% for blacks, compared to 7% for whites. And according to a recent report co-published by the Institute for Policy Studies, 37 percent of black families and 33 percent of Latino families have zero wealth or are in debt, compared to just 15.5 percent of white families.
Despite the overall tightening of the labor market, a large share of U.S. jobs are still “precarious,” with little security in terms of retirement benefits, affordable health insurance, or predictable scheduling.
While presiding over an economic recovery that started under his predecessor, Trump has done nothing on his own to lift up working people.
The president has signed several executive orders to curtail labor union rights and his Labor Department recently announced plans to scale back an Obama policy to expand overtime rights to millions of workers. He has also lent his support to “right to work” laws that undercut unions by prohibiting them from requiring workers who benefit from collective bargaining agreements to pay dues.
Unless workers have more power to negotiate for their fair share of economic awards, even a real economic boom will have limited benefit for those who need it most.