In Donald Trump’s mind, we have the best economy, unemployment rate and wage gains ever.
Not true, not true and not true.
He is grossly overstating the extent of U.S. economic gains declaring: “Great financial numbers being announced on an almost daily basis. Economy has never been better, jobs at best point in history.” In fact, the economy, jobs and wages are nowhere close to historic bests based on data from by the Bureau of Labor Statistics.
Fact: The post-war economy of the 1950s and early ’60s was the best economy ever. And as compared to Trump’s claim of 4 percent growth, in the late 1990s growth topped 4 percent for four straight years and growth even reached 7.2 percent in 1984.
Unemployment often has been lower than the current 3.9 percent, having reached a low of 2.5 percent in 1953 during the Korean War. While the 3.9 percent is certainly welcomed, many economists have warned that U.S. growth is largely fueled by government borrowing and massive tax cuts blowing a huge hole in the deficit and is likely to be unsustainable after a few quarters. And while employers added 215,000 jobs a month this year, they added jobs at a faster pace in 2014 and 2015.
And now we have General Motors, facing some $700 million in higher steel prices because of Trump’s tariffs, closing five factories and laying off nearly 15,000 workers.
Despite robust economic claims by Trump, if you measure wage increases by “median” rather than “average,” as does the Trump White House, you get an entirely different and much more accurate picture. It’s like the old saw about the average wage of the patrons in a working-class bar suddenly exploding when Bill Gates walks in.
For instance, Trump said, citing average figures: “After years of wage stagnation, we are finally seeing rising wages.” But using the median, wage gains for average Americans in the past 18 months are not even as good as under President Obama during his last 18 months in office going from an inflation-adjusted $803 weekly in the third quarter of 2015 to $838.82 in the fourth quarter of 2016. Meanwhile, weekly earnings fell $16.80, or 1.9 percent, during Trump’s first 18 months as president.
Put another way, according to the White House, average earnings rose from $894.06 in January 2017 to $937.02 in August 2018. That suggests impressive gains of $42.96 weekly over the 20-month period. But using the median, weekly earnings for working and middle-class Americans rose by just $11 before adjusting for inflation.
But this isn’t all about Trump. Working and middle-class wages have been stagnant for nearly 40 years as a result of Reagan’s trickle-down economics while, according to the Economic Policy Institute, executive salaries have increased by a startling inflation-adjusted 937 percent over the same period. Mother Jones reports if median household income had kept pace with the economy as it did prior to 1980 it now would be nearly $92,000 not $50,000.
So much for social-economic justice.