(What’s Left of) Our Economy: A New Anti-Trade War Argument Bites the Dust

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BLS, blue-collar workers, Bruce Yandle, Bureau of Labor Statistics, consumers, George Mason University, inflation-adjusted wages, Mercatus Center, private sector, real wages, tariffs, Trade, trade war, Trump, wages, Washington Examiner, work week, workers, {What's Left of) Our Economy

Bruce Yandle of George Mason University’s Mercatus Center has just added a novel claim to the list of catastrophes allegedly triggered by President Trump’s tariff-centric trade policies. In an October 28 Washington (D.C.) Examiner post, He seems to understand that amid rock-bottom rates of U.S. joblessness, it’s getting ever tougher to contend that the trade wars are killing American employment (though the rate of net job gains has certainly slowed in most sectors since the advent of tariffs on steel and aluminum imports in March, 2018).

So Yandle, a former university business school dean, has come up with another reason for the nation’s workers and aspiring workers to hate the curbs on trade: They’re making Americans work too darned hard for the stuff they like to buy. It’s an intriguing idea with just one fatal flaw: It’s not supported by a shred of evidence. P.S.: It takes about 10 minutes of internet surfing and arithmetic-ing to demolish.

Here’s Yandle’s case:

“[T]he occurrence of high employment in the face of a slowing economy can be the result of putting tariff-made rocks in our own harbors to keep out lower-cost foreign goods. When cheaper goods can no longer be imported, we have to work longer and harder to maintain the same level of consumption.

“Low unemployment is something to celebrate but let’s at least note that there are some people who might (quite reasonably) prefer to work a little less with more leisure time and cheaper cars, clothes, and tools, which are some of the goods that have been hit with tariffs.”

I’m unaware of any instances of workers complaining that, “I’d be able to knock off earlier and clean out Walmart if only for those stupid tariffs,” but what I suppose really doesn’t matter. Nor should what anyone supposes matter – because the federal government keeps statistics both on Americans’ hours on the job and their pay.

The results of my research are below. They show hours worked for various major categories of private sector employees, and the change in their hourly inflation-adjusted wages, over two relevant time periods. The first goes from the first full month of the Trump administration (February, 2017) through the latest data month (this September – tomorrow the Bureau of Labor Statistics (BLS) will release the October numbers), and from the first full month of the administration’s first important tariffs (April, 2018, for the steel and aluminum levies) through September. (Government employees’ wages aren’t monitored by BLS because their pay is set largely via politicians’ decisions, and therefore says little about the economy’s fundamental strengths or weaknesses.)

Total private weekly hours since Trump inauguration: 34.3 to 34.4

Total private weekly hours since 1^st (metals) tariffs: 34.5 to 34.4

Total blue-collar weekly hours since Trump inauguration: 33.6 to 33.6

Total blue-collar weekly hours since 1^st (metals) tariffs: 33.8 to 33.6

Total manufacturing weekly hours since Trump inauguration: 40.7 to 40.5

Total manufacturing weekly hours since 1^st (metals) tariffs: 41.0 to 40.5

Total manufacturing blue-collar weekly hours since Trump inauguration: 41.9 to 41.5

Total manufacturing blue-collar weekly hours since 1^st (metals) tariffs: 42.4 to 41.5

Total private real hourly wage since Trump inauguration: +2.53 percent

Total private real hourly wage since 1^st (metals) tariffs: +.1.86 percent

Total blue-collar real hourly wage since Trump inauguration: +3.05 percent

Total blue-collar real hourly wage since 1^st (metals) tariffs: +2.49 percent

Total manufacturing real hourly wage since Trump inauguration: +0.46 percent

Total manufacturing real hourly wage since 1^st (metals) tariffs: +0.83 percent

Total manufacturing blue-collar real hourly wage since Trump inauguration: +2.77 percent

Total manufacturing blue-collar real hourly wage since 1^st (metals) tariffs: +1.25 percent

For every category except two, over both time periods, workers’ weekly hours went down, and their real wages went up. That is, their leisure time and the buying power of their pay both have risen. They’ve been working less and been able to purchase more.

The first exception is overall private sector workers. Since Mr. Trump’s administration began, their work week has edged up – a tenth of an hour. Even so, their pay rose faster. So they don’t have much cause to complain about working too hard and enjoying the fruits of their labor less.

The second exception entails the overall blue-collar workforce (called “production and nonsupervisory employees” in BLS-ese). Its work week has stayed the same since the Trump inauguration. At the same time, however, this group experienced the fastest wage increase during this period. And its pay in constant dollars went up even faster after the metals tariffs were imposed – as its workweek dipped.

Moreover, this points to another problem with Yandle’s case:  All four categories of workers saw their workweek fall faster after the tariffs’ imposition than before. And in three of the four (except for manufacturing blue-collar workers) wages rose faster after the tariffs went on as well.

And in case you’re wondering, to create some context, whether American workers recently have been significantly better off in the absence of tariffs and trade wars, the answer is, “Not consistently during the current economic recovery.”

No one’s saying that these results show that the United States is a workers’ paradise, or is becoming one because of the Trump tariffs. But if anyone has a right to be grumpy about the above trends, it’s trade mavens like Yandle, who are pushing fact-free arguments to take the levies down.

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Those Stubborn Facts: The Latest on Immigration and Wages

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blue-collar workers, Immigration, Those Stubborn Facts, wages

Net change in U.S. immigrant inflows, 2017-18: -70 percent

Change in U.S. real wages for all workers, 2017-18: +1.30 percent

Best annual increase since: 2014 (1.82 percent)

Improvement over 2016-17 wage change: 196.7 percent

Change in U.S. real wages for blue-collar workers, 2017-18: 1.63 percent

Best annual increase since: 2015 (2.23 percent)

Improvement over 2016-2017 wage change: 675.6 percent

 

(Sources: “Immigrant Population Growth in the U.S. Slows to a Trickle,” by Sabrina Tavernise, The New York Times, September 27, 2019, https://www.nytimes.com/2019/09/26/us/census-immigration.html; Average hourly earnings of all employees, 1982-1984 dollars, total private, seasonally adjusted, Total private, Databases, Tables & Calculators by Subject, Data Tools, Bureau of Labor Statistics, U.S. Department of Labor; and Average hourly earnings of production and nonsupervisory employees, 1982-84 dollars, total private, seasonally adjusted, Total private, Ibid.)

(What’s Left of) Our Economy: The Trump Effect on U.S. Manufacturing Workers

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blue-collar workers, election 2020, inflation-adjusted wages, Jobs, manufacturing, Obama, real wages, Trump, wages, {What's Left of) Our Economy

There’s no question that President Trump has compiled a solid record when it comes to boosting American manufacturing employment, and the numbers look especially good compared with that of his predecessor, Barack Obama.

Wages, though? They remain another story entirely, and keep raising the question of how convincingly during his reelection campaign the President will be able to portray himself as a godsend to U.S. industry’s workers.

According to the most valid comparison that can be made to date, during the 29 months since Mr. Trump settled into the Oval Office (February, 2017), overall manufacturing employment and blue-collar manufacturing employment are both up considerably faster than during the last 29 months of the Obama administration. Here are the specific percentage gains for the manufacturing sector overall, and for industry’s non-supervisory and production workers – often informally dubbed “blue-collar workers”:

                                                Last 29 Obama months        First 29 Trump months

Manufacturing:                            +1.31 percent                        +3.86 percent

Blue-collar manufacturing:         +0.92 percent                         +3.40 percent

But the average hourly wage figures adjusted for inflation actually flip these results on their head:

                                              Last 29 Obama months          First 29 Trump months

Manufacturing:                           +3.05 percent                           -0.09 percent

Blue-collar manufacturing:         +3.22 percent                          +2.31 percent

It’s true that manufacturing’s blue-collar workers during the Trump era so far have been faring far better than their supervisors (who remain better paid in absolute terms). But the price-adjusted paychecks are growing significantly more slowly than they were during the final Obama years.

Of course, this politics-centric post on manufacturing wouldn’t be complete without discussing how President Trump’s tariffs have affected the picture. And here the script is arguably flipped once again to some extent, at least during the Trump years alone. The table below shows the average monthly jobs gains recorded for manufacturing and blue-collar manufacturing before the first metals tariffs were imposed (March, 2018) and after. Since the time frames differ somewhat, I thought the monthly averages would illustrate the trends more clearly.

                                                   Pre-tariffs                                  Post-tariffs

Manufacturing:                            17.38K                                       15.07K

Blue-collar manufacturing:         11.54K                                           8.6K

After the tariffs, the pace of manufacturing employment increases slowed somewhat, but it slowed much faster for blue-collar manufacturing workers.

Now for the wages results, presented as the average monthly changes in absolute (dollars and cents) terms:

                                               Pre-tariffs                                     Post-tariffs

Manufacturing                        -3 cents                                         +2 cents

Blue-collar manufacturing    +8 cents                                          +5 cents

In sum, after-inflation hourly pay rose slightly after the trade curbs came on after having fallen beforehand. Real wages for blue-collar manufacturing workers rose during both periods, but more slowly after the tariffs.

These results indicate that the President can make a decent case that his administration, and even his tariffs, have helped manufacturing workers on balance. But on the pay front in particular, the story gets complicated – and the kind of rhetorical precision Mr. Trump will need to display to date in order to tout these achievements credibly doesn’t seem to be one of his strong suits.

(What’s Left of) Our Economy: Real Wages Remain a Trump Economy Weakness

Tags

Barack Obama, blue-collar workers, Employment-Population ratio, inflation adjusted wages, Labor Force Participation Rate, manufacturing, non-supervisory workers, private sector, production workers, real wages, slack, Trump, wages, {What's Left of) Our Economy

As I’ve written repeatedly, I’m convinced that the economic data conclusively show that the U.S. economy on numerous fronts has kicked into a higher gear during the Trump years. But last week’s inflation-adjusted wage figures are an important reminder of one big exception: American workers’ price-adjusted take- home hourly pay.

Indeed, by every relevant measure, these real wages during Mr. Trump’s first 27 months as President have been rising at a pace slower than that during his predecessor Barack Obama’s final 27 months in office. Ditto for manufacturing workers, whose fortunes have been such a Trump focus.

And the comparison flatters Obama even when the data for blue-collar workers – generally the lowest paid members of the American workforce – are stripped out, although in absolute terms the Trump-era performance here has been somewhat better.

Here are the percentage changes through May. (In the lingo of the Bureau of Labor Statistics, which tracks these numbers, blue-collar workers are “production and non-supervisory workers.”  And as usual, public sector workers are excluded because their pay levels are overwhelmingly determined by politicians’ decisions, and thus say little about the fundamentals of the economy or the job market.)

                                     m/m        y/y   1^st 27 Trump months  last 27 Obama months

private sector:            +0.18     +1.30              +2.06                         +3.00

manufacturing:          +0.28     +0.46               -0.09                         +2.96

private production:    +0.32     +1.73              +2.29                         +3.27

mfg production:        +0.23     +1.03              +2.08                          +2.73

These results continue to be especially surprising given overall unemployment rates that have been at multi-decade lows – which should be forcing wages up, as employers find themselves forced to offer higher pay in order to compete for increasingly scarce workers. And although, as I’ve written, it’s possible that manufacturers in particular have held the line on wages because they’re not able to find workers with anything close to the skills they need, I wonder how understanding such workers will be about this explanation when it comes time to vote for President in 2020.

At the same time, here’s what’s not open to debate: Despite the plunge in the unemployment rate, other measures – notably the Employment-Population ratio and the Labor Force Participation Rate – show that there’s plenty of slack left in the U.S. labor market. If politicians and business leaders really want to see real wages rise healthily again, they’ll need to figure out how to lure able-bodied Americans still on the sidelines back to work.

Im-Politic: Why His Adversaries Could be Underestimating Trump Again

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202 election, B.J. Bethel, blue-collar workers, defense manufacturing, General Motors, Im-Politic, Lima, Lordstown, Mainstream Media, manufacturing, manufacturing workers, Midwest, non-college whites, Ohio, public sector unions, tanks, Trump, unions, WDTN TV

Although the Democratic Party often seems to have gone identity politics-crazy, even many in its identity-obsessed progressive wing believe that President Trump won’t be defeated in the 2020 Presidential election unless the party improves its performance with non-college educated white voters, many of whom work in so-called blue collar industries like manufacturing and fossil fuel extraction. Many of these progressives (including the Mainstream Media journalists who often carry their water) have claimed that this constituency is ripe for the retaking thanks to alleged Trump policy failures or blunders on trade, tax reform, and healthcare, and proceed to cite evidence that the President’s backing in this segment of his coalition is fading significantly.

Given the latest Trump healthcare position – which I agree is block-headed – and his penchant for inconsistency on core issues like immigration as well as trade, I’d be the last person to dismiss this analysis as naive. The more so if Democrats nominate a 2020 candidate with at least some credibility on blue collar social and cultural as well as economic concerns.

But if you’re looking for reasons for deep skepticism, look no farther than a recent account of a Trump Ohio factory visit from B.J. Bethel, of Dayton, Ohio’s WDTN TV. Bethel, (who in the interest of full disclosure, is also a personal friend), covered the President’s March 20 appearance at a Lima, Ohio tank factory.

Mr. Trump’s prospects in Lima seemed mixed. On the one hand, his defense budget proposals have kept the factory open following talk during the Obama administration of closing it. On the other, his trip came two weeks after General Motors completed (for now) the shutdown of a big auto assembly plant in Lordstown in northeastern Ohio – despite Mr. Trump’s campaign pledge to keep the facility open. Moreover, since the Lima factory makes weaponry, its non-supervisory workers belong to government employee unions, which have been especially critical of the President at least partly since their members haven’t been directly affected by the kinds of offshoring-friendly trade policies and Open Borders immigration policies of his predecessors.

Nonetheless, as Bethel wrote for WDTN’s website, “Trump received a rousing ovation when he entered the floor where the speech was held.” His speech was “loved” by the attendees he interviewed. And the President seems to have received his biggest cheers when he “hit hard at union leaders while praising union workers, stating the leaders often say one thing and do another.”

According to Bethel, “‘They’re [the union leaders] good guys, but they’re Democrats,’ Trump said.

“He mentioned ‘high union dues’ paid by workers and the shifting of blue collar allegiances from Democrats to Republicans.

“This was the only instance of his speech where the crowd chanted ‘Trump, Trump.'”

In some subsequent Twitter direct messages, Bethel elaborated:

“Trump goes off on Lordstown, and blames the union leadership for some of the issues GM had at the plant, which I think is debatable, but Trump is savy, he knows what he’s doing.

“He talks about union leadership, and he’s so casual in this speech, and he says, ‘I’ve invited union leaders into the White House, I asked them what can we do, they’re extremely nice people, THEY AREN’T LIKE US, THEY’RE DEMOCRATS THOUGH and they’re always going to be democrats, so you know, they go with Hillary while I’m trying to save jobs.’

“Then he pivots to this and it’s the most amazing thing I’ve heard a politician do.

“He starts hammering union leadership on the basis of how they treat the rank and file in the union. Basically they aren’t doing what’s necessary to back up the money they make and aren’t doing everything they need to do to. And look at the dues you pay, how much do you pay in dues a week or year and how much do you get out of it?

“So how does the crowd react?

“It roars, ‘TRUMP, TRUMP, TRUMP, TRUMP’ – only time during the entire speech he had his name cheered.

“This is a huge union plant. It’s public union, as solid as it gets, their own committeeman are sitting around with them, and they’re cheering Trump as he bashes the leadership.”

As Bethel concludes, “so the GOP is working the unions hard, even the public unions. Trump beats up the leadership, while the rest go in soft. it’s a strategy to completely usurp union workers and complete taking over the working class.”

What’s especially interesting is that this Trump event was extensively covered by the Mainstream Media – as is almost all presidential travel. But the overwhelming focus of the coverage was the President’s attacks on his longtime political adversary, the late Republican Senator John McCain. (See, e.g., here and here.) 

I can’t possibly fault the journalists attending the speech from zeroing in on the McCain remarks. But revealingly, none of the coverage I’ve read (produced mostly by White House correspondents who tend to be politics-oriented, especially as national political campaigns heat up), mentioned the crowd’s reactions to the union-leader bashing by Trump.

The President has been erratic enough to render hazardous any predictions about the 2020 election. But the same Mainstream Media correspondents who overlooked the union rank-and-file response to the President in Lima belong to the same journalistic complex that was taken completely by surprise by Mr. Trump’s 2016 victory – and especially by his strength in the industrial Midwest. Their Lima coverage raises the question of whether they’re about to miss the mark again.

(What’s Left of) Our Economy: What Blue-Collar Pay Surge?

Tags

benefits, blue-collar workers, Bureau of Labor Statistics, compensation, managers, minimum wage, professionals, salaries, The Economist, wages, White-collar workers, {What's Left of) Our Economy

That was some claim made by The Economist earlier this month about blue-collar wages in America: They “have begun to rocket. In the year to the third quarter, wage and salary growth for the likes of factory workers, builders and drivers easily outstripped that for professionals and managers.” Even better, these workers, whose pay stagnation has practically defined the so far weak U.S. economic recovery from the Great Recession, have been enjoying pace-setting compensation gains for the last five years, the magazine writes.

I’d be feeling awfully good about this development – except the article in question was a model of overly enthusiastic cheerleading. More specifically, it’s a great example of how failing to look at statistics in enough detail can produce seriously flawed pictures of the economy.

The heart of The Economist‘s case is this chart, which shows that overall compensation (wages, salaries, and benefits) for occupations that don’t involve managerial, executive, or high level administrative responsibilities, and that lie outside the professions, has been rising faster than compensation for occupations that do deal with these matters.

But even a glance should reveal a serious potential problem – the categories are awfully broad. In fact, they lump together lots of occupations that on their own seem awfully big. (To be sure, the source – the Bureau of Labor Statistics – uses these categories. But it presents narrower ones, too.] Further, the five-year period The Economist uses as its longest-run time frame is a period that’s economically meaningless. And in fact, disaggregating those occupational categories and using an economically meaningful long-term time frame (the duration of the current recovery) yields significantly different results.

For example, according to the chart, the big American compensation winner has been the “production, transportation, and material moving” cluster. Adjusted for inflation (which the magazine doesn’t do), here’s how its compensation (including for government workers in these occupations) has improved over the latest quarter year for which data are available, the latest year for which we have statistics, and since the recovery began:

2Q 2017-3Q 2017: +0.38 percent

3Q 2016-3Q2017: +1.06 percent

current recovery: +5.56 percent

This performance is indeed much better than the super-category covering white-collar workers – “management, professional, and related” workers:

2Q 2017-3Q 2017: -0.01 percent

3Q 2016-3Q 2017: +0.01 percent

current recovery: +2.86 percent

But look what happens when you separate production workers from the transportation and material moving workforce:

2Q 2017-3Q 2017: +0.49 percent

3Q 2016-3Q 2017: +0.79 percent

current recovery: +4.58 percent

The compensation gains are still better than those for the managers. But the gap is a good deal smaller.

Now let’s remove professional workers from the management cluster. The compensation increases for business and financial managers are:

2Q 2017-3Q 2017: -0.01 percent

3Q 2016-3Q 2017: +0.57 percent

current recovery: +4.48 percent

Except for the latest quarterly figure, they’re pretty comparable to the advances for the production workers.

Now let’s look at another blue-collar category – “office and administrative support.” Compensation increases for the relevant time frames are as follows:

2Q 2017-3Q 2017: -0.009 percent

3Q 2016-3Q 2017: +0.19 percent

current recovery: +4.63 percent

These increases over the short-term are actually somewhat weaker than for the business and financial managers. When it comes to “installation, maintenance, and repair,” the latest quarterly compensation gains were a bit better than those for the business and financial managers. But the latest yearly and recovery era increases for the installation category were worse than those for the business and financial managers.

2Q 2017-3Q 2017: +0.01 percent

3Q 2016-3Q 2017: +0.39 percent

current recovery: +4.40 percent

And we see the same kinds of numbers for the catch-all “service operations” category:

2Q17-3Q17: -0.01 percent

3Q16-3Q17: +0.38 percent

current recovery: +3.04 percent

So what’s really going on here is that compensation for some blue-collar workers has recently begun to rise faster than compensation for some white-collar workers, and that compensation for some white-collar workers continues to rise faster than compensation for some blue-collar workers. And let’s not forget how governments across the country have acted in the last few years to juice blue-collar pay – by raising the minimum wage. These actions, whatever their substantive merits or flaws, tell us nothing about underlying trends shaping the economy.

Yes, it’s hard to turn those observations into a catchy headline and an eye-opening story. But that’s why discerning readers have learned to distinguish journalism from clickbait.

(What’s Left of) Our Economy: Trump & Workers, by the Numbers

Tags

blue-collar workers, construction, healthcare services, Helaine Olen, inflation adjusted wages, Jobs, manufacturing, mining, real private sector, real wages, regulation, Steven Greenhouse, subsidized private sector, The Nation, The New York Times, Trump, unions, wages, workers, {What's Left of) Our Economy

Since Donald Trump first declared his presidential candidacy, he’s been dogged by charges that he’s a phony populist, and that his working class supporters have long been hoodwinked by his promises of restoring factory and other blue collar jobs and living standards. And this past Labor Day inspired the President’s critics to double down, as evinced by this piece by long-time labor reporter Steven Greenhouse in The New York Times and this one by economist Helaine Olen in The Nation.

So it seems appropriate for RealityChek‘s slightly delayed analysis of the latest monthly jobs report to include some data bearing on these questions. The verdict? Whatever anti-union and deregulatory measures the Trump administration has backed, its first months in office overall have been just about as good for blue-collar industries and blue-collar employees as during the latest comparable period during the supposedly worker-friendly Obama administration.

First, the manufacturing highlights of last Friday’s August jobs report:

>August saw the best month of net new job creation in U.S. industry since August, 2014 (36,000 in each month.

>Although the August and July totals are still preliminary, their combined sequential employment increase of 62,000 was the highest such figure since the 68,000 improvement in December, 2011 and January, 2012. This back-to-back total reduces the odds that the August numbers are a fluke.

>On a year-on-year basis, manufacturing’s August gain of 138,000 contrasts strikingly with the 5,000 net job loss in industry between the previous Augusts. In fact, this new annual advance was manufacturing’s strongest since the 139,000 yearly gain in August, 2015.

>Reenforcing this conclusion are the strong upward revisions for monthly manufacturing job growth in June (from an upwardly revised 12,000 to 21,000) and for July (from 16,000 to 26,000)

>Manufacturing has now regained 1.027 million (44.79 percent) of the 2.293 million jobs it lost from the onset of the last recession (at the end of 2007) through its jobs bottom in February and March, 2010.

>Yet manufacturing employment is still down 9.21 percent since the downturn’s beginning. During that period, overall private sector employment is up by 7.23 percent.

>Manufacturing’s wage performance, however, slumped notably in August. Pre-inflation wages sank sequentially by 0.56 percent – the worst such drop since May, 2012’s 0.63 percent.

>It’s true that manufacturing wages have been volatile this year, with July recording a strong month-on-month gain of 0.53 percent. But the yearly August manufacturing wage rise of 1.76 percent not only trailed the previous August-to-August rise of 2.68 percent. It was also the smallest annual increase since July, 2015’s 1.57 percent.

>By contrast, August current dollar wages in the private sector overall were up by 0.11 percent sequentially and 2.53 percent year-on-year. The latter total was just slightly below the 2.55 percent increase achieved between August, 2015 and August, 2016.

>Since the current recovery began, in mid-2009, pre-inflation manufacturing wages have risen by only 15.25 percent total. For the private sector overall, they’ve increased by 19.20 percent.

>As a result, the gap between private sector pre-inflation wage increases and those gains in manufacturing stood at 20.57 percent in August. One encouraging development for manufacturing workers: Last August, the gap was much wider: 27.92 percent.

>On an after-inflation basis, manufacturing’s wage performance remains mixed compared with the rest of the private sector. The latest data are from July, and show a monthly gain of 0.37 percent for manufacturing workers and 0.19 percent for the private sector overall – barely half as much.

>Year-on-year, however, manufacturing’s real wage gains slightly lagged those of the private sector in toto in July – 0.74 percent versus 0.75 percent.

>And the gap is even wider during the current recovery – inflation-adjusted wage gains of only 1.96 percent for manufacturing workers during this more than eight-year period, versus an improvement of 4.75 percent for the entire private sector.

But what about the Trump-Obama comparison? Here are the main numbers, using February as the first plausible month of “Trump-onomics”:

>From this past February through August, total net new U.S. job creation is up by 0.66 percent, versus 0.83 percent from last February through last August – the final such period during Mr. Obama’s presidency. So score one for the previous administration? Maybe. But the economy is also deeper into the recovery, and just about at the official definition of full employment. So it’s natural that job-creation should slow down some.

>Interestingly, the difference is much smaller when looking at private sector job creation. Last February through last August, it grew by 0.84 percent. During the comparable Trump period, it’s increased by 0.79 percent. That’s one sign that the Trump employment performance has been healthier, and therefore more sustainable, because it’s been more private-sector driven, than the late Obama version.

>This difference becomes even more pronounced when looking at trends in the subsidized private sector – those industries traditionally considered private sector (notably healthcare) that nonetheless depend heavily on government subsidies. Hence my decision to place them in a separate category.

>So far this year, under President Trump, subsidized private sector jobs have indeed increased strongly – by 0.95 percent. But that’s a much slower rate of growth than the 1.29 percent recorded during the comparable Obama months.

>As a result, employment growth in the “real” private sector has been faster under Mr. Trump – by 0.76 percent to 0.74 percent – and this, again, despite the arrival of full employment.

>Continuing sector by sector, the statistics show that the some of the biggest employment gains during President Trump’s tenure have taken place in blue-collar heavy industries that performed poorly during the comparable final Obama period.

>Principally, net employment from this past February through August is up by 0.83 percent in manufacturing, by 4.96 percent in mining and logging, and by 0.68 percent in construction.

>The comparable Obama administration numbers: -0.27 percent, -6.90 percent, and +0.63 percent, respectively.

>More broadly, blue-collar employment throughout the entire economy (defined by the Bureau of Labor Statistics as production and non-supervisory workers) has increased at the same pace during the two time periods in question (0.70 percent), though in absolute numbers, the Trump administration gains are a bit larger (714,000) than the corresponding Obama administration advances (701,000) – again, despite the arrival or near-arrival of full employment.

>Where blue-collar workers fared better so far during the Obama period than during the Trump period is on the wage front. But they haven’t fared massively better.

>For all private sector production and non-supervisory workers, pre-inflation wages were up by 1.36 percent during those Obama months, and 1.19 percent during the Trump months.

>The same trends have been visible in the blue-collar industries. During the Obama months in 2016, current-dollar wages rose by 1.78 percent in manufacturing, 0.82 percent in mining and logging, and 2.60 percent in construction.

>The Trump results? 1.26 percent, 0.87 percent, and 1.98 percent, respectively.

>In other words, the only blue-collar sector in which blue-collar workers have outperformed under President Trump has been in the mining sector – which has seen by far the biggest employment outperformance.

Of course, the Trump administration is still pretty young, and any or all of these trends could change, and change dramatically, in the months ahead. But until they do, it’s clear that Mr. Trump’s presidency has neither devastated the workers who supported him so ardently or made their lives Great Again. And any analysts denying that the truth so far lies somewhere in between – including the administration’s own grandstanders – have some explaining to do.

(What’s Left of) Our Economy: With the Fed Seemingly Set to Tighten Again, Real Wages are in Recession

Tags

BLS, blue-collar workers, Bureau of Labor Statistics, Federal Reserve, Great Recession, inflation-adjusted wages, manufacturing, real wages, recovery, Trump, wages, {What's Left of) Our Economy

If you had any doubts that American workers are experiencing a dramatic slowdown in inflation-adjusted wages, the newest figures on this pay indicator just put out by the Bureau of Labor Statistics (BLS) should emphatically dispel them. In fact, they make clear that the nation is now stuck in a technical real wage recession – meaning that constant dollar hourly wages have fallen on net for at least two straight quarters. Moreover, when looking over the last two years, the worst results have been registered in price-adjusted hourly pay for blue-collar workers.

Keep that in mind if the Federal Reserve, as expected, announces a new tightening of monetary policy this afternoon, in large measure because the U.S. labor market supposedly has healed the wounds suffered during the Great Recession and the historically weak recovery that followed it.

For all private sector workers and for manufacturing workers, constant dollar hourly pay is down 0.19 percent since last March. And for blue-collar workers in these swathes of the economy, the story actually is slightly worse. Production and non-supervisory employees in the private sector overall have seen their after-inflation hourly pay fall by 0.33 percent since last February. For their counterparts in manufacturing, real wages are down 0.12 percent since December, 2015. (Government workers’ wages aren’t tracked by BLS, because they’re set largely by politicians’ decisions, not by market forces. Therefore, they tell us little about the economy’s fundamentals.)

And the new real wage figures add to the evidence – presented at RealityChek last month – that increases in such take-home pay adjusted for prices have slowed dramatically over the last year.

Here are the new numbers for all private sector workers:

February, 2014-15: +2.03 percent

February, 2015-16: +1.33 percent

February, 2016-17: 0 percent

And the new results for private sector production and non-supervisory workers:

February, 2014-15: +2.15 percent

February, 2015-16: +1.77 percent

February, 2016-17: -0.33 percent

Here are the figures for all manufacturing workers”

February, 2014-15: +1.33 percent

February, 2015-16: +1.32 percent

February, 2016-17: +0.09 percent

And finally, here are the new data for blue-collar manufacturing employees:

February, 2014-15: +1.90 percent

February, 2015-16: +1.75 percent

February, 2016-17: -0.57 percent

In fact, the only piece of good news in the new BLS report is that the January and February real wage figures are still preliminary. But unless they see unprecedented upward revisions, or constant dollar wages enjoy a strong rebound in the next few months, expect the real wage numbers to start turning up the political heat both for a Federal Reserve that’s apparently thinking “Mission Accomplished,” and a president apparently convinced that his mere election is speeding up the recovery.

(What’s Left of) Our Economy: New Wages Data Shed Light on Trump’s Rise

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blue-collar workers, inflation-adjusted wages, Labor Department, manufacturing, recovery, wages, {What's Left of) Our Economy

January is becoming one of my favorite months, and for this winter-hater, it has absolutely nothing to do with the weather. Instead, it’s when we start getting at least preliminary economic data for the previous full-year, and the results can be eye-opening – as yesterday’s government figures on inflation-adjusted U.S. wages once again show. In fact, they do a great job of illustrating why the nation’s subpar economic performance contributed to Donald Trump’s rise to the presidency.

Not that they’re the only downbeat figures in this latest data set. But these are the numbers that in my view make the case most vividly:

>Accounting for inflation, wages for private sector workers in toto have gone exactly nowhere since March. (Government workers are left out of these statistics because their wages are determined overwhelmingly by politicians’ decisions, not economic fundamentals.)

>For production and non-supervisory workers, the story is even worse. After inflation, their wages have actually gone down since February – by 0.22 percent.

>Manufacturing workers as a whole have seen their inflation-adjusted wages drop since May – by 0.18 percent.

>Blue-collar manufacturing workers did a little better – their real wages have simply been flat since February.

Only a little less bleakly, the last two years have seen a major deceleration in price-adjusted wage growth. Here are the numbers for all private sector workers:

2014-15: +1.92 percent

2015-16: +0.85 percent

And the results for private sector production and non-supervisory workers:

2014-15: +2.24 percent

2015-16: +0.55 percent

The figures for all manufacturing workers”

2014-15: +1.90 percent

2015-16: +1.21 percent

And finally, for blue-collar manufacturing employees:

2014-15: +2.25 percent

2015-16: +0.81 percent

It’s true that even this dreary situation represents an improvement over the early years of the current recovery – when real wages generally were falling. But since economic growth resumed in America in mid-2009, real wages have barely budged. Here are the increases:

Overall private sector workers: +3.78 percent

Overall non-supervisory and production workers: +3.96 percent

Overall manufacturing workers: +1.21 percent

Overall manufacturing non-supervisory and production workers: +0.81 percent

Glass half-full types can say that at least workers to varying if small degrees have kept ahead of the cost of living. Glass half-empty types can point out that these gains have been stretched out over seven and a half years. No one should have great difficulty understanding why so many voters this year weren’t especially grateful.

Im-Politic: Economy/Election Poll Shows Surveys’ Strengths and Weaknesses

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2016 election, blue-collar workers, Cato Institute, consumer confidence, Democrats, Donald Trump, economy, Financial Crisis, Great Recession, Hillary Clinton, Im-Politic, Jobs, millennials, minorities, polls, recovery, Republicans, students, The Conference Board, TPP, Trade, Trans-Pacific Partnership

I was going to start off with today a post-mortem on last night’s presidential debate but decided to wait until we get what are billed as the complete TV ratings – which are scheduled to be released later today. In my view, until we get the first reliable polls, these will be crucial to answering the question of who won in the all important minds of the voters (as opposed to the chattering classes). I’ll explain what I mean in that post, so stay tuned!

In the meantime, I was really struck by the results – and the interpretations – of a new poll on how Americans view the high profile issues of the economy and trade. All else equal, at this point, these seem to be the main determinants of both the upcoming presidential and Congressional election results.

The survey was commissioned by the publication Politico and the Harvard University school of public health. (Go figure!) And when it comes to Americans’ assessment of the country’s performance since the financial crisis peaked in 2008, the findings look like good news for Republican presidential candidate Donald Trump. That’s no major surprise. What was more unexpected was how bipartisan the downbeat views are, and how that finding was soft-pedaled in the summary article.

Respondents were asked whether they thought that the U.S. economy had gotten “better” since the downturn in 2008, “worse,” or “stayed the same.” “Better” won with a 41 percent plurality, “worse” came in at 32 percent, and “stayed the same” was the answer of 24 percent. So that seems fairly encouraging for Democratic presidential nominee Hillary Clinton, who served in the administration that’s been responsible for the economy since 2009. At least, it seems, there’s no mass political uprising brewing against the Obama record.

But think about 2008. That wasn’t the run-of-the-mill “downturn” suggested by the poll’s bland wording. That was perfect economic storm time, a period when the Lehman Brothers bankruptcy in particular nearly triggered a global financial and economic meltdown. In addition, the second half of the year in particular was also a time when Americans were losing not only their jobs but their homes in droves. So one in four respondents seeing no change since then is stunning enough. Even more so is the belief of nearly one in three that matters are worse.

Nor should you put too much stock in the article’s claim of “a clear partisan split on this question” with Democrats more upbeat than Republicans. It’s true that 67 percent of Democrats (versus only 21 percent of Republicans) perceived an improving economy since 2008. But 32 percent saw the situation just as bad or worse than during that crisis period. Just as important, a total of 62 percent of independents gave the expansion (which technically began in mid-2009) that kind of lousy grade.

The big questions that still arise, though, from these findings:

>How do Americans perceive their own economic and financial circumstances, as opposed to the country’s? Usually they feel much better about their own lots, and the latest Conference Board consumer confidence survey supports that proposition. It just hit a nine-year high.

>Which of these judgments will matter more in the voting booth?

>Will Americans who are down on the economy place more trust in Trump or Clinton to set things right?

>How will these and other economic poll results break down by state – which of course will influence the all-important Electoral College count?

Meanwhile, the Politico-Harvard survey produced several important results on the trade policy front. First, it found that although only 29 percent of the public has heard of President Obama’s Trans-Pacific Partnership (TPP), the Pacific Rim trade agreement that’s currently before Congress, 63 percent of those familiar with the agreement oppose it. And 68 percent disagree that Congress should vote on the matter in a lame-duck session of Congress – which the president is pushing for.

At the same time, such trade soundings have been all over the board lately – see this poll released a little earlier from the Chicago Council on Global Affairs for some contrasting results.

Much more interesting to me was the genuinely partisan split – which both surveys found. As Politico described it, Americans who call themselves Republicans have swung not only to being sharply critical of U.S. trade policy, but decidedly more critical than self-identified Democrats.

In GOP ranks, the Politico-Harvard poll found that 47 percent of respondents said that free trade agreements have hurt their communities and fully 85 percent called them net job killers. The comparable results for Democrats? Only about 25 percent and 50 percent.

My big takeaway here: “The party of the common man” may now be a misnomer for the Democrats. And interestingly, an analyst from the Cato Institute, which disagrees with nearly all my views on trade policy and even politics, concurs. He told a Politico reporter that the trade shift 

“might also reflect a shift in party affiliation among voters [especially among] ‘less-educated white males, blue-collar folks who probably used to support Democrats, but who are now Republicans. For cultural reasons, I think they are more prone to subscribe to the characterization of trade that Trump likes to use, the sort of nationalist view of us versus them.’”

Conversely, more and more Democrats look to be college students and other younger Americans (who have relatively limited experience in the job market or who take more cosmopolitan views of the global economy); government employees and workers in low-wage service industries (who face no foreign competition); and minority citizens (who have never been terribly active on the trade front but who should be).

Of course, polls shouldn’t be taken as gospel, especially this year – even when they agree. But if you look at enough of them, and read a bit between the lines, you’ll probably wind up more informed about American politics, not less. So I’ll be keeping an eye on them for the rest of this campaign – and you should, too, if you’ve got the time.