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.