We need to be well-versed in the realities of our economy as we move into the 2020 Election. Trump and other Republicans will be distorting reality and claiming credit for a thriving economy. Thanks to a recent Washington Post Finance column, here are some facts to keep in mind.
Median Household Income
In nominal terms, median household income is hitting new highs, topping $63,000 last year, according to Census Bureau figures. But that mark comes with two important qualifications. First, after adjusting for inflation, the number has barely budged in the past 20 years. “On an inflation-adjusted basis, American families are earning just 2.7% more than they did in 1999 when median household income stood at $61,526, or 2007, when the median household income was about $61,000,” per CBS News’s Aimee Picchi.
Here’s the 20-year history in chart form:
If people feel like they are not getting ahead, their feelings are based in fact.
Also, the median number obscures an important fact about the distribution of the gains. Perhaps ironically, recent economic winners are concentrated in Democratic Congressional districts, where “college degrees and professional jobs are plentiful — and the economy is thriving,” the Wall Street Journal’s Aaron Zitner and Dante Chinni write. Republican districts, by contrast, “hold a growing share of jobs in low-skill manufacturing, agriculture, and mining — sectors that often do not require college degrees and which offer lower pay. Median household income and GDP have fallen in these districts, compared to the House districts Republicans represented a decade ago.”
The jobless rate for African-Americans
Unemployment percentages for African-Americans are at historic lows. But it’s important to note this is a continuation of a long-time trend. And, looking at another measure of well-being often used by Trump — median household income — African-Americans are worse off than at the end of the Obama administration. “The median income last year for a black household was $40,258, according to the Census Bureau,” AP’s Calvin Woodward and Hope Yen wrote. “That’s below a 2000 peak of $42,348 and also statistically no better than 2016.
Here’s the trend line for African-American unemployment. Note that the big downward slope begins in 2010:
“Trillions of New Value in the Economy”
This is an assertion Trump often makes at rallies and pressers. He’s probably referring to Gross Domestic Product (GDP) increases. At the beginning of his presidency, he predicted a 6 percent growth in GDP per year (an astronomical number historically). In fact, “so far [GDP]averaged in the mid-2 percent range and looks to be slowing as the boost from his tax cuts wane and the trade war weighs on businesses, according to WAPO.
Stock Market Performance
Trump often reminds us how well our 401(k)s are doing (for those of us lucky enough to have retirement savings). The Dow has risen 35.5 percent since Trump took office. During the same time period in Obama’s first years, the market rose 48.5 percent.
Trump repeatedly says China is paying the tariffs that his administration has imposed on imports from the country. In fact, American businesses bringing in those goods and the American consumers buying them are paying the import taxes. Now that Trump has backed off some of his threatened tariff increases (until after Christmas purchases), he’s moved into negotiation mode with China. But his negotiations appear to be getting us just back to where we were before the trade war started — after huge losses to American agriculture. Bloomberg.