Donald Trump’s deal to keep 800 Carrier workers in Indiana is not a broad-spectrum jobs policy — though if the $7 million, 10-year price tag reported by The Wall Street Journal summarizes the deal’s full fiscal cost, it looks like it may have been a pretty good value, at just $875 per year per job not moved to Mexico.
But the narrow deal also reflects something Trump understands about the broad politics of jobs that few national politicians in either party have managed to grasp.
Over the last couple of decades, wage growth has lagged behind economic growth, and participation in the labor force has declined. These are our core economic challenges.
In that environment, Trump has focused much of his economic messaging on one correct core idea: What most people want is to be able to comfortably support themselves and their families with the income from a job that pays steadily rising wages. And he’ll work hard to make that goal a reality for more Americans — including by bullying and bribing companies into keeping jobs in America.
The idea that good-paying jobs are the central goal of economic policy may sound uncontroversial, even trite — but it’s a significant departure from standard Republican and Democratic messaging on the economy.
Other Republicans have not gotten this right
Consider the two phases of pre-Trump Republican economic messaging during this century.
President George W. Bush promoted an “ownership society” in which ordinary people got to enjoy the rising fortunes of capital through their ownership of assets.
The problem with this idea was that most people are not rich and therefore cannot derive a large share of their income from returns to capital. They have to work for a living.
Bush’s tax cuts on capital gains and dividends accrued overwhelmingly to the rich. His proposal to shift Social Security retirement savings into stocks was unpopular because of the increased risk it would have exposed retirees to in exchange for higher returns.
In practice, the main way middle-income Americans participated in Bush’s ownership society was by leveraging their homes. We all know how this worked out, and why Republicans stopped talking about investment as the path to middle class prosperity after 2008.
As the labor market sputtered after 2008, Republicans shifted to apportioning blame partly to the government — which allegedly burdened business owners with so much tax and regulation and “uncertainty” that they stopped hiring workers — and partly to “takers” who don’t really want to work because they receive excessively generous government benefits.
This message offered a prescription for job creation that was condescending and unconvincing, and it didn’t address the wage growth question at all.
Some Republicans pushed back against this rhetorical approach — Rick Santorum, for example, argued that Republican paeans to entrepreneurship fall flat because most people want to work for a living rather than run their own business — but Trump was the party’s first recent nominee to understand why it didn’t work.
Associated Press/Steve Helber
Democrats have not gotten this right, either
Of course, Democrats talk constantly about the importance of creating good, middle-class jobs. But over the last eight years, their economic agenda has focused much more on uplifting the poor than strengthening and employing the middle class.
It is not surprising that a lot of voters with moderate incomes — say, two parents supporting a family of four on $60,000 a year who would feel a lot more comfortable with $70,000 — would look at the Democrats’ agenda and see it as unrelated to their interests.
As Mother Jones liberal writer Kevin Drum wrote in 2014:
“Democrats do plenty for the poor. They support increases in the Earned Income Tax Credit and the minimum wage. They support Medicaid expansion. They passed Obamacare. They support pre-K for vulnerable populations. They expanded the Children’s Health Insurance Program. But virtually none of this really benefits the working or middle classes except at the margins.”
None of these economic policies relate directly to the problem of middle-class job creation or wages. They read to a lot of voters as “benefits for somebody else, financed with my taxes.”
When Democrats have talked about ideas for middle-class job creation, they have tended to focus on: fiscal stimulus, which was blocked by Republicans in Congress after 2011 and is now close to moot as the economy approaches full employment; ideas too obtuse for most voters to view them as important to their personal fortunes (vocational education, “advanced manufacturing initiatives”); or infrastructure spending.
Maybe Democrats should have made a bigger political issue of Republicans’ opposition to infrastructure spending over the last few years. But in 2016, Democrats were running against a Republican promising an even bigger infrastructure package than they were.