A great deal of research, not to mention common sense, shows that working parents often cannot afford food, housing, health care, child care for young kids or college costs for older ones on what they make in low-wage jobs.
In his State of the Union address, President Donald Trump hit hard on a recent Republican talking point on the economy: “Wages are rising fast — and, wonderfully, they are rising fastest for low-income workers, who have seen a 16 percent pay increase since my election. This is a blue-collar boom.”
In fact, although wage growth is up, it’s not unusually high. Combining numerous wage series, so as not to cherry-pick, I find nominal pay growing at 3.2 percent, lower than previous peaks of 3.9 percent in 2007 and 4.5 percent in 2000. By the way, that 16 percent Trump is citing for low-wage workers is before inflation. The buying power of low-wage paychecks, accounting for inflation, is up 9 percent.
But that’s still a solid number, and Trump is right that low wages are rising faster than middle or high wages. The current growth rate, about 5 percent, is the same as it was in the latter 1990s, but it’s true that the comparable values for middle- and high-wage workers are lower, at 3.5 and 4 percent, respectively.
But digging a little deeper into the president’s agenda as it regards low-wage workers reveals a deep hypocrisy. Those in low-wage jobs still rarely earn enough to make ends meet. The trend may be their friend, but their wage levels are often still much too low to meet their needs, especially if they’re trying to support a family. As a result, they require various supports to close the gap between what they earn and what they need, and these are the very supports that the Trump administration is working hard to undermine. It’s doing so mostly through executive orders, rule changes and state guidance, not by legislation.
A great deal of research, not to mention common sense, shows that working parents often cannot afford food, housing, health care, child care for young kids or college costs for older ones on what they make in low-wage jobs. To avoid picking a part of the country with especially high prices, I looked at the Massachusetts Institute of Technology’s basic-needs family budget calculator for Schenectady County, New York, as prices there are around the national average. A living hourly wage there for a single parent with two children is about $36.50. For two working parents, it’s about $26 each. According to the earnings data Trump is citing, even that latter value is more than twice what low-wage workers currently earn (about $11.50 per hour).
It is for precisely this reason that the government has assembled over the years a system of income, nutrition, health and housing supports. Although an interesting debate is brewing about universal-income grants, it is still unquestionably the case that families must work in the paid labor market if they are to avoid privation. Yet the above numbers reveal a pervasive market failure: Low-wage jobs, even in hot labor markets, don’t pay living wages. Research — and once again, common sense among anyone who has ever been poor or worked with the poor — reveals that most able-bodied, low-income people want to work and do work, but steady, remunerative employment can be elusive where they live.
So low-income households often need nutritional support. Yet the Trump administration is aggressively pursuing rule changes (i.e. going around Congress) that could lead to just under 4 million people losing their Supplemental Nutrition Assistance Program (SNAP) benefits.
The administration’s attack on health-care coverage is equally vicious. While it is trying to end the Affordable Care Act and its significant Medicaid expansion and preexisting-condition protections through an ongoing lawsuit, it is also inviting states to seek waivers that will cut Medicaid funding and benefits, and impose new insurance premiums and work requirements on the poor that are already demonstrably failing.
One of the administration’s broadest attacks on low-income households is its effort to reduce the growth of the already inadequate official poverty thresholds. Its plan would artificially lower the count of the nation’s poor, but more profoundly, because benefit receipt is often keyed off poverty status, it’s a stealth way of cutting support.
Another proposed rule change would make it significantly harder for families of color to fight the types of discriminatory housing policies that have supported housing segregation for decades.
The Trump administration’s relentless attacks on immigrants is also germane in this context, as the purpose is to discourage and block such families from seeking the very assistance many immigrant families need, given the low-wage jobs in which they toil.
Note that one reason for the above-average gains of the lowest-wage workers is that 7 million workers in more than 20 states got minimum wage increases. My own work suggests that almost a third of the recent low-wage gains are the result of subnational wage increases. Yet the Trump administration refuses to consider raising the pitifully outdated federal minimum wage of $7.25, now the de facto wage floor in most Southern states.
Finally, team Trump managed to cut taxes to the tune of almost $2 trillion over 10 years, yet not a penny went to boost the premier wage subsidy for low-income workers: the Earned Income Tax Credit. As Trump bragged in his speech, the Child Tax Credit was expanded, but he failed to note that its benefits flow largely to upper-income families with kids. Working parents making minimum wage got a boost of just $75.
I’ve left aside the question of whether presidents deserve credit for economic trends — good or bad — that transpire on their watch. In fact, no matter how much he fantasizes about how horrible the economy was before he got here, Trump’s riding labor-market trends he inherited. Still, any president running for reelection in a strong economy would take credit for it.
That’s why it’s so important for those running against the president to elevate these little-known attacks. Deserving or not, Trump will probably get credit for low unemployment rates pushing up low wages. But his fingerprints are slathered all over a long list of policies that push hard in the other direction, tearing away at the economic security of low-wage families, immigrants and people of color. These folks are working hard for little pay, playing by the rules and trying to get ahead. Meanwhile, the president and his team are also working hard to take away what little these families have, while lavishing trillions on their wealthy donors. If Democrats can’t make loud, impactful noises about this egregious injustice, that’s on them.
Jared Bernstein, chief economist to former Vice President Joe Biden, is a senior fellow at the Center on Budget and Policy Priorities. He wrote this for The Washington Post.