President Donald Trump boasts that a robust economy will protect him from impeachment and ensure his re-election, but it’s an argument resting on a shaky foundation.
The middle-class Americans who are the main targets of Trump’s economic pitch aren’t sharing much in the gains of U.S. growth. Worse yet for Trump, wage growth has been slower in the counties he carried in 2016.
That risks blunting his message with the Republican political base just as he’s turning to GOP lawmakers to defend him against an accelerating effort by Democrats to impeach him.
By several measures, middle-class Americans’ incomes have risen more slowly under Trump than during Barack Obama’s final years -- hardly a period renowned for gangbuster pay increases. Workers should finally be getting big raises with the unemployment rate down to 3.5%. Yet while wage growth picked up last year, it is still subdued and slowing again after manufacturing output contracted in the first half of the year.
“That’s pretty disturbing,” said Heidi Shierholz, a senior economist at the Economic Policy Institute, a liberal-leaning think-tank in Washington. “In a labor market with unemployment rates this low, we should see much stronger wage gains.”
Meager paycheck gains undercut the president’s “Make America Great Again” appeal promising better times for middle-class workers who felt left out of the tech and finance boom. The theme has resurfaced in Trump’s impeachment defense. “Impeached for what, having created the greatest economy in the history of our country?” Trump asked in a recent tweet.
That argument is also a pillar of his re-election campaign, as Republicans look to make up for the president’s low job approval ratings and the serial controversies swirling around his administration.
The economy’s overall performance hasn’t changed much since Trump took office, with GDP growth averaging 2.6% versus 2.4% during Obama’s second term. That’s far below Trump’s own forecasts. On Wednesday, the Commerce Department reported the economy expanded 1.9% at an annualized rate in the third quarter, a level that when Obama was president Trump derided as a sign the “economy is in deep trouble.”
While the jobless rate continued to fall during during Trump’s first two years, median household income, adjusted for inflation, grew at an average annual rate of 1.3%. That’s down from a 4.1% annual rate the previous two years and a 1.8% annual rate during Obama’s entire second term, according to U.S. Census data released last month.
Asked about the income and wage data, White House spokesman Judd Deere said Trump’s “policies of lower taxes, deregulation, and fair and reciprocal trade have supported the longest economic recovery in U.S. history with record low unemployment and rising wages.”