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Left behind

from David Ruccio

The historically low black unemployment rate is one of Donald Trump’s favorite applause lines. Even Reuters [ht: ja] declares that Trump is right.

It doesn’t seem to matter that most of the decline in the unemployment rate for African American workers (from a high of 16.5 percent in the beginning of 2010 to a low of 6.3 percent today) occurred before Trump was ever elected.

fredgraph (2)

What does matter is that, even as the rate has dropped (the purple line in the chart above), black workers’ pay (the green line) has barely changed. After falling precipitously (by 10 percent, from the end of 2009 to the middle of 2015), it has only increased slightly (by 3.8 percent). Overall, the real wages of black workers have actually declined (by 6.5 percent, between the end of 2009 to today). 

fredgraph (1)

White workers have suffered much the same fate. While the unemployment rate (the red line in the chart above) has declined dramatically (from a high of 9.1 percent at the end of 2009 to 3.4 percent today), white workers’ real wages (the blue line) have been stagnant—rising by only 1.4 percent (from the beginning of 2009 to today).

Today, black workers are earning $19 less per week (compared to their peak at the end of 2009), while white workers take home only $5 more per week (from their peak in the beginning of 2009)—even though the unemployment rate for both groups of workers has reached historically low levels.

fredgraph

Meanwhile, the real beneficiaries of the current recovery—under both Trump and his predecessor—have been the employers of those workers, black as well as white. U.S. corporate profits continue to reach new historical records (soaring 172 percent from their low at the end of 2008, and 35.8 percent overall since the end of 2006).

American corporations are only too happy to hire workers, regardless of race or ethnicity, as long as their profits grow.*

That’s how the U.S. economy works today: the unemployment rates fall to record lows but workers’ pay barely budges. And an increasing portion of the value workers create fills corporate coffers.

In the end, that’s Trump’s real gift—to use everything in his power to direct attention away from the fact that all workers are being left behind.

*And when corporations decide they can’t make enough profits by hiring American workers, they lay them off and relocate production elsewhere. That’s what General Motors just did, eliminating 15 percent of its salaried workforce—destroying some 14,000 jobs—and halting production at five of its North American auto plants. As Christopher Ingrahamexplains,

That combination of unemployed workers and happy investors underscores a key point about the modern American economy: What’s good for corporate profits isn’t necessarily good for workers.

  1. Helen Sakho
    November 29, 2018 at 2:12 am

    There is a colour for each occasion in the melting pot, only the history, the proportions, the rates of the “gift” have never been the same…

  2. November 29, 2018 at 2:31 am

    Objectivity and circumspection are essential in searching for and analyzing data on anything. Operating reasonably is consistently best to find facts and maximize confidence.

  3. November 29, 2018 at 4:23 pm

    Ways that wages could rise: employers could share their profits with their workers; the Fed could use a higher interest rate to allow wages to inflate; minimum wage should be mandated by the Federal Government to be at a livable rate; give a basic income to every living soul; the Fed could give a guaranteed job with a living wage to everyone who wants to work. Easy-peasy!

    • Craig
      November 29, 2018 at 8:54 pm

      “give a basic income to every living soul”

      Or give everyone 18 and older a $1000/mo dividend for their entire adult life and take rational economic and monetary paradigm changing control of the point of retail sale with a 50% discount/rebate policy. Besides the paradigm change all this would do is:

      Immediately end poverty

      painlessly and beneficially integrate price deflation into profit making systems because retail sale is the terminal end of every consumer products economic process and also the terminal expression point for all forms of inflation as well

      enable the elimination of transfer taxes for welfare, unemployment insurance and social security thus simultaneously cutting costs for business and increasing take home pay for individuals

      enable large income tax reductions….as MMT has shown us that except for a relatively small percentage to establish the government’s sovereignty in such matters

      Better cite me for having said these things for the last 5-6 years….when some economist or pol picks them up.

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