How Trump fueled economic inequality in America

How Trump fueled economic inequality in America
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It is difficult to select just one issue that defines President Trump’s legacy. There is his tragic mishandling of the COVID-19 pandemic. There is his alienation of America’s allies. There are even his wars on science and the rule of law. Any of these disasters would provide a suitable byline for the history books.

But we need to add something equally important to this list: Four years after Trump took office, income inequality continues to grow. And it is growing at a faster rate than during any of the last five administrations. 

Inequality certainly isn’t new. Over the last three decades, the share of total U.S. income held by the bottom 20 percent of earners fell steadily. Most households haven’t seen meaningful appreciation in their purchasing power since the 1970s as average wages have barely outpaced inflation.

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These long-term trends gained political traction during the Great Recession. It became popular to refer to the “1 percent,” the group of ultra-rich who now hold more wealth than America’s entire middle class.

By the time 2016 rolled around, it seemed like voters were fed up. Capitalizing on widespread disillusionment with the economy, Trump campaigned on a pledge to do something about it. Among other things, Trump promised to restore America’s ailing manufacturing base and to stand tough against emerging markets that many people blamed for syphoning jobs away from the U.S. economy. The idea was that prioritizing workers would alleviate the pressure on blue-collar America. 

Unfortunately, things have gotten worse, not better.

The numbers are revealing. The distance separating America’s highest and lowest income brackets grew by almost 9 percent annually under Trump. That growth is faster than in previous periods. From 1990 to 2015 growth was about 7 percent — a period that included three recessions. 

That 2 percent difference might sound small. But it matters once we recognize that many households cannot meet their basic needs.

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By 2019, housing was unaffordable for workers in 70 percent of the country. The average family is now far less able to afford homeownership than it was just a few years ago. Almost 30 million people lacked health insurance in 2019. One-quarter of Americans have no retirement savings. And one widely cited report from the Federal Reserve found that 40 percent of the country could not afford an emergency expense of $400.  

The list does not end there. A full 20 percent of American children now live in poverty, a number that increased under the Trump administration. At the same time, education, which is supposed to help overcome these problems, is becoming increasingly unaffordable as tuition outpaces income growth.

Perhaps most strikingly, all of this happened before the COVID-19 pandemic decimated the U.S. economy. Things have gotten worse since then.   

Trump did not create these problems. Inequality has deep, diverse roots. Trump’s failure is allowing them to worsen. Growing inequality is a predictable consequence of key Trump-era policies.

First, he championed the idea of market deregulation and prioritized crony capitalism over national welfare. Look no further than Trump’s dedication to repealing labor regulations. His attack on Obama-era regulations transferred power away from workers and toward firms and diminished the rights of organized labor.

At the same time, redistributive polices have become less progressive under the Trump administration. Taxes are supposed to help make up for wide disparities in income. Yet, it is now clear that tax cuts, sold as a way to stimulate economic activity, favored the wealthiest Americans. 

Then, of course, there’s COVID-19. And history will report what we already know: Trump mishandled the crisis by failing to protect the most vulnerable segments of society. Millions of America’s working poor lost their livelihoods as a result of the pandemic, and government assistance has not been sufficient.

Trump’s supporters may respond that his poor record is President Obama’s fault, and that Trump faced an uphill battle inheriting a broken system. But that argument isn’t convincing. Trump used the White House to launch a dedicated attack on Obama-era policies. Rather than living up to his promise to improve worker welfare, Trump set to undoing basic labor rights.

One might also claim that COVID-19 was an unanticipated shock for which no one was prepared. And it is certainly an unprecedented challenge. But the fact remains that Trump ignored early warnings about the pandemic and failed to mount a coordinated response. 

What we’re left with is a poor legacy for a president who campaigned four years ago on the economy, workers and families. 

Once in office, Trump took every opportunity to tout his record as a businessman and claim credit for record highs on Wall Street. Now it looks like he should have spent more time thinking about Main Street. If he had, there may have been fewer moving boxes laying around the White House this week. 

Jeffrey Kucik is an associate professor in the School of Government and Public Policy and the James E. Rogers College of Law (by courtesy) at the University of Arizona.