In last night’s State of the Union address, President Trump expressed his belief that the state of the union is excellent, pointing to, among other factors, economic growth over the last year, the stock market, and the unemployment rate.
This is a skewed picture, however, leaving out the struggles of tens of millions of Americans, growing economic chasms, and increasing economic and political disunion.
The economy by and large is good only for the more affluent. For vast numbers of people struggling to meet their most basic needs, the economic situation is not getting better and often is getting worse.
Consider these six elements of the state of the union:
- In 2016 (2017 data aren’t yet available) the U.S. poverty rate was 12.7 percent — still higher than before the Great Recession. And nearly one-third of Americans (29.8 percent) lived on incomes below twice the poverty level.
- The 12.3 percent food insecurity rate in 2016 (the share of people in households struggling against hunger) was still higher than any year before the recession.
- Over the last decade, as a whole, real wage growth averaged just 0.5 percent per year. And in the three prior decades, wages stagnated for the bottom half of the population. The last three years have been a bit better — not a lot — but in recent months, according to the Federal Reserve Bank of Atlanta, wage growth slowed. There is a lot of room to catch up on wage growth in order to reduce hunger, poverty, and other elements of economic insecurity, but the pace of growth is far too slow.
- For many, job conditions are bad and worsening: the erosion of the value of the minimum wage, erratic work schedules, sporadic employment, lack of job security, rollback by the Trump Administration of regulatory protections for workers, the absence of paid leave for worker or family illnesses, and the absence of affordable child care are key elements of the poor “state of the union” for working people and their families.
- Public investments (like Medicaid, SNAP, housing assistance, LIHEAP and many others) and regulatory protections to help poor and near-poor people — are under attack in Congress, in the president’s budget, in executive branch regulations, and in the states. As just one example, the Congressional Budget Office estimated that the recently enacted tax law would cause 13 million Americans to lose health insurance under the Affordable Care Act.
- The new tax law does remarkably little in terms of help for the bottom half of families in the short run, and actually increases their taxes and reduces their incomes in the long run. In 2018, the bottom 40 percent of the population benefits from only 6 percent of the aggregate tax cut. By 2027, the taxes for these two bottom quintiles actually rise.
The state of the union is not good for those in the bottom half of the economy. If the concept of the American “union” includes opportunity and fairness for all, everyone having their basic needs met, and a society that is knit together economically in the important ways that matter, that union is not happening: the state of the union for struggling Americans is often worsening, while inequality, polarization, and disunion grow.
There are answers to this. Among them are continued low unemployment; minimum wage increases and real wage growth for lower-paid workers; and work supports and improved public investments through benefit boost and outreach in SNAP, Medicaid, EITC, other tax credits for low-income families, and other proven programs.
In a POLITICO/Morning Consult Poll released right before the State of the Union speech, voters ranked the most important topics for the president to address, including
- improving the health care system;
- addressing the economy and creating jobs; and
- reducing poverty in the U.S.
The public wants these needs addressed, and they must be addressed if we are to see a stronger, healthier, and more productive state of the union.