Assembly line worker Lashunta Harris applies the Ford logo on a new F-150 truck being assembled at the Dearborn Truck Plant in Michigan in April. — AP Photo/Carlos Osorio, File
Former President Donald Trump’s proposed economic policies will hurt average American workers, according to economists who have closely examined his plans.
Trump is promising a stronger economy and routinely slams the Biden/Harris administration’s record although U.S. economic conditions are good by most measures. The exception is inflation, which is improving but will become worse under the policies proposed by Trump.
Overall, the economy under Biden has been good.
“Unemployment is low. Job growth is booming. Infrastructure projects are underway,” points out Stephen J. Farnsworth, associate professor of political science at Mary Washington College. “Inflation is much lower than it was earlier in Biden’s term and individual retirement accounts are flush thanks to large stock market gains,” Farnsworth adds.
The U.S. economy added 206,000 jobs in June, the Bureau of Labor Statistics reported. The unemployment rate moved a little higher, up 0.1 percentage points to 4.1%, marking the first time since November 2021 that the jobless rate was above 4%.
Trump is making a concerted effort to win over Black voters — in part by making inaccurate claims on his record concerning jobs.
“We achieved the lowest African-American unemployment rate and the lowest African-American poverty rate ever recorded — during my four years,” Trump said at a predominantly Black church in Detroit.
“Trump’s claims about having achieved the lowest Black unemployment rate and poverty rate ever recorded were true when he made them before Biden took office, but they are not true today. Both of the record lows set during Trump’s presidency were surpassed by new record lows during Biden’s presidency,” reports CNN.com.
The record low for the Black or African-American unemployment rate, 4.8%, was set under Biden in April 2023. That beat the Trump-era low that was a record at the time, 5.3% in August 2019 and September 2019.
In a 90-minute, wide-ranging rambling speech accepting the Republican presidential nomination, Trump distorted facts on the state of the economy under his presidency. The Associated Press examined some of those claims.
TRUMP: “We had the greatest economy in the history of the world.”
THE FACTS: That’s far from accurate. The pandemic triggered a massive recession during his presidency. The government borrowed $3.1 trillion in 2020 to stabilize the economy and Trump left the White House with fewer jobs than when he entered.
But even if you take out issues caused by the pandemic, economic growth averaged 2.67% during Trump’s first three years, which is pretty solid. But it’s nowhere near the 4% average during Bill Clinton’s two terms from 1993 to 2001, according to the Bureau of Economic Analysis. In fact, growth has been stronger so far under Biden than under Trump.
Trump did have the unemployment rate get as low as 3.5% before the pandemic, but the labor force participation rate for people 25 to 54 — the core of the U.S. working population — was higher under former President Bill Clinton. The labor force participation rate has also been higher under Biden than Trump.
Trump is campaigning on a pledge to reduce inflation but his economic policies to raise tariffs (a tax on imported goods), corporate tax cuts and mass deportation of immigrants are likely to increase inflation, according to many economists.
Economists point out that tariffs effectively act as a consumption tax, increasing the cost of goods imported into the U.S. Businesses typically pass those costs on to consumers.
Trump has suggested a 10% across-the-board tariff on all U.S. imports, as well as a whopping 60% tax on products from China.
If Trump’s proposed tariffs are enacted, the typical middle class household in the U.S. would face an estimated $1,700 a year in additional costs, according to the nonpartisan Peterson Institute for International Economics.
Because they spend a large share of their money on goods and services, low- and middle-income households would feel the impact of higher tariffs much more than wealthy families.
“The burden of it is very unequal,” said Julia Coronado, founder of MacroPolicy Perspective and a former Fed economists, told CBS MoneyWatch.
Trump and the Republican Party are proposing a mass deportation of millions of immigrants, an action that could disrupt the economy and labor market, according to economists. His polices would accentuate labor shortages that already exist in some parts of the economy, including agriculture and construction.
“Deporting people is going to be a hit to both demand and supply — you would deport people who are working and spending money in the economy, so growth will slow,” Coronado said.
Trump has promised to reduce inflation.
Inflation is a key concern for voters and is a major factor for Biden’s low approval ratings.
Pandemic-related supply chain issues, rapid economic resurgence and the war in Ukraine, which contributed to higher food costs, largely caused inflation to spike around the world. But inflation has fallen sharply from a peak of 9.1% in June 2022 to just above 3.1%.
Trump and congressional Republican policies will make inflation worse.
If Republicans sweep Congress and Trump is reelected with his proposed policies of higher tariffs and mass deportations, inflation would rise from roughly 3% this year to 3.6% in 2025, which in turn would prompt the Federal Reserve to hold interest rates, rather than reducing them, according to a recent study released by Moody’s Analytics.
“The Federal Reserve, which is focused on labor costs and inflation, may feel compelled to resume its rate hikes, or at the very least wait longer to cut rates. Recession becomes a serious threat once again,” Moody’s economists wrote.
Here’s the bottom line. Trump’s proposals will hurt low- and middle-income American workers and the overall economy. His policies will hurt both consumers and businesses and could push the economy into a recession.
Trump’s bad economic plan is another reason for Americans to vote against him in November.
— This editorial is part of an occasional series on why Americans should vote in November.
Reprinted from the Philadelphia Tribune