Honolulu Star-Advertiser

Sunday, April 28, 2024 76° Today's Paper


News

Rebounding economy remains fragile for many

WASHINGTON >> The eye-popping improvement in economic fortunes last year raises the question: If incomes are up and poverty is down, why is Donald Trump’s message of economic decay resonating so broadly?

The answer is in plain sight. While the economy finally is moving in the right direction, the real incomes of most American households are still smaller than in the late 1990s. And large swaths of the country — rural America, industrial centers in the Rust Belt and Appalachia — are lagging.

“We ain’t feeling too much of all that economic growth that I heard was going on, patting themselves on the back,” said Ralph Kingan, the mayor of Wright, Wy. “It ain’t out in the West.”

That bleak reality helps to explain why the good news the Census Bureau issued Tuesday about a rise in household income was greeted gleefully by economists but is unlikely to change the complexion of the presidential race.

The recent upswing is real. While economic growth has been modest, the expansion is in its eighth year. The economy has added millions of jobs, and incomes increased last year for households on every rung of the economic ladder. The gains have been particularly strong for people who live in the nation’s large metropolitan areas and for those who have college degrees.

Yet the repeated assertions by Trump, the Republican nominee, that the middle class is being decimated and that the economy is in decline ring true to his supporters. Many Americans, even those who are prospering, remain pessimistic about the fragile recovery. Hillary Clinton, Trump’s Democratic rival, has been careful to acknowledge the economy’s problems alongside its progress.

The economic dislocations of recent decades may be contributing to the polarization of the electorate, according to research by David Autor, an economist at the Massachusetts Institute of Technology. By emphasizing the nation’s economic troubles, the candidates are going where the voters are.

In a new paper, Autor and three co-authors found that voting patterns had shifted most in the parts of the country that lost the most jobs as a result of increased trade with China. The study, which focused on congressional elections, found that voters in districts with heavy job losses have tended toward ideological extremes, replacing moderates with more conservative or liberal representatives.

“There is this undercurrent of economically driven dissatisfaction that works to the benefit of candidates who are noncentrist and particularly right-wing candidates,” Autor said.

In Wyoming’s coal-rich Powder River Basin, where mines have laid off hundreds of workers in a wave of bankruptcies, workers scoffed at the reports of rising wages and falling unemployment.

Not here, they said.

“We are waiting on the election with high hopes that we do get a Republican in there who does understand about working men and women,” said Mark Perkins, 49, who shut down his electrical storefront in the coal town of Wright this year as he lost once-plentiful jobs servicing mines and large generators.

Perkins said miners and their families had been streaming away from town as the unemployment rate in surrounding Campbell County soared to 7.5 percent in July, from 3.8 percent a year earlier. Families dropped keys on counters and bolted, Perkins said, leaving quiet streets and a deep resentment at the economic policies supported by Clinton and President Barack Obama.

“I’m just doing small electrical jobs to dog-paddle my way through till Mr. Trump gets elected,” he said. “You’re not going to see very many Hillary — or Killary as we call her here — fans. She was so vocal about putting us out of work and putting us down. We’re the scum of the earth.”

Even in regions that are prospering, many workers have seen little wage growth in recent years. The rise in median income was driven mostly by increased employment rather than wage gains.

Cheri Klug, 56, works as a cashier at a Wal-Mart in southern Minnesota, making almost $12 an hour. Her husband, Dave, 62, draws federal disability benefits.

Dave Klug said life seemed to get a little harder every year.

“I see everything increasing except my benefits and my wife’s wages,” he said.

Clinton has proposed an increase in the minimum wage to $12 an hour, which would modestly increase the couple’s income, but Dave Klug said he planned to vote for Trump. He likes the idea of a businessman in the White House, he said.

Moreover, he does not like the idea of a government-imposed pay increase. His wife has spent eight years climbing to her current pay grade, he said, and it wouldn’t be fair for workers who have just joined Wal-Mart to be lifted to the same level.

David Pilot, 56, works as an analyst for a telecommunications firm in Colorado Springs. He said his pay had increased modestly in recent years, by no more than 2 percent a year. Before the recession, he said, he sometimes got 6 percent raises.

Pilot works in the service sector, as most Americans do, but he said he was voting for Trump because of his promises to return industrial jobs to America.

“I like the fact that he recognizes we are playing on an unlevel field,” Pilot said. He added that he did not think globalization had harmed his own career but that he knew other people who lost work when companies moved overseas.

Polls also show that Americans remain pessimistic about the nation’s economic prospects. They are worried that the floor is going to fall out from under them, as it did in 2008.

Last week, 26 percent of people surveyed in Gallup’s poll of Americans’ confidence in the economy rated current economic conditions as excellent or good, while 30 percent labeled them poor. Thirty-seven percent of those surveyed said their economic outlook was “getting better” compared with 57 percent who said it was “getting worse.”

Sheryl Fetzer, 58, who lives in suburban Columbus, Ohio, said she missed the 1990s.

“Everybody was fat in the ’90s,” she said. “Everybody had money. It’s not like that today.”

Not even in her well-groomed suburb?

“The grocery stores are full,” she allowed. “The mall is full. People are spending. You can say things look good. But I think we’re about to have a big crash.”

The gloom is deepest, however, in the regions where the recovery has been weakest.

Sara Flynn, 55, says she is lucky to be living in “God’s country,” otherwise known as Hebron, Ky., but she is still trying to regain her footing since her high-end design business collapsed in 2010 at the height of the recession.

She got a job paying $8.25 an hour as a cashier in a big-box store, working her way up to supervisor at nearly double the salary, but she hated it.

“One day I just said ‘I can’t do this anymore,’” said Flynn, who quit last year. With a degree in architectural design and drafting and contacts in the business, she quickly moved to another job at a kitchen design store but was laid off after six months when business fell off. Having learned how to type on an electric typewriter in high school, she is taking a computer course at the Brighton Family Center, a nonprofit in Newport, Ky.

Flynn has four sons in their 20s. Two graduated from college and two did not.

“The ones with the degrees have really good jobs,” she said. As for the two who have high school diplomas, “Well, they’re still living at home.” One is juggling three different restaurant jobs, while the other works at a pizzeria and turned their yard into a makeshift service center where he fixes cars.

Flynn said her parents were “dyed in the wool” Democrats. Her father worked at GE for most of his life, designing airplanes, before retiring with a pension, while her mother raised six children.

Flynn said she planned to vote for Trump. She said she had liked Trump ever since watching his television show, “The Apprentice,” and she believes him when he says he can “make America great again.”

“That’s a bygone era, that’s when America was great,” Flynn said of her parent’s generation. “It hasn’t been like that for me.”

One response to “Rebounding economy remains fragile for many”

  1. manakuke says:

    Simple solutions for simple minds? Much of America’s greatness came though the sacrifice and hard work of it’s elders. Kennedy’s “Ask Not” speech is just as applicable today as it was then.

Leave a Reply