In the alternative reality Donald Trump inhabits, he inherited an economic mess from the Obama administration. So when the Bureau of Labor Statistics releases the first monthly report of his presidency saying that the economy added 235,000 jobs and the unemployment rate ticked down a bit to 4.7% — of course he is going to take credit for his great success by retweeting this from the Drudge Report:
We’re all supposed to forget the lies he told for months disparaging previous BLS reports and saying that the real unemployment rate was 42 percent with 94 million adults unemployed. To demonstrate that it was all a bold-faced lie, Sean Spicer made a joke about it in his press conference today.
— CNBC Now (@CNBCnow) March 10, 2017
The catch is that when someone creates their own reality divorced from facts, they are likely to miss the things they’d rather not see. So Trump probably isn’t paying attention to the fact that we are getting awfully close to full employment. Here’s what Krugman tweeted about that:
The fact that US probably close to full employment now means slow job growth over next few years, which is actually bad for Trump
— Paul Krugman (@paulkrugman) March 10, 2017
Beyond the fact that job growth is likely to slow down in the coming months, full employment will mean that the focus finally shifts from job creation to wage growth. Here’s what Jared Bernstein wrote about that today:
Speaking of wages, the pace of growth of workers’ paychecks is sending a signal that the tightening job market is providing workers with a bit more bargaining clout. In tight labor markets, which have been the exception in the US job market in recent decades, employers typically must bid compensation up to get and keep the workers they need.
We’ve already seen some of this dynamic in recent job reports…From about 2010 to 2015, average hourly wages grew at about 2 percent, year-over-year. But around mid-2015, as unemployment hit 5 percent, heading for rates with a ‘4’ handle, wage growth accelerated. It held at around 2.5 percent for a few months, but…has accelerated further in recent months, increasing 2.8 percent in February.
What would be a perfect boost to wage growth right now? An increase in the minimum wage. Right on time comes this report from the Economic Policy Institute about where wages are increasing faster than the national average:
Making that a national trend would be a huge boost for the people the president and his chief strategist call “the forgotten man.” But of course that isn’t going to happen. I’ve always wondered where those voters were when Trump said this in the first debate of the Republican primary.
Yes…in response to a question about the minimum wage, Donald Trump said that “wages are too high.” Over the course of the campaign, his handlers made sure that statement was muddied up a good bit. Eventually he said that he was sympathetic with those who had to try to live on $7.25/hr, but we should leave the minimum wage up to the states. In other words, after a short bout of going with what he honestly thinks, Trump wound up sounding just like any other Republican politician — leaving the forgotten man out in the cold.