Winners in Obama’s US are still riding high

While Friday’s jobs report was strong, a look through the details of the report shows that the same people who won in President Barack Obama’s America are the ones winning in the early months of President Donald Trump’s. Without policy proposals, currently lacking from the White House or Congress, that specifically target the types of voters who elected Trump, it’s hard to see why this will change.
Whether you look at the numbers over the past month or the past year, the pattern is clear — the vast majority of employment gains have gone to well-educated and nonwhite workers. In February, workers who were 25 and over and had earned at least a bachelor’s degree gained 573,000 jobs. All other education classes lost 121,000. Over the past year, those with at least a bachelor’s degree gained just over 1.6 million jobs. Those at lower education levels lost 330,000.
Turning to race and ethnicity, Hispanic workers gained 304,000 jobs in February, part of an annual gain of 539,000. White workers (including Hispanic whites) added 429,000 jobs in February and 282,000 over the past year.
This means that employment of non-Hispanic whites has actually fallen over the past year, presumably contributing to the frustration of that key Trump constituency in the November election. The proportion of white men who had jobs or were seeking them fell by 0.1 percentage points in February and has fallen 0.3 percentage points over the past year.
This poses a messaging and policy challenge for an administration seeking to improve the fortunes of struggling communities and individuals that feel left behind. The overall economic trends have been solid for years, and barring a policy error like an excessive interest-rate increase from the Federal Reserve, should continue strongly for at least several quarters to come.
Yet if the employment winners continue to be fast-growing metro areas in the South and West, plus wealthy, well-educated urban communities in the Northeast and Midwest, then the Trump economy will look more or less like the Obama economy. Presumably, that won’t sit well with the angry parts of the 2016 electorate that voted for change.
And at the moment, looking at the policy proposals in the works, it’s hard to see why that will change. The key features of the Republican health-care bill being debated by Congress entail increasing costs on older Americans and reducing coverage for poorer Americans to finance a large tax cut for the wealthy. Many Republicans ranging from conservatives in the House to moderate Republican governors are asking for changes and delays. Meanwhile, other parts of the GOP agenda that could conceivably help the Trump constituency, like tax reform and infrastructure spending, seem likely to slip to later in the year or 2018.
One potential glimmer of hope for struggling communities is what might be beginning to happen at the state level. In California, Republicans continue to lose ground in wealthy, well-educated communities. That means that within the California GOP, rural voters are becoming more prominent. And for those communities, rural poverty, rather than tax cuts, are a bigger economic priority.
Last week, Republican leaders in California said their focus is going to be more on poverty than it has been in the past. In Georgia, where Republicans are also losing ground in well-educated, wealthy suburbs, Republican House Speaker and potential 2018 gubernatorial candidate David Ralston has announced his support for the creation of a caucus of rural legislators who would be tasked with rural economic development. In time, that local momentum may filter up to state and national agendas for the new Trump-led Republican Party, reorienting the party’s fiscal agenda around rural concerns rather than upper-income tax cuts.
But for now, perhaps the biggest surprise of the early days of the Trump administration is how little seems to have changed in both the economy and the economic ideas coming out of the Republican Party in Washington. Well-educated and nonwhite workers in fast-growing and wealthy urban areas are capturing the lion’s share of economic gains, and Republicans have an economic agenda focused on tax cuts for the rich, with stagnant, struggling communities benefiting neither from long-running economic trends nor fiscal policy.

— Bloomberg

Conor Sen is a Bloomberg View columnist. He is a portfolio manager for New River Investments in Atlanta and has been a contributor to the Atlantic and Business Insider