Analysis: Trump's race-baiting might come at a cost to his economy
President Donald Trump's increasingly naked race-baiting heading into the final stretch of the 2020 campaign suggests he shares the consensus explanation for his grip on White working-class voters: it's about their racial resentments, not their economic anxieties.
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(CNN)President Donald Trump's increasingly naked race-baiting heading into the final stretch of the 2020 campaign suggests he shares the consensus explanation for his grip on White working-class voters: it's about their racial resentments, not their economic anxieties.
But what if one drives the other -- that is, what if racial resentments actually make the economic problems of blue-collar Whites worse? That's the provocative thesis of a new book on the American economy. And if it's right, Trump's jagged-edged strategy this fall may prove more costly than either supporters or opponents realize.
For the last six months, coronavirus has obscured the core political debate about the 21st century economy. But that debate -- over the inability to deliver broadly-shared prosperity even in good times -- has not disappeared.
The causes of the problem have grown familiar. Technological change, globalization, and the mobility of capital have combined to lift the incomes of skilled, well-educated workers, while devaluing, eliminating or shipping overseas jobs that once afforded middle-class living standards for those without college degrees.
The declining power of labor unions and declining value of the minimum wage exacerbated that working-class erosion. The emergence of China as an economic competitor -- with a bipartisan boost from Washington -- accelerated and deepened its impact. It all has produced an economy that produces fewer middle-class livelihoods and widening inequality of income even as it reliably generates corporate profits.
Less familiar is the factor described by Jim Tankersley in his just-published book "The Riches of This Land." Drawing on decades of economic research, the New York Times correspondent argues discrimination against non-Whites and women historically throttled America's capitalist engine by constricting the supply of talented labor -- and is doing it again now.
The academic term for those costs is "friction," which chafes at the efficiency of the economic marketplace. Among the examples Tankersley cites: in 1960, White men represented 95% of America's doctors and lawyers, but not 95% of those best able to work as doctors and lawyers. The exclusion of those with greater ability degraded the output of both professions.
In the decade that followed, expanded opportunities the civil rights and women's movements yielded led to economic as well as social benefits. Annual growth during the 1960s averaged 4.5%, a level the US economy hasn't seen in a single year over the last two decades.
The tight labor market increased wages faster than inflation, lifting all groups. Large numbers of White and Black men alike rose into the middle class; over time, the pay gap between men and women narrowed. Researchers from Stanford and the University of Chicago last year found that 40% of expanded output per worker since 1960 stemmed from opening the labor force to new talent.
Tankersley laments that progress proved halting. The separate economic forces punishing less-educated workers fueled a divisive political blame game variously targeting affirmative action programs, welfare recipients, immigrants, international trade deals, big business, and presidents of both parties.
"Mass incarceration" policies in response to rising crime rates heightened obstacles for Black men. In 2017, a study by economists at Vanderbilt and the University of Tennessee found the likelihood of young Black men climbing the economic ladder lagged behind that of young White men by as much as it did just after the Civil War.
Recent efforts to limit immigration in the name of shielding those already here carry obvious economic costs; the nation needs more taxpaying workers to finance retirement benefits for aging Baby Boomers. But the political evidence suggests those tensions will worsen as Whites alarmed by cultural change watch themselves become a minority of the population.
The first Black president found that out. Backlash to Barack Obama's breakthrough 2008 election helped cost his party control of Congress -- and cost Obama the chance to win "human capital" investments to boost working-class prospects for all races. Joe Biden now seeks a more expansive version of that agenda.
Trump's agenda hasn't changed much for the "forgotten" blue-collar Whites he publicly champions. Tax cuts and deregulation mostly benefitted the affluent. Trade tariffs and immigration policies didn't stop the manufacturing sector from falling into recession in 2019 -- before coronavirus sent the entire economy into recession this year.
"The United States would be a very different country today if the shared prosperity of the postwar era, the upward talent flow that lifted everyone, had endured for another half-century," Tankersley concludes. He hasn't abandoned hope for a more harmonious and prosperous era.
The Trump White House has not been blind to the costs of discrimination. Marianne Wanamaker, the University of Tennessee economist who documented the lack of economic mobility for generations of young Black men, joined his Council of Economic Advisers soon after publishing that research.
There's no sign it left a mark on Trump. After excoriating Latino immigrants four years ago, he has made Black Lives Matter protestors against police violence his foil for "law and order" appeals to working-class Whites.
The President now warns that desegregation regulations menace American suburbs, rails against racial sensitivity training, and defends symbols of the Confederacy -- and he says systemic racism does not exist.
