Economic foresight, not nostalgia
Among the many reasons Donald Trump is lagging in the polls is his economic plan — specifically, the misguided attempt to prop up parts of America’s manufacturing and industrial sectors in the unlikely hope of generating millions of good-paying jobs.
It’s a popular fantasy: Countless politicians of both parties, including Trump and Hillary Clinton, are fond of holding photo ops in front of shuttered factories, vowing to somehow coax the empty buildings back to life as profitable, thriving businesses.
But a hard look at the economy tells a very different tale. As the postrecession economy sputters back to life, the fastest growth is happening in service sector jobs — which, contrary to popular belief, pay, on average, nearly as well as the oft-lamented lost factory jobs.
According to the Bureau of Labor Statistics, the average manufacturing job pays $26.16 an hour and the average construction job pays $28.30 an hour. The hourly pay for those old-line jobs isn’t far off from the number for services generally ($25.50) and for transportation and warehousing ($23.65).
Not all service jobs are great, by any means: Baggage handlers at the airports, retail workers and fast-food employees are notoriously and inexcusably underpaid, forced to deal with crummy work conditions and unpredictable schedules.
But we should remember that the decline of factories has been accompanied by a rise in employment in education, health care, transportation and other jobs with decent pay and career potential.
And as economics reporter Binyamin Appelbaum recently pointed out, there are lots more service positions than manufacturing jobs. In 2015, America had 64,000 steelworkers and 820,000 home health aides.
“Next year, there will be fewer steelworkers and still more home health aides, as baby boomers fade into old age,” Appelbaum wrote. “Soon, we will be living in the United States of Home Health Aides, yet the candidates keep talking about steelworkers.”
That imbalance has grave political implications for Trump, who has talked a lot about steelworker jobs, while offering nothing to home health aides except a refusal to raise the minimum wage that many of them earn.
The economic and political math point in the same direction: In an election year, it makes more sense to boost the wages and workplace conditions of 820,000 underpaid workers rather than offer promises and subsidies to 64,000 employees in a sector that is shedding jobs.
Trump is on the wrong side of that equation, which is part of why his poll numbers are tanking.
The core question is what, if anything, government should do to spur growth and job creation. The most popular tools, tax cuts and outright grants, amount to throwing money at business owners and hoping for the best.
Gov. Cuomo tried a version of that with Start-Up New York, an offer to let companies go tax-free for 10 years if they started or expanded a business in designated zones on or near university campuses.
The program was intended to boost employment in upstate New York, but after spending tens of millions of dollars promoting the program, the Cuomo administration this summer quietly acknowledged that only 408 jobs have been created by the program.
Meanwhile, New York City has been on a jobs tear, adding 100,000 positions last year to reach a record 4.3 million jobs. This tracks with a national urban renaissance: Big cities and metro areas currently generate about 88% of all employment in America and 91% of wage income.
Instead of throwing money and tax subsidies at closed factories and sparsely populated regions, candidates at all levels should focus on improving infrastructure, wages and work conditions in the fast-growing areas of the service sector, including retail, health care and education.
Trump and Clinton have both given broad lip service to the idea of investing government dollars in better roads, bridges, seaports, airports, water systems and other basics. They need to be more specific, and acknowledge that the greatest need for these improvements are in our cities, the economic backbone of the nation.
And our nation is in need of educators to teach young children; health aides to care for the aged; truckers to haul goods to and from markets, and administrators to keep these and other complex systems running. But none of it will work if we don’t pay service workers enough to raise families and build careers.
It’s the kind of tough, realistic conversation that urban advocates need to have with the next President: an explanation that when it comes to job growth, we should stop dreaming about factories and start helping cities.