Op-ed: The party of workers

  • By Rich Lowry
  • Sunday, December 11, 2016 7:31pm
  • Opinion

In the course of a couple of tweets, Donald Trump may have ended the image of the GOP as the party of corporate America.

After striking a Carrier deal to preserve about 800 jobs, the president-elect slapped the Indiana company Rexnord on Twitter for “rather viciously firing” its workers and then went after Boeing for ripping off the public on a $3 billion Air Force One deal.

Just like that, and in less than 280 characters, Trump had established more distance from big business than the GOP had in a generation. In his frenetic way, he is forcing a reorientation of the Republican Party’s economics, a change that is welcome in its broad contours, even if his methods are dubious and the potential pitfalls considerable.

Gone is the vaguely Randian emphasis on “makers vs. takers,” with anyone who doesn’t earn enough to make a net contribution to the funding of the federal government considered a parasite on the body politic.

Gone is the obsession with the federal deficit that has long been the King Charles’ head of Republican policymakers.

Gone is the difficulty of conceiving of people as anything other than consumers or budding entrepreneurs who care only about the top marginal tax rate.

Contradicting these tropes, Trump bragged about taking even more people off the tax rolls; paid only lip service to the deficit; and made workers and their jobs his most prominent theme.

Of course, Republican politicians always talk about jobs and the economy, although usually in the bloodless context of gross domestic product growth. Obviously, we want the GDP to grow, but it can be an empty metric for average workers. In fact, it’s possible to pursue policies that increase the GDP — for instance, growing the labor force through higher immigration — while harming the interests of workers.

Trump hammered away at what’s the true bottom line of the economy for most people — their wages.

If you squint just right, you can see a Trump economic strategy. It is to increase growth through traditional Republican means (i.e., tax reform and deregulation), at the same time he aims to directly create a tighter labor market. To that end, he wants to soak up labor with an infrastructure program and to reduce foreign competition by discouraging outsourcing and squeezing immigration.

Ultimately, wages grow when productively increases, but a tighter labor market helps. One way to look at trade and immigration policy over the past several decades is that the political class has decided that less-educated Americans should have to compete more with less-educated foreigners, who either work in factories overseas where U.S. concerns relocate, or come here themselves to live and work.

This has to be at least part of the picture of relatively stagnant wages, and declining labor-force participation. Steve Camarota of the Center for Immigration Studies crunched the numbers for the third quarter of 2016. While overall unemployment has been falling, the labor-force participation rate for working-age natives without a bachelor’s degree is still lower than it was before the recession, just 70.4 percent now, compared with 74 percent before the downturn.

The ultimate metric for success for Trump will be whether he can get wages reliably increasing, and pull more of these people back into the workforce.

All that said, there is much to worry about in Trump’s approach. A president of the United States calling out individual companies is inherently arbitrary and subject to abuse. There is a lot of room between being deficit-obsessive and acting as though we don’t have to pay for anything. And a blowout $1 trillion infrastructure program would, inevitably, be politicized and wasteful.

In all these areas, one hopes Trump will be more restrained — and constrained, particularly by Congress. But the party should accept the new terms Trump has set out for its economic worldview, and focus on workers and their wages more than it has any time in memory.

Rich Lowry can be reached via e-mail: comments.lowry@nationalreview.com.

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