In his speech lamenting globalization and its ill effects on American workers, Donald Trump relied on the research and analysis of the liberal Economic Policy Institute over a dozen times. The prepared text cites the EPI’s work in footnotes again and again and again, to back up many of Trump’s claims about how our trade policies have destroyed American jobs, flattened wages, and pulverized the American middle class.
This was important, some observers said, because it showed that Trump is trying to stake out positions on trade and wages that are to the left not just of GOP economic orthodoxy, but perhaps even to the left of Hillary Clinton and Democrats.
So it’s worth noting that the EPI — in a lengthy statement sent my way — now says that Trump’s account of what has happened to American workers in recent decades is simplistic in the extreme; that Trump is actually a lot more friendly to GOP economic orthodoxy than most observers have noted; and that Trump’s actual prescriptions fall laughably short of what needs to be done to help those workers.
Trump boasted in his speech that “under a Trump presidency, the American worker will finally have a president who will protect them and fight for them,” and repeatedly accused Clinton and other politicians supported by financial elites of “betraying” American workers by prioritizing globalization over their interests.
But Lawrence Mishel, the president of the EPI, sent me a critique of the speech. Mishel noted that Trump’s account suggests that only government officials — particularly the Clinton administration and Democrats who supported trade deals such as NAFTA — are to blame for flat wages. He argued that Trump conspicuously left out the role of Republicans in this whole tale, as well as the business community’s use of its power to keep wages down and erode countervailing power on the part of labor:
Trump’s speech makes it seem as if globalization alone suppressed wages and it was done by elite Democrats. Missing from his tale is the role of the corporate community in pushing this agenda and his GOP allies in implementing it. NAFTA never would have passed without GOP votes, as two-thirds of the House Democrats opposed it!
What’s missing from this discussion is all the ways that the business community has used its power to suppress wages over the last four decades. Start with excessive unemployment due to Federal Reserve Board policies that were antagonistic to wage growth and friendly to the finance sector and bondholders. Add in government austerity at the Federal and state levels (mostly GOP governors and legislatures) that has impeded this recovery. Then there’s the decimation of collective bargaining, which is the largest reason for middle class wages to falter.
Also forgotten is the erosion of the minimum wage, which is now more than 25 percent below its 1968 level though productivity has more than doubled. Phasing in a $15 minimum wage would lift wages for at least a third of the workforce. Trump is AWOL or wrong on all these issues. The most current example is the GOP and business community effort to overturn the recent raising of the overtime threshold that would help more than 12 million salaried workers. Where’s Trump on that?
That last question is a good one. As I’ve argued, an easy way to call Trump’s bluff on wages — he claims he generally wants higher wages, but what government actions is he prepared to support to make that happen? — is to ask him where he stands on Obama’s overtime rule. Meanwhile, Trump has not offered any proposals I’m aware of to enhance the bargaining power of unions — which Clinton has done. And Trump has voiced support for the elimination of the federal minimum wage.
Yet as Mishel notes, taking steps to boost unions and the minimum wage would be hugely important tools in helping workers, and for all the talk about Trump being unorthodox on on trade and its impact on American workers, he is adopting some positions that are actually very much in line with the elites he claims to be at war with.
Many have pointed out that the U.S. Chamber of Commerce attacked Trump’s protectionism, noting that this shows Trump is at odds with GOP and corporate elite economic orthodoxy. That may be true in a narrow sense only on free trade, but as Mishel notes, Trump is in fact comfortably in sync with that ideology in important respects, too. Additionally, recall that Trump’s tax plan would lavish an enormous windfall on top earners and dramatically slash corporate income tax rates. (As Jonathan Chait has argued, all this helps explain why many elite GOP donors privately don’t mind Trump that much, despite all the attention to the outward theatrics of his supposed anti-elitism.)
Indeed, Mishel also noted something important that has eluded a lot of people. In his speech, Trump also said this:
We tax and regulate and restrict our companies to death, then we allow foreign countries that cheat to export their goods to us tax-free.
Trump argues, without basis, that businesses are overregulated and overtaxed, further ingratiating himself to the corporate elites. Deregulation and tax cuts are the tried and failed policies of the last four decades and have simply enriched the rich.
Trump’s speech is a scam that seems to be offering a path for workers but actually just offers mostly empty boxes on trade and steers the discussion back toward the traditional corporate agenda. Real anti-elitist, that Trump.
Now in one sense, it’s perhaps not that surprising that a liberal economic think tank is criticizing Trump, since he is, after all, the GOP presidential nominee. But it’s still significant: It shows once again that Trump is not actually to the left of Republican and conservative economic orthodoxy in many key respects, let alone to the left of Clinton and Democrats, particularly on big questions about what has happened to the American worker in recent decades and what government should now do about it.
People shouldn’t be fooled by a bunch of tough-talking trade bluster into believing otherwise.