President Trump believes he has the cure for America's racial tensions: more jobs.
In Trump's view, everyone will be happy once they are working. “They will be making a lot of money, much more than they ever thought possible,” the president said.
Unfortunately, it's not that simple. Jobs are not magic fairy dust that can cure everything. Racism is a deeper problem than just economics. Even in periods of strong employment and economic growth, the United States and other nations have still experienced ugly flare ups of hate crimes and riots.
“Jobs don't cure the fundamental problems that ail us,” says economist Diane Swonk, who runs DS Economics.
Just look at what's happening right now. The economy is in pretty good shape. Unemployment is a mere 4.3 percent, the lowest level since 2001. Job openings in the United States are at record highs, yet people still walked through the streets of Charlottesville carrying Nazi flags and telling nonwhites and Jews that they should burn in ovens. They did this even though working-class whites still have a large advantage over blacks and Hispanics in getting jobs, earning higher wages and owning homes.
Eight years ago, the economy was in a far worse situation with 10 percent unemployment and an alarming number of people losing their homes. There's no evidence that, as the recovery has gone on, racial tensions have eased.
Race relations “have been frayed for a long time, and you can ask President Obama about that because he'd make speeches about it,” Trump said Tuesday.
Jobs are not enough to bridge the deep racial divide. In theory, a booming economy should help reduce poverty and inequality, but racial tensions are more than just an inequality problem. There are plenty of historical examples that demonstrate this frighteningly well.
“The Nazis reduced the German unemployment rate from 42 percent in 1932 to 0.9 percent in 1939. Race relations did not improve,” notes Paul Ashworth, chief U.S. economist at Capital Economics. (That was the unemployment rate specifically for workers in manufacturing, mining and construction, according to a book from the National Bureau of Economic Research).
Trump tried to clarify his thinking. Americans don't just need jobs, but “great jobs with good pay,” he said. “When they have that, you watch how race relations will be.” He's right that wage growth has been lousy for years. But, again, historical evidence doesn't back up that higher wages are enough to curb racial tensions. Just look at the 1990s, let alone the 1960s.
The 1990s were the last period when there was legitimate wage growth for the middle class and even some at the bottom of the income spectrum. The median income in America went from $50,725 in 1992 to $57,790 in 2000 (it hasn't surpassed that level since).
The economy of the late 1990s did exactly what Trump envisions: People who had struggled to get jobs for a while or had dropped out of the labor force came back because jobs were so plentiful. The labor force participation rate — the percentage of American adults with a job or actively searching for one — hit a record high in 2000 of 67.3 percent. Even the black unemployment rate hit the lowest level in early 2000 since the Labor Department started recording it in the 1970s.
“Even though we had all that, it wasn’t enough” to heal race relations, says Swonk.
Only 38 percent of Americans called race relations “good” in 1997, according to a CBS News-New York Times poll. There were deep divisions over affirmative action programs in college admissions, welfare reform (especially the depiction of African American “welfare queens”) and the ballooning African American prison population.
By 2000, more Americans were willing to describe race relations as “generally good,” but even then, a New York Times article noted, “blacks and whites seemed to be living on different planets.” Blacks were almost four times as likely as whites to say that blacks were treated unfairly in the workplace or in stores or restaurants.
Then there were the hate crimes. According to the FBI, there were 7,876 hate crimes committed in 1999. Over half were racially motivated. For comparison, there were 5,580 criminal hate crimes recorded in 2015.