February 22, 2019

Will Trump Save the Middle Class?

“President Trump will give his State of the Union address in Congress on February 5, 2019. He will undoubtedly tout the continuing economic and labor market expansion as his record. Against this backdrop, the big questions are whether he will mention the ongoing financial struggles middle class families face, including retirement insecurity, and whether he will propose real ways to ease those struggles. His record so far raises serious doubts about his future efforts to help America’s middle class. After all, his first two years in office have been marked by policies that hurt not helped families’ finances.

Many families face current and future economic insecurity. Wage growth has been flat for much of the past decade. This has made it difficult for many families to just get by. A lot of families also have a hard time to put money aside for an emergency, for their children’s education and for retirement. Wealth – the difference between what people own such as emergency savings, retirement savings and the equity in their house and what they own in mortgages, credit cards and student loans, for example – was still only 63.3% in 2016 of what it was in 2007 before the Great Recession. The median non-retiree family wealth was $69,400 (in 2016 dollars) in 2016, down from $109,664 in 2007. The problem of economic insecurity is even greater among communities of color and those who don’t have a college degree. Many middle class families still live paycheck to paycheck, have little money set aside for an emergency, can’t get ahead and face an uncertain retirement. President Trump tapped into this economic insecurity during his campaign.

His policies so far have, if anything, made these problems worse , however. Most recently, he partially shut down the government over funding for a widely opposed border wall. The longest partial government shutdown in history affected 800,000 government employees and another estimated 1.2 million contractors, who may not get paid for their lost income. Many of the impacted families did not have the savings to withstand a month without a paycheck. People then borrowed on credit cards and from payday lenders. They delayed paying their bills, for instance, for their children’s college tuition. And they filed for unemployment insurance. The result was not only less income, but also less wealth. Yet members of President Trump’s administration, including the president himself, showed a complete lack of awareness for the harm they had inflicted on middle-class families with the shutdown.”

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