Economy not working for the middle class
During his State of the State address, NJ Governor Phil Murphy renews his call for a millionaires tax. NorthJersey.com
President Trump and New Jersey Gov. Murphy both claim to be champions of the middle class. Snake-oil salesmen would have nothing over either of them. Unfortunately, both have large constituencies that are buying what they're selling.
Trump’s policies have mostly benefited the rich and the filthy rich. Murphy’s progressive agenda has been aimed at those in the bottom 20 to 30 percent of household income. Both have left the large middle class —variously defined as the second or third income quintiles, or those in the second through fourth quintiles — treading water at best.
No matter how you define "middle class," those in it continue to be left behind. Trump and his acolytes love to crow about the lowest U.S. unemployment rate in 50 years, rising stock prices and, most recently, the new trade agreements with China, Mexico and Canada, which are expected to help the investor class more than the working class.
Yes, unemployment is low, but most of the jobs are in the low-paying service and health care sectors. Job security is lacking in most industries, and health care and pension benefits have steadily eroded. Trump’s much-touted tax cuts have mostly fattened up the wealthy, and the loss to the federal treasury will inevitably lead to more cuts to programs that benefit those most in need.
By several measures, middle-class Americans’ incomes have risen more slowly under Trump than during President Obama’s final years, according to Bloomberg News. And that isn’t saying much. Not only is the wealth gap between the rich and the poor the largest since the Census started tracking it more than a half century ago, but many in the middle class are simply struggling to stay afloat. After adjusting for inflation, the nation’s median household income is roughly the same as it was 20 years ago. Many people are worse off.
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The average worker is struggling to make ends, with 59% of U.S. adults saying they live paycheck to paycheck, according to a recent survey from Charles Schwab. And nearly half have credit card debt and struggle to keep up with the payments.
According to a 2018 study by Northwestern Mutual, 21% of Americans have no retirement savings and an additional 10% have less than $5,000 in savings. A third of adults in or approaching retirement age have between nothing and $25,000 set aside.
New Jersey's economic health varies wildly from one town, and one county, to the next. As with the nation as a whole, some are thriving and some continue to struggle. The housing bubble of 2006 is still taking a devastating toll on large swaths of the state. In fact, housing values in only a handful of towns are higher than they were at the peak of the housing market. More typically, values remain 25% to 30% lower than they were nearly 15 years ago.
Gov. Murphy, who seems to believe it's only the people at the bottom who are struggling and that his renewed call for a millionaires tax is the best way to lift them up, ignores the plight of New Jersey's broad lower-middle class. It is that group that Trump has cleverly and cynically tapped into. And it is that group that has deluded itself into believing that he will be their savior.
Trump will bang his economic-miracle drum even more loudly as the November election draws near. “Impeached for what, having created the greatest economy in the history of our country?” Trump asked in a recent tweet. The tweet is just another bogus claim.
President Donald Trump touted his administration's trade agreements and strong U.S. economy in his first campaign rally of 2020, which was held in Toledo, Ohio. (Jan. 9) AP Domestic
As for Murphy, it takes a lot for a Democrat to lose statewide office in New Jersey. But if he continues on his same trajectory, one that ignores the struggles of the middle class and prioritizes the needs of the lower quintile, he may manage to be a one-term governor.