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Politics

Trump is wrong about economic growth and equality

Like so many politicians before, and likely after, him, President Trump’s claim that a rising tide lifts all boats equally does not hold water.

From NPR: Trump Says Strong Economy Will Bring Racial Justice

President Trump, touting May’s lower-than-expected unemployment rate Friday, said a strong economy was the “greatest thing that could happen for race relations.”

And he seemed to proclaim that George Floyd, whose killing by police in Minneapolis has sparked more than a week of protests, would be happy with the economic news.

“Hopefully George is looking down right now and saying this is a great thing that is happening for our country. This is a great day for him. It’s a great day for everybody.” Trump added. “This is a great, great day in terms of equality.”

Per usual, I’ll focus on Austin and Nashville here, but pick any economic development success story you like in terms of the fastest-growing local economies around the country and the results will not change much.

Austin

The real (inflation-adjusted) value of the local economy in Travis County more than doubled (106%) in 2002-2018. During that time real average monthly earnings for White workers grew by 15%; earnings for Black workers grew by 10%. As a result, the earnings gap increased by three percentage points. In 2002, Black workers earned, on average, 67% of earnings for White workers; in 2018, it was 64%.

Nashville

The real value of the local economy in Davidson County grew by nearly 50% in 2002-2018. During that time real average monthly earnings for White workers grew by 18%; earnings for Black workers grew by just 5%. As a result, the earnings gap increased by seven percentage points. In 2018, Black workers earned, on average, 59% of earnings for White workers.

As of 2018, average earnings for Black workers in Davidson County could support affordable housing costs of $1,027 per month. In Travis County it was $1,156 per month. Average rent for an apartment in Nashville today is $1,430, according to one frequently cited source. In Austin, it’s $1,547.

The tide may be rising, but we need to build better boats.