The good news is that the U.S. economy is expected to grow by a solid 3.7 percent in the second half of 2018, while unemployment is now 3.9 percent. Even better news is that the benefits of this growth are flowing to American workers in the form of higher wages, which grew almost 3 percent this year.
You might not have heard much about all this good news, because it’s so often drowned out by the mainstream media’s obsession with anything and everything negative related to Donald Trump. While the president invites the media’s distractions — like a bear that takes the bait and thereby encourages his detractors to attack more — he still deserves credit for helping steer the economy in the right direction.
Lower taxes and regulatory relief have combined to help fuel the growth. Manufacturing is on the rebound. American companies are building new plants and adding new workers. Construction is booming. Hiring signs are up everywhere.
Trump’s relentless attention to the economy might pay even greater dividends over the next few years. He’s right to insist that free trade should be fair trade, too. And his push for companies like Apple and Ford to move manufacturing production back to the U.S. is very much on target.
Apple employs a workforce of over a million people in Asia to make its highly profitable iPhones and other products. It’s estimated that because of low wages, lax labor laws, and weak environmental and worker health protections in Asian countries, it costs Apple less than $375 to make an iPhone that sells here for almost $1,000. So when the president threatens to impose stiff tariffs on Apple imports and encourages the company to build its phones in America instead, he’s making the kind of economic sense to working Americans they rightly believe has been missing for too long.
The same goes for American auto manufacturers. Ford’s recent announcement that it intends to import a new compact car into the U.S. from China met with Trump’s justifiable ire. He is pushing hard for Ford to relocate this production back to its American plants. Again, Trump is using the threat of increased tariffs if the cars aren’t produced here. That may not sit well with free-trade professors and pundits, but it resonates with American assembly-line workers whose jobs are at stake.
This focused presidential attention on U.S.-China trade matters is particularly timely. Last month China’s trade surplus with the U.S. hit a record $31 billion. That level of imbalance is simply not sustainable without eventually causing grave economic damage to the U.S. Wielding the stick of tariffs over American companies, along with the carrot of incentives for bringing factory jobs home, can help chip away at the deficit.
The next big challenge is making sure there are enough well-prepared American workers to fill all these new jobs. In some parts of the country there’s already a worker shortage, with too few qualified applicants for available openings. Companies are responding by recruiting people who have been left out of the workforce, including the undereducated and undertrained.
The U.S. education system must get in sync with the need to train these workers, redirecting more resources into job-preparing schooling. Rather than saddling graduates with big debt and irrelevant degrees, America’s colleges, especially, must turn their attention to making young Americans employment-ready. Congress should work with Trump to see to it that federal funds for higher education go to benefiting rather than burdening students, by tying grants and loans to graduates’ employment outcomes.
As the economy strengthens, it’s also imperative that we take a longer look forward to build on our growing prosperity. When things are going so well, it’s too easy to overlook some of the obvious challenges that are just down the road. No. 1 is the aging of the baby boom generation, and the impact this major demographic shift will have on the U.S. economy.
Economists of almost all persuasions agree that the pressure the retirement of baby boomers will place on the Social Security and Medicare systems is unsupportable for future generations. As lifespans have increased, modestly extending the eligibility age for future retirees’ eligibility for these programs is something that should not be put off until the programs are in the red.
So as we celebrate our good times now, let’s not avoid our responsibility to the future, too.
Al D’Amato, a former U.S. senator from New York, is the founder of Park Strategies LLC, a public policy and business development firm. Comments about this column? ADAmato@liherald.com.