The liberal talking points were just dealt a severe blow. Just when Joe Biden is telling Americans his policies are better for poor and minorities, there comes proof he’s wrong.
Liberals have long declared that Democrats take better care of the little guys. They say Democrats care more so their policies make things better. They’ll make sure the rich don’t get richer while the poor get poorer. They’ll reduce the income inequality gap. Right? Except it just ain’t so.
The Wall Street Journal editorial board just put an end to that myth with a recent report from the Survey of Consumer Finances. This report every three years provides a snapshot of American household debt, income and wealth across demographic groups. Here’s what they say: “Median real incomes grew 5% from 2016 to 2019.” But that’s not the real headline.
“Families at the top of the income and wealth distributions experienced very little, if any, growth” in net worth between 2016 and 2019 “after experiencing large gains between 2013 and 2016,” while “families near the bottom of the income and wealth distributions generally continued to experience substantial gains.” In other words, the poor got richer while the rich stayed about the same. That’s another way of saying the income inequality or “wealth gap” declined. The opposite was true during the Obama/Biden economy.
Real median incomes grew 9% for Americans who haven’t completed high school and 6.3% for those with only a high-school diploma while declining 2.3% among those with a college degree. WSJ explains this result is due to a tighter labor market that drew more low-skilled Americans into the workforce and spurred higher wages. In other words, when the economy is growing, there are more jobs available than people who need jobs, so those who work get paid higher wages. This is one of the benefits of the Trump economy.
In contrast, employment and wages after the 2008-2009 recession rebounded faster for professionals than for low-skilled and entry-level workers. This is expected during the early years of recovery from a recession. However, what was unusual was how long it took for low-skilled Americans to experience income gains. In an earlier recovery from a recession, from 2001 to 2004, incomes for Americans without a high-school degree increased 11.2%. In other words, the Obama/Biden recovery was slower than usual.
There’s more good news. The Fed also reports growing wealth among lower-income Americans. Net worth increased 32.5% among the lowest income quintile and 30.7% among the second lowest, while declining modestly for the upper quintiles. Net worth also increased among blacks (32.1%) and Hispanics (63.6%) compared to whites (4%). About 14.5% of Americans in the lowest income quintile owned corporate stocks in 2019 compared to 11.5% in 2016 and 12.3% in 2010.
Naturally, this increased wealth among poor Americans made home ownership more affordable. Home ownership declined across the socioeconomic spectrum during the Obama/Biden administration despite near-zero interest rates, but increased 1.4% overall from 2016 – 2019 during the Trump administration. Blacks increased home ownership by 2.3% and Hispanics by 1.8%. The Fed reports that “for families that own a home, the median net housing value rose to about $120,000 from about $106,000 in 2016.”
Business equity (ownership in a business) grew significantly, especially among blacks (138%) and Hispanics (63%) and Americans without a high-school diploma (104%). These improvements can be directly attributed to the Trump administration tax cuts and deregulation. The Trump economy also lowered black unemployment from over 16% during the Obama/Biden years to 5.5% and Hispanic unemployment to 3.9%, the lowest rates since statistics were kept in the 1970s.
These statistics should make every black and Hispanic American realize the Trump administration’s economy has made them wealthier, reduced the income inequality gap, increased the number enjoying home ownership, and greatly improved their job prospects over the Obama/Biden years. It’s clear the Republican administration of Trump has made their lives better. Why would they want to go back to those lean years again?