Monday, September 2, 2019

Which Is The True Workers’ Party?

Labor Day is typically considered to be the end-of-summer holiday by many Americans, but the holiday originated in the late 1800s as a day to celebrate America’s labor movement. As such, it was closely identified with labor unions for much of its history. On this Labor Day, with elections more than a year away already heating up, it’s appropriate to consider the relationship of both parties to workers.

Democrats have traditionally tried to coopt Labor Day due to their close association with the unions. Today’s Democratic Party, with its newly popular contingent of democratic-socialists, is no different. The Democrats pay lip service to workers, but many of their policies are proven job-killers and ultimately hurt the very people that they try to help. Higher taxes, business-strangling regulations, and mandates that add to the cost of doing business all serve to slow the economy and prevent job creation.

That the Democrats have alienated their blue-collar base is apparent from the fact that Donald Trump is sitting in the White House instead of Hillary Clinton. Trump’s victory was clinched in the Rust Belt states that were traditionally assumed to be safely tucked behind a Blue Wall.

Many of the proposals from the 2020 Democrats aren’t much better – or different - than what Hillary tried in 2016. There are proposals for rolling back the 2017 tax reform, raising the minimum wage, and nationalizing healthcare. None of this bodes well for the economy or for workers.

But if Democrats have disregarded their blue-collar base so have Republicans. Although the Trump Administration got off to a good economic start with tax reform and deregulation, it went off the rails in 2018 with the trade war. Although the tariff war was pitched as strategy to help workers and strengthen US industry, the opposite has turned out to be true.

The trade war was originally launched to help the US steel and aluminum industries, but American steel companies are shutting down mills and laying off workers. Why? Because overproduction paired with declining demand from other industries led to a sharp decline in steel prices despite Trump’s attempt at protectionism.

It isn’t only steelworkers who are suffering from the trade war. The agricultural and manufacturing sectors have both been hard hit as well. Despite the president’s farm subsidies, US farm income has fallen precipitously, leading to higher rates of farm bankruptcies and suicides by frustrated farmers. A boom in manufacturing jobs in Trump’s first two years has already turned flat as manufacturing declined for two straight quarters in the first half of 2019, putting the industry in a recession even before the most recent rounds of tariff increases.

The month of September ushered in one of those rounds of tax increases. President Trump’s new 15 percent tax on 40 percent of consumer products imported from China will be borne heavily by blue-collar workers and their families. JP Morgan Chase notes that the new tax will cost the typical American household more than $1,000 annually. Previous rounds of tariffs had almost totally erased the benefits of tax reform per Accounting Today so the September tariffs will put taxpayers firmly in the red. And there is yet another round of US tariffs scheduled to go into effect just in time for Christmas.

The new tariffs on Chinese goods will have an outsize effect on lower and middle-class consumers because lower-income Americans are more dependent on cheap imports from China. The poor are also least able to afford the 15 percent tax on everyday items such as clothes, shoes, electronics, plastic items, computers, and furniture.

At this point, it probably seems to most voters that both parties are bad for workers. The Democrats are intent on milking businesses for every cent that they can get while Republicans are oblivious to the collateral damage of their Quixotic trade war. Both are too focused on their own priorities to pay attention to the fact that neither party is popular with average Americans.

Rather than telling workers what is best for them and informing taxpayers that they should be grateful for the chance to “invest” more of their hard-earned money in the priorities of the party base, maybe politicians of both parties should listen to the concerns of the workers they are supposed to serve.

Originally published on The Resurgent

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