Issues 2020: Despite Bright Spots, Trump Economy Weaker than Prior Booms

Productivity growth is near all-time lows, and prime-age men are working at levels typical of a recession

NEW YORK, NY – The Trump administration and campaign consistently tout the economy’s unprecedented strength. Though most economic indicators are relatively healthy, the current boom is weaker than those of the past, according to a new issue brief by Manhattan Institute senior fellow Oren Cass. The latest in the Manhattan Institute’s Issues 2020 series, the brief paints a dimmer picture of America’s economy: one in which productivity gains are weak, wage growth is lagging, and nearly one in five prime-age men are not working full-time.

Rather than compare the economy to its Great Recession nadir, Cass places it alongside other business cycle peaks. This review demonstrates that productivity growth has stalled, too few prime-age men (ages 25-54 years old) have returned to the labor force, and wage growth is lagging. Without productivity growth, today’s economic gains are unlikely to be sustainable over the long term. Without reversing the long-term trend of declining male labor-force participation, the related problems that have bedeviled American society through the booms and busts of recent decades will only continue to deepen.

Other key findings include:

• Nearly one in five prime-age men (18%) is not working full-time, a figure more consistent with recessions than expansions; compared with the year 2000, 2.3 million prime-age men are missing from full-time work.
• Productivity growth remains below its long-run average, resulting in GDP growth below the average of the past 25 years, even with recessions included.
• In the manufacturing sector, productivity is declining, having exceeded a gain of 1.5% only twice in the past 13 years.
• Median wage increases for individual workers stand below the average levels of recent decades, again, with recessions included.

Click here to read the full report.

About Issues 2020

The Issues 2020 series applies the Manhattan Institute’s breadth and depth of expertise on major issues of national public policy to the key arguments and proposals of the 2020 presidential campaigns. MI scholars identify where the central claims driving key debates reflect fundamental misunderstandings about what is happening in America. With succinct explanations of what the data show, they provide a much-needed corrective and a solid foundation for political debates about the nation’s future. Click here to read more.