Since 2016 the economy of the United States (US) has been good for the working poor. This is the conclusion drawn by Deroy Murdock, contributing editor for the National Review, a conservative publication that was heavily opposed to DJ Trump in the 2016 election.
According to Murdock, “Median household income after eight years of G. W. Bush rose $401, or 0.7 percent. Obama’s two terms yielded another $1,043, up 1.7 percent. Three years of Trump have added $5,070, an extra 8.3 percent.”
Likewise, “Year-on-year median wages for November were up 3.6 percent. Those too often left behind moved more swiftly ahead: manufacturing workers (up 4.0 percent), non-whites (4.3 percent higher), and the bottom 25 percent (4.5 percent richer)”. Unemployment is also at record lows.
The US is in an election year so partisan fights about whether Obama or Trump (or Bush) are responsible for the booming economy are sure to multiply. A truly nonpartisan analysis of the recent success is hard to come by, but the following observation is germane to South Africa.
By the offer of tax cuts to corporations (the rate was brought down to 21%) and other incentives, over $1 trillion in investments were brought back into the US. This took place at the same time that poor and marginalized Americans found it easier to get jobs and bargain for higher wages.
If the cuts and the deregulation of the last three years are causally connected to the boom in pro-poor business, South African regulators should take note. The US was suffering from a kind of investment strike, much more limited than South Africa’s, in which more than R120 billion of JSE foreign equities were offshored last year alone. South African analysts and policy makers should scrutinize the US’s recent outcomes for potential warnings, and potential positive lessons to draw from.