President Donald Trump declared in his State of the Union address that “our economy is the best it has ever been.”
Put aside the Trumpian hyperbole, and it’s true that the economy is strong — and that this is critical to Trump’s chances for reelection. The Obama recovery has continued under Trump, with the stock market surging and corporate profits swelling. Just last month, employers added 225,000 jobs.
Private wealth owned by U.S. households and nonprofits has soared just since 2000 by the equivalent of more than $800,000 per household, according to Federal Reserve data. Wow! I feel richer already.
Yet we live in two Americas, and there’s another side of the country that Trump didn’t mention — one that helped elect him but that he has neglected since. In the other America, suicide rates are at a record high in the post-World War II era, and more Americans die every two weeks from drugs, alcohol and suicide — “deaths of despair” — than died in 18 years of war in Afghanistan and Iraq.
These deaths are symptoms of a larger economic malaise for working-class Americans that predates Trump. It’s not his fault, but neither has he tried seriously to address it; in some ways, especially in health care, he has worsened it.
Important new research finds that 20 million Americans, particularly those with low levels of education, describe all 30 of the last 30 days as “bad mental health days.”
“These men and women report in effect that every day of life is a bad day,” said David G. Blanchflower, a Dartmouth economist who conducted the research. Blanchflower noted that self-reported happiness in America has continued to fall.
Low-income Americans also report levels of physical pain impairing their lives that are higher than reported by wealthier Americans, and far higher than in other advanced countries. One-third of Americans say that they have been in pain “often” or “very often” in the last four weeks.
Some of the pain probably results from a lack of universal health care. Millions of Americans endure constant toothaches in a way that doesn’t happen in our peer countries.
In effect, we have a bifurcated economy, marked by prosperity for millions of Americans and by a Social Great Depression for millions of others.
It’s strange to make a comparison to the Great Depression, for output is surging. But consider the effect on mortality: Even during the Great Depression, life expectancy rose strongly, while in three of the last four years it fell because of deaths of despair.
We’re used to thinking of a depression as geographic, but this one is demographic. Working-class Americans, often defined as those without a college degree, are caught in a dust bowl.
“The crisis is almost invisible for those with a college degree,” noted Anne Case, a Princeton economist who is an author, with her husband, fellow economist Angus Deaton, of an excellent book coming out this spring about deaths of despair.
It is these working-class Americans, white and black alike, who have seen earnings collapse, family structure disintegrate and mortality climb. These Americans are earning less on average, adjusted for inflation, than their counterparts back in the 1970s.
“Our story of deaths of despair is essentially a long-run account of destruction of the working class,” Deaton said.
In the 1930s, President Franklin Roosevelt worked hard to address the Depression with the New Deal. This time, Trump in some ways has exacerbated the pain — such as by chipping away at access to health care. Some 400,000 children have lost health insurance under Trump.
It’s true that unemployment has dropped and that workers at the bottom are enjoying some of the largest wage gains, a pattern that is drawing some people back into the labor force. That’s significant and welcome (albeit the wage gains result partly from local increases in the minimum wage and the economic strength partly from trillion-dollar deficits). But Case says that even so, almost half of Americans age 25 and over with only a high school diploma are no longer in the labor force.
Meanwhile, the central fact of America today is not its economic vigor but its profound inequity.
I noted that private wealth has increased by $800,000 per household. It’s similarly true that whenever Jeff Bezos walks into a room, average wealth there shoots up so that each person becomes, on average, a billionaire.
Interesting but not very meaningful.