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
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
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