As the contours of Donald Trump’s presidency over its first 100 days — and the priorities of the Republican-majority Congress — take shape, the economic impact on working families of this agenda is becoming clearer.
Trump ran for election on a hard nationalist, economically populist platform, wooing voters in depressed regions of the country, and in declining industries such as coal, by stressing economic protectionism, job creation, and massive infrastructure spending, and by promising to create a “beautiful” health care system for all Americans.
But as the rubber hits the road, the populist premise of his candidacy is morphing into a presidency that, many observers argue, redistributes opportunity away from those near the bottom of the economic, educational and social ladder.
“The industrial center of the country has been on a declining trend for 40 years,” says University of Texas at Austin professor of government James Galbraith. “The real premise of the Trump campaign was he was going to reverse this trend. But is he going to be able to? The answer is no. The reality is that a protectionist policy is not very credible to business.”
Neither the US House of Representatives nor the US Senate has shown any inclination to embrace either a quick move to protectionism or huge, publicly funded infrastructure plans of the kind that could re-industrialize economically devastated areas of the country. Meanwhile, the plans put forward to replace the Affordable Care Act would, by most accounts, curtail rather than increase access to the medical system for America’s poorest and sickest residents.
Once these elements of Trump’s agenda are stripped out, what’s left is a series of spending cuts, deregulatory measures — Trump’s initial nominee as US Labor Secretary, for example, was vociferous in his opposition to the minimum wage and overtime rules — and rollbacks of social protections.
Falling Through the Cracks
Ernestina Sandoval, a 42-year-old single mother of two, is a low-wage McDonald’s worker in Richmond, California, a San Francisco Bay Area city. Sandoval shares a bedroom with her daughter in a friend’s rented apartment. For her share in the apartment, with utilities, Sandoval spends roughly $600 a month, half of her total earnings.
Five years ago, finding it impossible to make ends meet on the $1,200 that she brings in each month by working the overnight shift at the local franchise, Sandoval sent her son, then age 4, to live with his father in Mexico. Unable to afford the plane ticket to visit Mexico, she says she has not seen the boy since.
Sandoval has leukemia. She says that she gets her health insurance under the Affordable Care Act (ACA). Without the ACA, she wouldn’t be able to afford insurance. Without insurance, she wouldn’t be able to pay for chemotherapy. She and her family would, in all likelihood, simply fall through the cracks.
Stories such as Sandoval’s are legion these days. Nearly one in six Americans lives below the government-defined poverty line, and that dire situation could, anti-poverty advocates fear, soon get even worse.
According to George Goehl, the Chicago-based co-director of the grassroots coalition People’s Action, Trump is going after income supports that “are allowing people to get by. People who are already on the margins are going to slide so far down. You’ll have increased homelessness, people not going to school, a rise in workplace accidents, debt. This will be a boot on the neck of anti-poverty programs.”
Reshaping the Social Contract
From cuts to affordable housing investments to steep decreases in the Pell grant program; from revamping health care systems in ways that cut services for the poor to reducing expenditures on job training programs — combined with funding tax cuts for the affluent — the role of the federal government in shaping the American social compact is being re-imagined in dramatic ways.
Trump’s proposed budget cumulatively takes away tens of billions of dollars from programs that benefit poor Americans, both those outside the labor force and those with jobs that pay at or near minimum wage. The US Department of Housing and Urban Development faces cuts of $6 billion, meaning large reductions in rental assistance and other programs aimed at extending access to affordable housing for the working poor and homeless Americans.
Local communities would lose over $4 billion in grants aimed at alleviating poverty, with programs such as the Low Income Home Energy Assistance Program taking big hits. More than $400 million would be removed from job training programs for nurses and others in the health care professions.
A whopping $6 billion would be drained from the National Institutes of Health’s $26 billion budget — money not allocated explicitly for anti-poverty programs, but used to bulk up the public health, education, outreach and research infrastructure, which is particularly important for protecting communities that under-access insurance-based health systems.
Lower-income students would face huge cuts not only to Pell Grants but to programs designed to help them complete high school and college, to mentoring programs, and to job training programs for disadvantaged youth.
“It’s going to be pretty terrible,” worries Brianna Tong, a 22-year-old organizer with The People’s Lobby campaign, who works with students in the Chicago area on social justice campaigns.
“The federal aid is a huge part of what’s helping people to go to school. If the Pell grants get cut, we’ll have a ton of people unable to be in school; having their life plans messed up.”
Tong has had students come to her concerned that they will either have to drop out of school if the budget cuts kick in, or that they will have to go ever more deeply into debt in order to finish their education. “This is a worry that students all over the country are having,” Tong says. “A lot of people, in a lot of states, are freaking out.”
Meanwhile, health care reforms, if they ever come to pass in Congress, would likely result in millions of Americans losing regular, affordable, access to doctors and to necessary prescription medicines. In the run-up to the March vote on US House Speaker Paul Ryan’s ill-starred replacement plan for the ACA, the nonpartisan Congressional Budget Office estimated that as many as 24 million Americans could lose their health coverage over the coming decade.
Turn Medicaid into a limited block grant to the states, as the more conservative members of Congress have urged, and the risk of catastrophic numbers of poor Americans being left entirely outside the health care system during economic downturns increases. In fact, the idea and use of block grants remain controversial in US cities, including Chicago.
Cutting investments in affordable housing, education, public transport, pollution control and anti-poverty strategies all contribute to worsening health, argues Don Berwick, head of the Centers for Medicare and Medicaid Services under President Barack Obama. “The federal budget blueprint is undercutting many of the social programs that work against these health destroyers,” he says.
Add into the mix the proposed rollback to ACA, and Berwick fears the consequences could be disastrous. “For disadvantaged populations, when you take away health access, diseases and mortality increase.”
“If it all comes to pass, poor families will be in much worse shape. It’s really bad policy,” explains Ben Spielberg, a project manager and research associate at the Washington, D.C.-based Center on Budget and Policy Priorities.
“But, I’m hopeful. I don’t think much of it will come to pass. Low- and middle-income people will be relying on defeating a lot of the ideas that have come out of the administration so far.”
“We Have People Power”
Under the Obama Administration, progressive economists and social justice advocates saw a window of opportunity to reshape federal policy in a way intended to expand access to vital social goods, such as health care and higher education. These days, those same economists and community organizers are playing defense and planning for the future, as they work on solutions if, as Berwick puts it, the federal government “leaves the field.”
The scope of change is so broad that advocates find themselves working on multiple fronts — trying to convince Congress to limit the scope of cuts; seeking to embarrass a pro-employer US Department of Labor into preserving at least some workplace safety rules, overtime protections and other systems of particular importance to low-wage workers; and campaigning to convince at least some more progressive cities and states to pick up the slack in the provision of services and the protection of wages at the bottom of the economy.
At town hall meetings around the country, angry constituents have challenged legislators on the scope of federal cuts.
“You strip out food stamps, Meals on Wheels, Medicaid and places that are already struggling mightily are going to go further downhill,” says Chicago’s Goehl, whose coalition has organized many large town hall protests. “It’s going to hurt. And you’ll see a new phase of resistance as a result.”
With California and other progressive states, as well as cities such as Seattle and New York, starting to move forward on minimum wage increases (Seattle led the way a couple years back by passing a $15 an hour living wage ordinance; other cities and states have followed suit); on expanded investments in public transport; on bonds for large-scale affordable housing investments; and on protecting access to health care, it’s possible that two distinct systems will emerge in Trump’s America.
Wealthy blue states, pushed to the left by force of circumstance, might increasingly resemble social democracies in their policy priorities.
Meanwhile, red states — as well as blue states without the size and economic clout to go their own way on expanding social programs — are likely to see further constrictions on access to basic services, further economic dislocation for the working poor, as well as even higher levels of inequality than those that have emerged in recent decades.
‘The underlying irony is the red states are the poor states and the blue states are the rich states,” says Marshall Ganz of Harvard University’s John F. Kennedy School of Government.
Roll back taxes for the wealthy, as Congress seems poised to do, and blue states such as California, Washington and New York, where a disproportionate number of wealthy Americans live, could suddenly find themselves with large amounts of money available to tax at a state level in order to fund social services.
“In a way,” Ganz notes, “this is an incredible opportunity to reground, redefine and deepen progressive politics in America, coming up with ways to move forward in honest and far less equivocal ways” (at least in those states that can afford to do so).
Faced by a federal administration that is “taking a meat cleaver to everything,” Ganz believes that progressive governors and mayors must create a counter-narrative that revolves around shaping “values-based policies” that make a real difference in people’s lives. By so doing, he believes, they could sow the seeds for a progressive chapter in American politics that might pull the country as a whole leftward down the road in much the same way as the rise of the Tea Party pulled it rightward over the past several electoral cycles.
Ernestina Sandoval agrees. Having joined the Fight for $15 movement, which aims to raise the minimum wage, she now spends much of her time organizing with numerous other hourly workers and social justice allies around the living wage.
“We can’t feel fear, can’t feel weakness,” she argues, despite her illness and the long nights she works at McDonald’s to keep her family afloat. “We can overtake anything that comes our way. We have people power. Everything we want, and we need, we have to fight for it.”