Hey there reader, I hope you’re doing great. By now, everyone should know Donald Trump won 30 states on Election Day, 2016. I dug a little deeper in to Trump-States and compared them to each other to find out what they have in common. Here are the results;
- Trump won 24 of the 26 right to work states, a 92 percent correlation. Nevada and Virginia were the only exceptions.
- Trump won 19 of the 21 states which have a minimum wage equal to the federal minimum wage, a 90 percent correlation. New Hampshire and Virginia were the only exceptions.
- Trump won 17 of the 19 states which refused to expand funding for Medicaid, almost a 90 percent correlation. Maine and Virginia were the only exceptions.
- Trump won 5 of the 7 states which have no state income tax, a 71 percent correlation. Nevada and Washington were the only exceptions.
- Trump won 18 of the 28 states which have unemployment rates higher than the national unemployment rate of 4.6 percent, a 64 percent correlation.
Voters have overlapping identities, they’re also workers, consumers, tax payers, students, parents, etc. Given the identities and correlations above, we can assume voters in Trump-States had several overlapping common factors before the election which might have influenced how they voted.
Right to work laws weaken unions and create a free rider problem by eroding union collective bargaining power: non-union workers who “do not pay dues enjoy the same wages, benefits and protections as those who do.”
Workers in right to work states have weaker unions than workers in non right to work states. And workers in right to work states earned $44,401 per year on average while workers in non right to work states earned $50,511 per year on average, a difference of $6,109 per year or 12.1 percent. Median household income in right to work states was $50,712 while median household income in non right to work states was $58,886, a difference of $8,174 or 13.9 percent.
Workers in states with a minimum wage equal to the federal minimum wage had slower wage growth than states which increased their minimum wage from December, 2013 to October, 2016. Granted, all wages grew at a consistent 7.2 percent on average over the same period in minimum wage states.
But the Council of Economic Advisers believed states which increased their minimum wage contributed to the 7.2 percent increase in wage gains in minimum wage states. And states which increased their minimum wage had 6.6 percent more of an increase in average wages than minimum wage states. “In the states where minimum wage was raised, hourly wages and weekly earnings grew by at least 6.6 percent more than in states without the hikes.”
States receive federal funding for public services like public schools and universities, infrastructure, food stamps, public transportation, etc. And states had the option to expand funding for their state Medicaid exchanges or to have their citizens buy healthcare at Healthcare.gov. If a state chose the former option, they received more federal funds in general to provide more public services to citizens. But if a state chose the latter option, they received no additional funds from the federal government and their citizens received fewer public services than states which expanded Medicaid funding.
The Pew Charitable Trust found 10 states received less than $1 from the federal government for every dollar they contributed, only 2 were Trump-States; Delaware, Minnesota, Nebraska, New Jersey, Connecticut, Illinois, Ohio, Massachusetts, New York and Rhode Island. Pew also found 14 states received more than $2 from the federal government for each dollar contributed, 9 of them were Trump-States; Mississippi, New Mexico, West Virginia, Hawaii, South Carolina, Alabama, Maine, Montana, Alaska, Virginia, Arizona, Idaho, Kentucky and Vermont.
The White House reported in June, 2015, states which didn’t expand Medicaid funding “have seen sharply slower progress in reducing the number of uninsured over the last year and a half…if these states do not change course, 4.3 million of their citizens will be deprived of health insurance coverage in 2016.” If these states expanded their Medicaid programs;
- 1 million more people would receive clinic care.
- 491,000 would receive “all needed care” per year.
- 626,000 would receive cholesterol screenings.
- 163,000 would receive mammograms.
- 262,000 would receive pap-smears.
- 572,000 would report being in excellent, very good or good health.
- 393,000 fewer cases of depression.
- 5,200 fewer people would die each year.
- 193,000 fewer people would pay out of pocket medical costs greater than of 30 percent of their annual income.
- 611,000 would spend money on things other than their medical costs.
These states would receive an additional $29 billion in net federal spending if they expanded Medicaid funding.
States which have no income tax place a higher tax burden on excises, or sales. This disproportionately effects the poor given they already spend so much of their income: “Heavy reliance on sales and excise taxes are characteristics of the most regressive state tax systems. Six of the 10 most regressive states derive roughly half to two-thirds of their tax revenue from sales and excise taxes, compared to a national average of roughly one-third.”
“State consumption tax structures are highly regressive with an average 7 percent rate on sales and excise taxes for the poor, 4.7 percent rate for middle-income people and a 0.8 percent rate for the wealthiest taxpayers. Because food is one of the largest expenses for low-income families, taxing food is particularly regressive; five of the ten most regressive states tax food at the state or local level.”
States compete with each other with higher, lower or no income taxes. High income tax states usually have a higher cost of living than low or no income tax states. When employers relocate high income jobs in high income tax states to low or no income tax states, they might reduce the employee’s wages given the affordable cost of living. Many of these low or no income tax states are also right to work states. This deprives the worker of income and the federal government of tax revenue as well.
Workers in Trump-States aren’t protected by unions and their wages are low. They’re also taxed more on their consumption instead of on their income and they might be sick or have high medical expenses which makes it difficult to work. It’s no wonder why the unemployment rate is higher for Trump-States than for non Trump-States.
Economic Recovery: Results May Vary
The economy added nearly 10.7 million jobs since Obama first took office in January, 2009. Median household income increased by 2 percent or $1,140. Consumer buying power increased 4.2 percent and the median sales prices of existing single-family homes increased 23 percent. Unemployment fell from 10 percent to 4.6 and job openings are at a 15-year high. Median household income grew by 5.2 percent from 2014 to 2015 and the number of Americans living in poverty fell to its lowest rate in decades.
But some Americans didn’t experience the same economic improvement: median household income, adjusted for inflation, was 1.6 percent lower in 2015 than it was in 2007 and 2.4 percent lower than it was in the late 1990s.
Voters experienced the recovery in different ways: part of this was connected to partisan perspectives of the recovery. Ironically, Republican voters’ perspective of the economy improved significantly the week after the election while Democrats voters’ perspective declined.
The sluggish recovery isn’t the fault of Trump-State voters: Trump-State voters are extensions or products of institutions. My point is, institutions such as ALEC which lobbied state legislatures to pass right to work laws weakened unions and made a political environment for Trump to win. Another example: the U.S. Congress, under Republican control in the House since 2010 and the Senate since 2014 hasn’t increased the federal minimum wage since January, 2009. Finally, a federal judge in Texas blocked the new minimum salary which would have doubled the current salary minimum of $23,660 per year to $47,476 in December, 2016.
What Trump Wants
High union membership rates ensured American workers were paid high wages and received good healthcare benefits in the 30 years following World War 2. And a high minimum wage and high income tax reduced economic inequality during the Cold War era.
Donald Trump was born into a wealthy New York family at the beginning of the baby boom in 1946. He came of age when unionization peaked at 35 percent of the workforce in the mid-1950s. Trump was 22 years old in 1968, when the federal minimum wage was $1.6 per hour or $9.63 adjusted to 2016-dollars. The income tax rate on the highest income earners was 70 percent in 1968 and CEOs earned 23.7 times more than typical workers in 1968. CEOs earn 275.6 times more than typical workers today.
Trump ran his campaign on the reactionary slogan, Make America Great Again or MAGA. Part of the MAGA plan is hostility toward labor unions: he supported a national right to work law. Another part of the plan is to keep the minimum wage low by nominating a Secretary who criticized the minimum wage to head the U.S. Department of Labor.
But the most crucial part of the plan, I think is two-fold: to reduce the number of tax brackets from 7 to 3 and to decrease federal income taxes from 39 to 33 percent on people who earn more than $225,000 per year. This will be a yuge victory for the wealthy by taxing millionaires and billionaires at the same rate as upper middle-class Americans.
Trump promised to repeal and replace the PPACA with Health Savings Accounts. His website reads “On day one of the Trump Administration, we will ask Congress to immediately deliver a full repeal of Obamacare.” But he might abandon this part of the plan and just defund particular parts of the PPACA instead. We will see.
If Republicans in Congress repealed the the PPACA, the uninsured rate might double from 29 million to 59 million by January, 2019. And Trump’s income tax cuts will benefit the wealthy most, “nearly everyone in the highest income one percent would enjoy a substantial tax cut, averaging $33,000 or about 2.1 percent of after-tax income…For example, repealing the premium subsidies and coverage penalties, which were key to the basic design of the Obama health reform, mostly hurt those in the lowest 40 percent of income, who make about $52,000 or less…By contrast, high-income households would receive nearly all the benefit of repealing the Medicare surtax and the net investment tax—no surprise since they were the explicit targets of those tax hikes. For instance, 90 percent of the benefit from repeal of the 3.8 percent net investment tax would go to those in the top one percent, who make $700,000 or more.”
The tax cut will also starve the federal budget and weaken other federal programs like Medicaid, Medicare, the Supplemental Nutrition Assistance Program and Supplemental Security Income. These programs would have to be overhauled with new qualification requirements in order to receive benefits: Republicans in Congress reformed the welfare program, Aid to Families with Dependent Children and created the Temporary Assistance for Needy Families in the same way in 1996. The outcomes of welfare reform were devastating: 68 of every 100 poor families with children received cash assistance in 1995 but just 23 of every 100 poor families do today.
The objective of the MAGA plan is to make non Trump-States into Trump-States by weakening unions with a national right to work law, a low minimum wage, low taxes on high incomes and defunding, repealing or replacing the PPACA. The MAGA plan will be used to shrink and overhaul SNAP, TANF and SSI which will likely negatively effect millions of hungry, elderly, disabled, low income parents and children.
Trump nominated cabinet secretaries whom will carry out other parts of the MAGA plan by deregulating environmental protections, enforcing a national voter identification law, defunding parts of the PPACA to make it more difficult for women to get contraception or an abortion, privatizing Social Security and voucherizing public schools. He’ll probably nominate Supreme Court Justices whom will carry out the MAGA plan too.
Deductive reasoning should lead one to conclude Trump doesn’t want to make America great again: he wants to make Americans who are already rich even more wealthy. The MAGA plan comes at a time when America has more millionaires and billionaires than any other country, when the middle-class is shrinking while the rich and poor classes swell. Economic inequality in America is worse now than it was on the eve of the Great Depression. And the MAGA plan will surely make it worse.
What Trump-State Voters Want
Voters in Trump-States wanted change and respect on Election Day: their collective quality of life came at the expense of neo-liberal state policies while manufacturing jobs were sent overseas or replaced by machinery over the last 40 years.
“They want respect for their long hours of work that risks their bodies, for the hands caught in vices, backs wrenched by weights, and knees torn. They want respect because they are doing dangerous work, but their pay has been flat for decades. They want respect because they haven’t just lost economically, but also socially…With Trump, they are finding someone who gives them respect. He talks their language, addresses their concerns.”
Trump-voters’ demands for respect are valid and they’re being heard loud and clear. It’s just democrats, liberals and social-democrats are concerned the MAGA plan could lead to economic or demographic revenge one day.
But Trump-voters aren’t just a monolith: they have a wide variety of demands. For example, voters in Trump-States like Arkansas, Florida and North Dakota approved legal medical marijuana use and Montana voters approved a measure to ease rules on medical marijuana this year. Voters in Arizona also approved increasing their minimum wage to $12 per hour.
Furthermore, millions of people already responded to the MAGA plan: a record number, 6.4 million enrolled at the Healthcare.gov in Trump-States in December, 2016. Florida had 1.3 million new insureds, Texas-776,000, North Carolina-369,000, Georgia-352,000 and Pennsylvania-291,000. Clearly, not all Trump-State voters want the PPACA to be repealed yet.
What Activist Public Policy Can Do
The MAGA plan could have serious negative effects on the economy for the next 4 years. The economy could be in recession, poverty and unemployment could be higher which would be an opportune time for Trump to find enemy and pick a fight. This is how he might get re-elected in 2020.
The number one thing we can do right now is to remain calm and carry on with our day to day routines; let’s work, accept a better job or retire, volunteer, travel, read, write, be creative, protest, vote, start a business or non profit, go back to school, buy or sell a home. Let’s take care of ourselves, our families, friends and communities.
Democrats will have an opportunity to gain support several years after the MAGA plan is implemented in 2020. And Democrats would be smart to focus on change and class politics instead of stability and identity politics alone. Democrats should block attempts to implement the MAGA plan and lean left by supporting union membership for workers in the education, hospitality, home health care, restaurant and retail sectors. There’s a good chance right to work laws could be ruled unconstitutional if they were argued before the Supreme Court.
Democrats should support a $15 per hour national minimum wage. Economist Alan B. Krueger believed a $12 minimum wage would have minimal job loss effects in 2015. But healthcare, housing and all other expenses will likely cost more in 2020 than they do today. Thousands of workers in the hospitality, restaurant, retail and home health care have already protested and bargained with their employers for a minimum wage of $15 per hour.
Democrats should also embrace a single payer health system to reduce medical costs. This will free consumers to spend more of their disposable income, increasing consumption and employment in the education, hospitality, home health care, restaurant and retail sectors. Democrats should also support a higher minimum salary of $47,476 per year, paid family leave, public daycare, affordable housing and affordable tuition for higher education.
Democrats would be smart to implement Thomas Piketty‘s income tax plan to pay for it all; tax the highest 1 percent of annual incomes which are incomes greater $500,000 at 80 percent. “Doubling the average US individual income tax rate on the top 1 percent income earners from the current 22.5 percent level to 45 percent would increase tax revenue by 2.7 percent of GDP per year, as much as letting all of the Bush tax cuts expire.” This additional revenue would be used to pay for the single payer healthcare system, affordable housing and higher education, 3 sectors which have “increased from 25 percent of national spending (gross domestic product) in 1980 to 36 percent of GDP in 2015.” The US spends about 25 percent less than other developed countries as percentage of GDP.
Essentially, the Democrats will have to develop an economic plan to reverse 40 years of neo-liberal state policies and the MAGA plan by 2020. They’ll have to find a young presidential candidate willing to listen to criticism and adapt to change, inspire intellectual curiosity and debate, work with voters, Congress, Courts and media and develop a deep sense of compassion with the poor, working class and middle class. Democrats need to build solidarity with the unemployed, students, families, immigrants, minorities and the elderly.
Voters in Trump-States have been ignored by the Democrats for far too long. If the PPAACA were repealed or defunded, a national right to work law were passed and the minimum wage were left unchanged, workers in Trump-States would suffer more than they already do and the American people would become more partisan.
Democrats need to rebuild the party, develop coalitions, emphasize economic inclusivity and class solidarity to attract voters from Trump-States and non Trump-States in order to win the House, Senate and White House in 2020.