With America’s economy growing, it seems that the worst has gone. Unemployment rate is again low, but this hasn’t stopped candidates for President worrying about it. According to economist.com, median household incomes remain lower in real terms than in 1989, and only 11% higher than in 1970. So, what are the candidates’ view on this problem and their solutions? Let’s talk a bit about their campaign promises, shall we?
Does Mr. Bush have the solution?
Jeb Bush, the front-runner for the Republican nomination, would like to re-create the middle class. One of his campaign promises aims to a growth of 4%, but the economic analysts don’t agree with him. Many of them think that the economy’s potential for growth is permanently lower today.
Part of Mr. Bush’s solution is for Americans to work longer hours to ensure this growth. Not a good idea, as Democrats quickly reminded that Americans toil for longer than any other workers in the G7 group.
Marco Rubio, also a Republican, believe that the productivity can be boosted in the hours already worked. According to Mr. Rubio, Americans need help adapting to the new world of high-tech jobs. On education matter, he said that college accreditation is controlled by a “cartel”, and courses need to be cheaper and shorter.
What about Mrs. Clinton’s ideas?
One of Hillary Clinton‘s campaign promises is that she will boost middle class incomes and wages. And what’s her plan? She wants to encourage firms to share profits with workers.
Joseph Blasi, an economist from Rutgers University, is the one who advised Mrs. Clinton, according to economist.com, because he claims that profit-sharing boost productivity.
Bernie Sanders, senator from Vermont, took a more rudimentary approach: to double the federal minimum wage from 7.25$ to 15$ an hour. Many low-wage workers are their household second earners, so this increase is vital for them.
Just like in other presidential debates, politicians are full of campaign promises. But this improving middle class incomes and wages boost is something not that easy to do. Slow growth, weak productivity and a declining labor share of income are global trends, and the next President will need to consider them all.