Economic Inequality Is Rallying Cry at Democratic Debate
Economic Inequality Is Rallying Cry at Democratic Debate
(Bloomberg) -- Democrats debating in Miami Wednesday night tried seizing the populism that propelled President Donald Trump to the White House, saying they’d strive to make the economy work better for all Americans, not just the wealthy.
Elizabeth Warren said she’d challenge profits concentrated at giant corporations. Minnesota’s Amy Klobuchar highlighted the drag of student debt and vowed to make community college free. Julian Castro said he’d work to pass the Equal Rights Amendment to close the pay gap between men and women. And Cory Booker focused on the daily challenges to average Americans and small businesses.
“Who’s this economy really working for," Senator Warren said in response to the first question of the night. “It’s doing great for a thinner and thinner slice at the top.”
Senator Klobuchar echoed those sentiments, saying: “not everyone is sharing in this prosperity. " She pointed to the difficulty people have in affording college and paying health-care bills.
The candidates’ remarks come as the U.S. economy is set to break a record next month for its longest expansion. While the growth is underpinned by a solid labor market, improving wage gains and corporate investment, its benefits have been disparately reaped.
Stocks have soared to all-time highs and home values risen but workers’ paychecks have grown slowly by past standards.
New York Mayor Bill De Blasio underscored that in the debate, saying he’s fought for higher wages, raising the minimum to $15 an hour, and better employee benefits -- “putting money back in the hands of working people.”
Hourly wage gains, on an annual basis, have weakened in the past few months from 3.4% in February to 3.1% in May. Economists forecast that to pick up only slightly in the June report on jobs, due July 5.
Systemic issues also persist, including the gender wage gap and a black unemployment rate that remains higher than other groups.
The unemployment rate for black Americans fell to record lows in 2018 before picking up slightly in 2019, and the rate for Hispanics and Latino Americans is currently sitting at a record low. It’s something Trump has touted on social media and in interviews. At the same time, blacks have about double the unemployment rate of whites, an issue that hasn’t gone away despite the tightening labor market.
Inequalities are exacerbated by $1.6 trillion in outstanding student debt. Economists say that burden restricts many Americans’ ability to invest and buy homes.
Trump’s trade wars have thrown doubt on how long the economy’s growth will last. Economists now see the possibility of a recession in the next few years as manufacturing slows and some cracks emerge in the labor market.
U.S. employers added 75,000 workers in May, the second-lowest reading since 2017. Jobs have been the the backbone of the decade-long expansion -- with businesses adding more people from the sidelines, including those unemployed for long stretches and those without degrees.
The pace of growth is also slowing down. Real gross domestic product expanded 1.8% in the second quarter, according to economists estimates, slowing from a 3.1% pace in the first quarter. After Trump passed a tax-cuts package that boosted growth in 2018 to the highest in four years, the effects are fading as firms have yet to increase investment substantially.
“This economy has got to work for everyone," said former Representative Beto O’Rourke. “And right now we know that it isn’t."
To contact the reporter on this story: Katia Dmitrieva in Washington at edmitrieva1@bloomberg.net
To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Margaret Collins, Michael Shepard
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