Where Trump flipped counties, worker incomes grow more slowly

[September 08, 2018]  By Jason Lange

WASHINGTON (Reuters) - Worker pay gains in areas of the country that helped power Donald Trump's 2016 presidential victory were substantially slower than in the rest of the country during the first year of his administration, new government data shows.

In the 220 counties that flipped from voting for Democratic candidate Barack Obama in 2012 to Republican candidate Donald Trump in 2016, the average worker earned about $46,000 in the 12 months through March, up 1.9 percent from a year earlier. That compared with a 2.6 percent increase to around $56,000 for the country as a whole, according to a Reuters analysis of Labor Department data.

The data, released this week in the department's Quarterly Census of Employment and Wages, highlights the difficulty of closing the prosperity gap for regions that have long struggled economically, and whose grievances were seen as a factor in Trump's election victory.

On Friday, the Labor Department reported separate data showing average hourly earnings nationwide rose by 2.9 percent in August from a year earlier, the fastest rate in nearly a decade. The next view of wages at the county level will not be available until December.

More than a third of the counties that flipped from voting Democrat to Republican are in six states that were crucial to Trump's 2016 victory: Iowa, Ohio, Michigan, Wisconsin, Pennsylvania and Florida.

The economies of these counties tend to rely more on agriculture and manufacturing, sectors that in recent decades have grown more slowly than many service industries clustered in U.S. cities. The counties' average incomes have been falling further behind the national average income for decades.

The first year of Trump's presidency, which began Jan. 20, 2017, was no exception. Incomes in the counties flipped by Trump were 82.8 percent of the national average, down from 83.3 percent in the 12 months through March 2017. https://tmsnrt.rs/2CrbSaH

Income gains nationwide have picked up in recent years, but so has inflation. And wage gains have remained historically weak in the years since the 2007-09 recession.

President Donald Trump speaks about trade at the Granite City Works steel coil warehouse in Granite City, Illinois, U.S., July 26, 2018. REUTERS/Joshua Roberts

Trump's White House on Wednesday said nationwide hourly earnings data underestimates wage growth because it does not properly adjust for recent tax cuts, inflation and changes in the labor force. The numbers also do not fully incorporate forms of compensation such as employer contributions to health insurance.

Adjusting for these factors, White House economists said in a report https://www.whitehouse.gov/briefings-statements/cea-report-much-workers-getting-paid-primer-wage-measurement, would reveal faster earnings growth.

Some political scientists believe lackluster growth in earnings nationwide could weigh on Trump's Republican party in the November congressional elections.

In part due to accelerating price increases, hourly earnings fell 0.2 percent in the 12 months through July when accounting for inflation, according to an August 10 Labor Department report.

The quarterly census on jobs and earnings draws from employer reports to state programs for unemployment compensation. The data is not adjusted for inflation and measures earnings in the counties where employees work but not necessarily where they live.

(Reporting by Jason Lange; Editing by Dan Burns and Bill Berkrot)

[© 2018 Thomson Reuters. All rights reserved.]

Copyright 2018 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.