The party of workers

And that’s the key to Trump’s economics. If you squint just right, you can see a strategy. It is to increase growth through traditional Republican means (i.e., tax reform and deregulation) at the same time, he aims to directly create a tighter labor market through soaking up labor via an infrastructure program and reducing foreign competition by discouraging outsourcing and squeezing immigration.

Ultimately, wages grow when productively increases, but a tighter labor market helps. One way to look at trade and immigration policy over the past several decades is that the political class has decided that less-educated Americans should have to compete more with less-educated foreigners, who either work in factories overseas where U.S. concerns relocate, or come here themselves to live and work.

This has to be at least part of the picture of relatively stagnant wages, and declining labor force participation. Steve Camarota of the Center for Immigration Studies crunched the numbers for the third quarter of 2016. While overall unemployment has been failing, the labor force participation rate for working-age natives without a bachelor’s degree is still lower than it was before the recession, just 70.4 percent now, compared with 74 percent before the downturn.

The ultimate metric for success for Trump will be whether he can get wages reliably increasing, and pull more of these people back into the workforce.