In yet another worrying sign of America’s lopsided economy, new evidence suggests that wage growth for the lowest-income workers has ground to a halt. Naturally, partisans are looking for who to blame. Democrats were, no doubt, the lead architects of the globalised information economy. This economy not only excused and justified the deindustrialisation of the heartland, but also gave birth to a new oligarch class. Additionally, it contributed to the widening wage gap between college-educated and non-college-educated workers. Yet the latest data suggests a more proximal cause for working-class woes: Trump’s high-tech, high-tariff, and high-finance economy is starving workers.

After pandemic restrictions were lifted, America’s economic landscape changed dramatically. An unusually tight labour market — with the lowest unemployment since the Sixties — gave rise to broad wage increases. Suddenly, long-running trends in inequality seemed to reverse, with the poor getting richer at a faster rate than the rich. Economists hailed this “unexpected compression”, but then record inflation began to eat into wage gains. Joe Biden’s team tried to tackle rising prices with major new investments, such as the Inflation Reduction Act, the Bipartisan Infrastructure Law bill, and the CHIPS and Science Act. This action, alongside a union-friendly National Labor Relations Board bent on increasing worker leverage, helped maintain some employees’ gains.

The strategy initially paid off. In 2023, the business press reported booms in excavators, steel, and trucks. Factories were being built at a rapid clip. Skilled trades had more recruits than ever. But unfortunately, inflation still could not be tamed; it may well have cost Biden the election.

Trump’s response has been to unleash the business class. To crush inflation, he offered tax cuts for the highest earners, increased financial deregulation, rolled back infrastructure spending, and imposed a scattershot of non-strategic tariffs. The results have not been salutary. Since the Biden building boom, manufacturing employment has stalled to its lowest rate in five years. Construction projects have tailed off so suddenly that it has prompted Trump-friendly building trade unions to plead with the President to change course. Inflation, meanwhile, remains steady. Ironically, the only sectors which seem to be booming right now are those run by the coastal elite. As a Financial Times headline put it earlier this month: “Wall St and Silicon Valley ride high as tariffs hit Main Street.”

Indeed, the labour market is now beginning to slack. This month, Trump fired the head of the Bureau of Labor Statistics for posting less-than-flattering jobs numbers, but wage stagnation will be felt by ordinary people as unemployment ticks upward. Despite his promises to blue-collar workers, the President’s policies do nothing to address the real problem in the economy: the lack of effective demand. Right now, the top 10% of income earners account for nearly half of all consumption. In other words, the whole economy depends on the rich spending lots of money.

The trouble is, they much prefer to save. For most of them, new tax cuts will go straight into savings banks, not productive endeavours such as factories. To make matters worse, high finance only wants to dump money into high-tech goods designed to cut labour costs and lay off yet more workers. This might explain the huge stock valuation of  AI “unicorns”, but it spells disaster for the job market.

What is needed is more investment in blue-collar jobs. Biden’s infrastructure and industrial policies were beginning to reap real rewards, but Trump’s counterproductive moves have throttled potential wage and employment gains — not to mention growth in general. To rebalance and revive the economy, the government must guarantee full employment, make it easier for workers to join unions, and invest heavily in infrastructure and manufacturing. After all, high finance and high tech alone won’t save us.