An interesting article within The Atlantic draws attention to one of the more intended consequences of Maganomics: wages for the middle-class Americans are rising twice as fast as wages for high-income earners.
Yes, President Trump is closing the wealth gap.
This dynamic is directly attached to President Trump’s MAGAnomic policy that focuses wage and income benefit directly to Main Street, “production economy”; and reverses the process that was driving benefit to U.S. multinationals on Wall Street, the “service-driven” economy. As noted in The Atlantic:
[…] According to analysis by Nick Bunker, an economist with the jobs site Indeed, wage growth is currently strongest for workers in low-wage industries, such as clothing stores, supermarkets, amusement parks, and casinos. And earnings are growing most slowly in higher-wage industries, such as medical labs, law firms, and broadcasting and telecom companies. (more)
While there are not technically going to be direct losers in a Main Street economy, there will undoubtedly be some amid the investment class who will be lesser-winners.
The reasoning is really quite simple. There are many people attached to the Wall Street economy who ran-up wealth via the process of de-industrialization of America.
Anyone who gained income through the process of multinational export of investment and jobs, specifically U.S. based multinationals, are naturally going to see negative impact as the reverse takes place.
Multinational investment assets held overseas are precariously positioned, as the Trump’s ‘America-First’ trade policy starts to get teeth. Any U.S. corporation who attempts to fight against the tariff process will find themselves expending a large amount of money while simultaneously losing the ‘price’ advantage;…. And they will be simultaneously positioned to lose market share to U.S-based, or North American-based, competition.
This is why the USMCA becomes important. Once the USMCA is ratified it gives U.S. multinationals a definitive long-term position, from which they can calculate their costs.
A tenuous supply chain/manufacturing position in China or Asia, with unknown short-term risks to rising production costs, can be reconciled against a North American supply chain and/or manufacturing position that is well defined and predictable.
It is within this policy dynamic where the ultimate MAGAnomic winners and losers will be found. Right now the multinationals are trying to keep prior Asia investments viable; however, the clock is ticking. Those unknown variables have a cost.
“The first loss is the best loss“… and right now President Trump is pressuring U.S. corporations to consider this truism carefully.