40% of the workforce that falls under fed-
eral tipped- minimum-wage rules, which
includes nail-salon workers and car-wash
attendants. The flexibility of restaurant
work is in part why more than a mil-
lion single mothers are on the job. After
eight years working at the 24-hour diner,
Munce, 32, mostly gets the shifts that she
wants—working breakfast and lunch and
leaving by 3 p.m. when her daughter gets
out of school—so for that, she’s grateful.
When her daughter got bullied at school
and Munce had to pick her up, Munce was
able to get other waitresses to cover for her
without getting in trouble for calling off
work—though of course this also meant
she didn’t get paid. When her daughter
was younger and Munce couldn’t find any-
one to watch her, she’d bring her daughter
to the diner and have her sit quietly in a
booth with crayons.
Half a century ago, people like Munce
without a college education could expect
to make a middle-class wage. But in re-
cent years, as male- dominated manu-
facturing jobs have been outsourced
or auto mated, women are contributing
more to their families’ paychecks, and
more of the 40% of Americans with no
more than a high school education are
being pushed into the service sector—as
waitresses, domestic workers, hairdress-
ers and Uber drivers.
Consumer spending on restaurants
surpassed spending in grocery stores
for the first time in 2015, and to support
that, the BLS projects more than 500,000
food-serving job vacancies between 2016
and 2026, a higher number of openings
than in all but three occupations it tracks.
“We’re not a sliver of the economy,”
says Saru Jayaraman, co-founder of the
Restaurant Opportunities Center, an ad-
vocacy organization pushing to elimi-
nate the tipped minimum wage. “We’re
increasingly the jobs that are available
to every new entrant into the economy,
including people being laid off from
other sectors.”
Karen Baker, 52, one of Munce’s man-
agers at Broad Street Diner, says she
once made $90,000 a year as an assis-
tant production manager in a plant that
made plastic soda bottles. When the plant
moved to Iowa, she didn’t want to uproot
her family so she returned to the service
industry. “That’s one good thing—if you
can’t find a job anywhere else, you can
VIEWPOINT
The economy under Trump is
very good. But don’t be fooled
By Alan BlinderDONALD TRUMP IS now a decided
underdog for re-election—almost
regardless of whom the Democrats put
up against him. But his political stock
would be even lower were it not for
the strong economy. That’s his, ahem,
trump card.
Yet there are questions about how
long the good times will continue to roll.
Make no mistake about it: the
economy really is in a very good place—
even if the stock market is down from
its highs and extremely volatile on a day-
to-day basis. The two are not the same
thing.
To what extent does Trump deserve
credit? I’d say a little. He inherited a
strong economy from Barack Obama,
who had inherited a catastrophe from
George W. Bush. The unemployment
rate, which peaked at 10% in October
2009, was already down to 4.7% when
Obama left the White House. Since
Trump moved in, it has inched down to
3.7%—which, as the President likes to
point out, is roughly a 50-year low.
The tax cut Trump signed in
December 2017—while horribly
structured, regressive and fiscally
irresponsible—did put more money
into some people’s pockets and did
enhance incentives to invest. It gave
the economy a sugar high, though not a
big one. Real GDP growth accelerated
from around 2.1% per year over the
12 quarters before the tax cut to an
average of 3.1% over the next four
quarters. Since then, though, the growth
rate has retreated to 2.1%.THE DAMAGE Trump has done to the
economy will probably prove to be
more important, however. First, viewing
climate change as a Chinese hoax is not
just buffoonish, it’s potentially tragic,
both in terms of economic losses and
human suffering. Second, his tax cuts
have ballooned the federal budget
deficit into the trillion-dollar range, and
someday the national credit-card bill
will come due. But the more immediate
threat is that, thanks to Trump, the
whole world has a dangerous trade war
on its hands.As you may have noticed, the stock
market now dances to the daily news
from the trade front, rising on happy talk
and falling on bellicose words or acts.
Turns out that trade wars are neither
“good” nor “easy to win”—as any
economist could have told the President,
had he asked.
But wasn’t China a bad actor in
international trade for years? Didn’t
they “deserve” this? Well, sort of,
but their main transgression was not
selling Americans a lot of stuff they
want. Rather, it was a host of problems
surrounding intellectual- property (IP)
protection—ranging from forcing foreign
companies to share technologies with
Chinese firms to outright theft. When
Obama left office, we had a promising
way to deal with these problems. The
Trans-Pacific Partnership included
strong IP protections, put there at our
behest. It seems likely that China,
virtually the only Pacific Rim nation
left out of the TPP, would have wanted
in, and to do so, it would have had to
accept these provisions. But we’ll never
know because Trump, in one of his first
rash acts as President, foolishly pulled
us out.
So now we’re facing a trade war—
and it’s not over what really matters (IP
protection), but over the fact that China
sells more to us than we sell to them.
So what? I sell far more to Princeton
University than Princeton sells to me.
Does that make Princeton a victim?
Trump wants us to believe that
the trade deficit with China is costing
America millions of jobs. Really? With
the unemployment rate at a 50-year
low? He also wants us to believe that
Americans don’t pay for the tariffs. I
know he’s a great con man. But this is all
a bit much.
It’s hard to see how the short-term
sugar high can come close to balancing
the long-term costs of ignoring climate
change, the large budget deficits and the
trade war. Actually, not hard. Impossible.Blinder, a former vice chairman of the Board
of Governors of the Federal Reserve, is an
economics professor at Princeton University