‘Trumponomics” — to the extent that one can discern such a guiding philosophy at this early date — appears to be based on one key goal: growing middle-wage jobs by limiting low-skill immigration, building more infrastructure (construction jobs pay well), and, most important, reviving U.S. manufacturing, in part by radically limiting the transfer of jobs offshore. This helps explain why the president-elect has touted his deal to prevent Carrier from moving about 1,000 manufacturing jobs to Mexico.
The Carrier deal has dominated recent economic news, with responses running the gamut from “This is totally trivial” to “Picking winners only reduces economic welfare.” But the former characterization undervalues the types of jobs in question, and the latter is not always right. Encouraging Carrier to keep jobs can boost overall labor productivity because those jobs are more productive than the average U.S. job. Indeed, the U.S. Department of Labor has found that U.S. wages would have grown more than twice as fast from 2002 to 2007 had the economy not lost good-paying jobs in industries such as manufacturing (a trend most pronounced in swing states that Donald Trump won, including Florida, Ohio, Pennsylvania, and Wisconsin).