National News

Trump's expanding economy mostly benefits wealthy communities

Economic growth has accelerated since President Trump took office. But the growth under Trump has not helped everywhere. It has lifted wealthy areas, like St. Charles County, which were already growing before he took office. And it has left the most economically troubled swaths of the country, the ones that Trump promised to revitalize, waiting for their share of the good times.

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By
Campbell Robertson
and
Jim Tankersley, New York Times

ST. CHARLES, Mo. — The prosperity is apparent on the way into town: the 21-floor casino resort and spa on one side of the interstate, and on the other a freshly built retail quarter of boutiques, a brand-new Hilton hotel and a P.F. Chang’s. It unfolds from there along the highways heading west with more gleaming office parks and multiplying subdivisions.

This is not the Trump country of the popular imagination, the land of shuttered plants and the economically left behind. St. Charles County, in the suburbs northwest of St. Louis, has had the highest median household income in Missouri for several years.

But in 2016, Donald Trump won the county by 26 points, and he is still popular among people like Tom Hughes, a homebuilder whose business was rebounding from the recession before Trump took office.

But, Hughes said, “Now there’s an optimism that I haven’t seen, maybe ever.”

Trump rode to office in part by promising economic revival to sputtering towns across America. Economic growth has accelerated since he took office, from the final year of President Barack Obama’s administration, and Trump frequently claims credit for it.

But the growth under Trump has not helped everywhere. It has lifted wealthy areas, like St. Charles County, which were already growing before he took office. And it has left the most economically troubled swaths of the country, the ones that Trump promised to revitalize, waiting for their share of the good times.

The divide is pronounced between the high- and low-income counties that helped deliver Trump the White House.

The most prosperous Trump-supporting counties — as ranked by the Economic Innovation Group, a think tank in Washington focused on geographic disparities in the U.S. economy — added jobs at about a 2 percent annual rate in 2017. The least prosperous Trump counties, which the group calls “distressed,” did not add any new jobs, on net. As a group, the distressed counties saw more businesses close than open in 2017, and they lost population over the course of the year.

St. Charles County, which sits in the most prosperous slice of U.S. counties, saw job growth of nearly 2 percent last year, and business growth of 6 percent. By contrast, about 200 miles north in Illinois, Knox County ranks in the bottom fifth of prosperity nationwide, according to the Economic Innovation Group’s rankings. It flipped in 2016 from supporting Obama, a Democrat, to Trump, a Republican.

In Obama’s final year in office, according to data from the Labor Department, Knox County lost 1 percent of its jobs and businesses. In Trump’s first year, it lost more than 5 percent of its jobs — and nearly 7 percent of businesses.

Knox County also continues to see higher unemployment than the nation as a whole. Its unemployment rate was 4.7 percent in July, down only slight from its rate of 5 percent in July 2017.

The people in Knox County, at least those who have stayed, have seen factories close up and move to Mexico or Mississippi. They have seen wages stagnate and young people leave. And in 2016 the residents, or enough of them at least, thought Trump might be able to turn things around.

“There’s always that hope,” said Johnny Holland, 40, on his way to work at Target in Galesburg, the Knox County seat. “It’s a gamble,” he said of his vote. “Nothing’s changed yet.”

Republicans nationwide remain optimistic that economic improvement over the next year will leave their families better off, according to polls conducted for The New York Times by the online research firm SurveyMonkey. That is true for high earners, lower earners and the middle class alike. The best predictor of optimism is not income level, the polls suggest. It is the fervor of support for Trump.

But there may be a more complicated dynamic: a difference between places like St. Charles, which mainly want government to get out of the way, and places like Knox County, which are looking for rescue. While many in St. Charles give Trump only partial credit for a boom that preceded his arrival in office — and most of that for simply not messing it up — Trump supporters in hard-hit Knox are still holding out hope that he can turn things around.

St. Charles has prime geography, with available space near railroads and highways, and close to a major city at the center of the country. Local leaders have been zealous recruiters of business. The county has landed aerospace contractors, IT companies, small manufacturers and operations centers for corporations, including Mastercard. A huge Amazon distribution center is coming next year.

Like suburban counties everywhere, St. Charles was gut-punched by the recession — Hughes’ business went from 173 employees to five. But growth picked up again around 2012, and in the last few years started into overdrive.

“Investors held off for a long period of time, and eventually they just decided that the economy was going to be solid for a while,” said Greg Prestemon, president of the Economic Development Center of St. Charles. “That certainly has happened under the Trump year-and-half. But also before that.” Trump came to St. Charles last November to rally supporters for his signature tax law as it was speeding through Congress. He boasted that it would be great for construction workers and other middle-class Americans, and that his wealthy friends hated the plan.

Prestemon said the tax cuts were broadly welcomed here, though they did not appear to be driving major business decisions. “I haven’t heard anybody say, ‘Now, that this has happened, I’m going to make a $5 million investment,'” he said.

St. Charles is a stalwartly Republican county in any year. Federal bailouts saved two of the biggest employers, Citigroup and General Motors, in the teeth of the recession, and stimulus funds paid for most of a critical highway project. But when Washington’s involvement regards regulations, conservatives in the county have bristled.

Tariffs Trump has imposed on certain imports — and retaliatory tariffs levied by countries such as China on farm goods and a wide variety of U.S. exports — have been somewhat disquieting, given the county’s significant agriculture business.

But many local Trump supporters said they trusted the president had a worthy long-term goal, even if it involved some short-term pain. And they appreciated his efforts to roll back regulations.

“It’s truly his economy, I don’t care what anybody says,” said John Haake, an Ayn Rand-quoting conservative sitting in the conference room of his laser technology shop. After the 2016 election, “a whole euphoria was going through the business community.”

In Knox County, a 3 1/2-hour drive up the Mississippi River, that confidence is harder to come by. Once a redoubt of solid union manufacturing careers, the county was pummeled by plant closings from the 1980s until the early 2000s. Most brutal was the shuttering of a Maytag factory in 2004 that employed around 5,000 people, leaving a giant warehouse that still sits “Available,” as a banner pleads to passing drivers.

“This town’s really gone downhill,” said Brian Ledbetter, 45, who works at the state prison across from the old Maytag factory. That trajectory is why he, along with nearly 60 percent of the county, voted in 2008 for Obama. Obama visited Galesburg multiple times in his political career; he spoke of its struggles in his star-making 2004 speech at the Democratic National Convention and mentioned it again in his 2010 State of the Union address.

But nothing happened. And in 2016 Ledbetter, along with a narrow plurality of voters in Knox, voted for Trump.

“The one thing he kept keying on was bringing jobs,” he said. “The jobs going away is what tore this county apart. Jobs might bring it back.”

Had anything changed here since 2016? No, he said. Not yet. But it would take time, he said, and the fact that the economy elsewhere, in wealthier places, is doing so well means the benefits would eventually trickle down to here. “They can only build so much,” he said. Knox County officials say they have stopped looking for deliverance in the landing of a Maytag-size factory, a “moonshot,” and frankly they are a bit tired of hearing about those years. They said the future is in smaller manufacturing companies, new industries and local entrepreneurs, anything that would keep the brightest young people from leaving, as they almost all do. Officials see signs of a turnaround in the flurry of new retail — a Kohl’s, a Love’s travel station, a Kay Jewelers — in the bustling boutique restaurants downtown and, for the first time in many years, in a haul of tax revenues in Galesburg that outpaced city expenses.

“There’ll be a group of people always that want to go back to the good old days of the 1920s or the 1880s or whatever,” said John Pritchard, the mayor of Galesburg, who insists that the Labor Department figures about Knox County are simply wrong. “But the reality is I think most people are feeling better about how things are moving. It’s just a challenge to keep people here.”

Marisa Miller, 23, who plans to be a physician assistant, was sitting in her car in the vast parking lot of the old mall, where the last department store was having an out-of-business sale. Her parents worked at Maytag and her grandparents worked at the Butler factory that closed down in 2005.

“Honestly we’re bringing new places here,” she said of the stores opening in the other parts of town. “But we’re seeing other places leave.”

Miller said she was not surprised that economic revival had not yet washed over her town. She hadn’t expected Trump to bring one in the first place, she said. The only thing that had changed since the election seemed to be that certain people around town were angrier. As soon as she can, Miller said, she plans to leave town herself.