Getting the slow-growing GDP to pick up the pace and provide the opportunities you need is mission one for the candidates. Nearly eight years after the Great Recession, this doesn’t feel like a true recovery. Despite job gains, wage growth is tepid, and median household income is just shy of 2007 levels.
Trump promises to boost yearly economic growth to 3.5% from today’s 2% and bring manufacturing jobs back to the U.S. He focuses on tax cuts to make expanding and hiring easier for business owners like him—a longtime GOP strategy. He’d also ax what he calls job-destroying regulations, such as President Obama’s Climate Action Plan. And he wants more infrastructure spending and a higher minimum wage, though he’s given no details. “He will take a practical businessman’s approach,” says Trump adviser Stephen Moore.
Trump aims to tear up trade deals like the Trans-Pacific Partnership (TPP) and impose a 45% tariff on Chinese imports and 35% on Mexican goods. By curtailing immigration and deporting undocumented workers, he says he would protect unskilled Americans from low-wage competition.
Clinton plans to boost the economy by increasing Washington’s investment in it. That means spending $250 billion on projects like fixing roads and bridges and deploying half a billion solar panels by 2021, which may create jobs in the short term. She also wants a $12 per hour federal minimum wage, up from $7.25. She opposes the TPP. In general, she prefers better policing of “underhanded” practices like intellectual property theft and currency manipulation to sweeping new tariffs.
Clinton would also deploy federal dollars to expand access to public colleges and early education programs, to create a better-prepared workforce and help parents with young children stay on the job. “It’s a forward-thinking agenda,” says Clinton adviser Jacob Leibenluft. To pay for all this, she would raise taxes on those making more than $250,000 a year.
WHAT IT MEANS FOR YOU
Moody’s Analytics predicts that Clinton’s plan would produce solid but not fantastic annual GDP growth of 2.7% over the next four years, while creating 10.4 million new jobs. That’s about 3.2 million more than under current policies.
The reason: While her higher taxes would eliminate roughly 300,000 jobs that businesses might create over the next decade, the Tax Foundation finds, her infrastructure and education spending might make it easier for you to find a new or better job. Similarly, her minimum-wage hike could be a mixed bag. A University of Washington study found that Seattle’s hike to $11 last year raised workers pay but held back employment growth by a percentage point.
Trump’s isolationist positions are “not proposals you would find in a macroeconomic textbook,” says Moody’s Analytics chief economist Mark Zandi. Under Trump’s plan, the economy would slide into a recession by 2018, Moody’s forecasts. (Trump notes that Zandi is a Democrat, though he advised former GOP nominee John McCain.)
Moody’s says Trump’s tariffs would start a trade war, which could lead U.S. consumer prices to spike 5% in 2018. And his anti-immigrant policy would lop up to $623 billion from economic output, the conservative-leaning American Action Forum projects. “To be against immigration is to be against America’s future,” says its president, Douglas Holtz-Eakin, chief economic adviser to McCain in 2008.
Want to know what the candidates have said about pocketbook issues? Read: