Low unemployment doesn’t tell whole story of economy ahead of US election

Global Business

U.S. President Donald Trump has touted the economy as being the greatest it has ever been with the unemployment rate at record lows. But that doesn’t tell the whole story. But in many regions, the gap between rich and poor is growing.

CGTN’s Dan Williams reports.

The US state of Wisconsin is among those struggling with income inequality. That’s despite an impressive manufacturing history. The state hopes the decision by electronics maker Foxconn to build a vast new manufacturing complex will help address some of those issues. Once completed, the company is promising to create some 13,000 jobs.

Matt Montemurro, the President & CEO of Racine Area Manufacturers and Commerce, says that would revive a once-strong pillar of the local economy.

“Years ago, we were a very large manufacturing community,” said Montemurro. “That took a little dip and now with Foxconn coming here we are re-energized, manufacturing is coming back.”

Foxconn maintains its vision for the facility is on track and says it will open for business next year. But critics continue to question just how many people the company will employ once the building has been completed. Even Wisconsin’s governor has said the company may ultimately only employ some 1,500 people.

Even if that is the case, Rob Ducoffe, the Provost and Vice-Chancellor at the nearby University of Wisconsin-Parkside, still sees the company’s presence as a game-changer.

“The students we serve often come from families where their parents didn’t go to college, often come from families that aren’t wealthy. It is probably fair to say that this enterprise and anything connected to it could actually change the trajectory of this region,” said Ducoffe.

Although the local unemployment rate is below four percent, income inequality continues to grow. According to US government data, the gap between rich and poor is now the largest it has been in 50 years.

Steven Deller is an economist at the University of Wisconsin-Madison. He says US employment figures are somewhat deceptive.

“The American dream that if you work hard enough, you will succeed, that is becoming tougher and tougher and tougher,” said Deller.” Yes, they are employed. They are working but they are not working at their fullest potential. So once you get past that simple initial unemployment rate and get down to the details, there are warning signs that there are difficulties with the economy.”

Although questions remain around Foxconn’s eventual footprint in Wisconsin, locals hope it will still help the region develop into a high-tech hub and reverse a drain in talent. But nationally, the concern over income inequality will remain a key issue for whoever is in the White House, come 2020.

Brett Sifling on how the U.S. economy factors into the presidential campaign

CGTN’s Toni Waterman spoke with Brett Sifling, Investment Advisor Representative at Gerber Kawasaki, about how the low unemployment rate and economic factors figure into the U.S. presidential campaign.