Even the Wall Street Journal Knows!

You might not read the Wall Street Journal every morning before breakfast. But you probably don't write a column called “Up Against the Wall Street Journal” like I do. Last week was a doozy. “U.S. Manufacturing Is in Retreat” was the story that ran at the top of the front page of last Wednesday’s Journal. Its subtitle read “Factories cut jobs as president's promised boom from tariffs hasn't occurred.” Hey, I thought it was my job, not theirs, to expose President Donald Trump's so-called manufacturing renaissance as so much puffery.

The same thing happened again the next morning. The Journal editors responded to an opinion piece by the presidentthat they had run on Saturday. In the article, Trump boasted that his tariffs “have created an American economic miracle,” and his policies were “building the greatest economy in the history of the world.” The editors begged to differ. They pointed out that without the Trump tariffs, “prices of many goods would be lower,” and those higher prices have forced consumers to pay 43% of the cost of the tariffs. And while the AI-juiced stock market might be booming, the editors called Trump’s tariffs “a market loser.” They reminded readers that following Trump’s April 2, 2025 “Liberation Day” announcement of his across-the-board tariffs, the stock market plummeted to near bear market territory. And just as the Journal had reported the day before, there was no manufacturing renaissance. “Back in reality,” as they put it, manufacturing lost 63,000 jobs in 2025.  

And it wasn't just the editors. “The Republicans Have an Economy Problem,” was the title that Karl Rove, the old President George W. Bush hand, gave to his regular Thursday column in the Journal. To make his case, Rove turned to the message that Washington consultant Bruce Mehlman had sent to his clients a few days earlier, titled “Six-Chart Sunday—Blue Collar Blues.” Mehlman’s six-pack of bad news focused on the same festering economic problems that my recent Dollars & Sense column, “Trump’s Bifurcated Economy,” had.

Here are a couple of examples. Mehlman’s chart, “Consumption Trends Highlight Growing Inequality,” gets at the heart of the bifurcated economy argument. Like me, he used the estimates of Moody’s Analytics economist Mark Zandi that the richest 10% of households accounted for nearly half (49.2%) of consumer spending. And like many others, including the head of the New York Federal Reserve Bank, Mehlman correctly reports that “asset owners are the only winners” in today’s K-shaped economy.  

What Mehlman doesn’t say, and his clients undoubtedly aren’t interested in hearing, is that the policies they support are a driving force behind the ever-widening economic divide. Pro-rich tax cuts are one of those policies. From President Ronald Reagan’s tax cut that slashed the top income tax rate in the early 1980s to Trump’s Big Beautiful Bill last summer, U.S. inequality has worsened by leaps and bounds. From 1979 to 2023 (the latest year data are available), the share of national income going to the richest 1% of households doubled from 10.3% to 20.7%, while the share going to the bottom 50% of households fell from 20.3% to just 10.3%.  

At the same time, wages corrected for inflation in order to reflect purchasing power, have stagnated. Workers’ bargaining power eroded as the government failed to enforce labor laws and actively dismantled protections for workers, while the share of workers in unions declined. That’s certainly true for production and nonsupervisory workers (more or less blue-collar workers) in manufacturing. Their average real hourly wage in December 2026 was $9.05 (measured in constant 1982–1984 dollars), just 21 cents higher than what it had been 46 years earlier in December 1979. That’s a gain in purchasing power of just one-half a cent a year.  

Mehlman’s chart, “blue collar jobs keep disappearing,” has the ring of truth as well. U.S. manufacturing has lost jobs every month from mid-year 2024 to the end of 2025. Construction, as well as transportation and warehousing, created fewer and fewer jobs as 2025 went on. And the growth of total blue-collar employment slowed throughout 2025, turning negative in the last two months of the year.  

But Mehlman leaves unsaid what’s caused these jobs to vanish. To begin with, slowing job growth was not confined to blue-collar jobs. Hiring in the economy has declined since its February 2022 peak following the pandemic recession. 

What’s brought hiring to a near halt? The answer is Trump’s tariffs. The higher costs and uncertainty created by Trump’s ever-changing tariffs are an impediment to investment, and in turn job creation. After Trump’s Liberation Day announcement of his retaliatory tariffs, hiring fell 3.7 times more quickly from April through August than it had over the previous three years.  

Also, industries with greater exposure to tariffs lost jobs while those with less exposure to tariffs added jobs. Mining and logging, manufacturing (especially of motor vehicles and parts), and transportation and warehousing all lost jobs from March 2025, the eve of Trump’s Liberation Day, to January 2026. Without robust job growth in health care and social assistance (which includes hospital care, childcare, food assistance, and other medical and social services), and in leisure and hospitality, nonfarm employment across the economy would have lost 271,000 private-sector jobs instead of gaining an anemic 250,000 jobs over those months.

My intention is not to leave you asking if the Wall Steet Journal editors are on your side.  They’re not. The Journaleditors might acknowledge your pain. But that won’t stop them from advocating policies that will make the economy yet more unequal and leave most of us worse off.

John Miller is a professor emeritus of economics at Wheaton College and a member of the Dollars & Sense collective.