...here's what really happened.
The recent announcement by the founder of Amazon, Jeff Bezos, that his company would give substantial raises to its lowest-paid employees should not blind us to the fact that most American workers are not receiving big wage increases. In fact, the real wages (that is, wages adjusted for inflation) of average American workers are declining.
When justifying the Republicans’ December 2017 $1.5 trillion tax cut for corporations and the wealthy, President Donald Trump and House Speaker Paul Ryan claimed that it would result, in 2018, in wage gains for American workers ranging from $4,000 to $9,000 each.
But, in reality, nothing like that has materialized. Instead, as the U.S. Labor Department reported, between the second quarter of 2017 and the second quarter of 2018, the real wages of American workers actually declined. Indeed, the second quarter of 2018 was the third straight quarter―all during the Trump administration―when inflation outpaced wage growth. The last time wages grew substantially above inflation was in 2016, during the Obama administration. Consequently, by August 2018, as the Pew Research Center reported, the purchasing power of American workers’ wages was at the same level as in 1978.
"If the justification for saddling the American people with at least $1 trillion in additional debt was greater wage growth, tax cuts should have been tied to each company’s wage growth; that’s just logical. That’s getting a better deal for the American people, and that’s getting a better return on investment."
A better plan for bringing jobs back to America would have been to give tax credits to companies that invested in new plants and plant expansion in the US. For wage growth, they could have offered a 2 or 3 for 1 tax credit for bonuses given to employees.
So let's see. The tax cut is not quite 10 months old.. And the people, who for years asked us to be patient and give Obama time, are now saying the tax cut did not work. This, is spite of things like GDP's in excess of 4, decades level lows in unemployment or any other of the long list of indications of exponential economic growth.
The problem with wage growth... After nearly a decade of Obama's eco-terrorism, we have so many low wage workers coming from the side lines back into the work force, it's holding wage growth down. People who have been in the work force, particularly in skilled positions are making more, as would be indicated by consumer earnings/spending.
Were wage growth calculations to include people who were making 0 now making minimum wage or better, the numbers would be quite impressive. But that's not how it's done. It's based on earnings of the current work force, which BTW, is the largest this country has ever had.
"It's based on earnings of the current work force, which BTW, is the largest this country has ever had."
So is our population.
While there is no argument that the tax plan has not stimulated the economy, the intent of this thread was to show that there was a better, longer lasting way to do it, without the Corporate giveaway. That issue is not addressed.
"The labor force participation rate, LFPR (or economic activity rate, EAR), is the ratio between the labor force and the
overall size of their cohort (national population of the same age range).
"In the U.S., the overall labor force participation rate has declined steadily since 2000, due primarily to the aging
and retirement of the Baby Boom generation. Analyzing labor force participation trends in the prime working age (25-54) cohort helps separate the impact of an aging population from other demographic factors (e.g., gender, race, and education) and government policies. The Congressional Budget Office explained in 2018 that higher educational attainment is correlated with higher labor force participation for workers aged 25–54. Prime-aged men tend to be out of the labor force due to disability, while a key reason for women is caring for family members."
The best way to stimulate an economy is, and always has been allowing the people who earn the money to decide on how they want to spend it. The more efficiently money is used, the better the lifestyle of the participants. And government is the least efficient way to use money. Probably worse than stuffing it into a mattress.
Cherry picking things like median income growth is a good way to argue against it. But let's look at median income growth in 2 years... I suspect we'll be seeing great improvement.