Highlights:
After Factoring In Inflation And Fringe Benefits, Between 2016 And 2019, Wages Actually Declined .22%. According to the Conversation, “From December 2016 to September 2019, nominal wages rose 6.79% from $22.83 to $24.38. But after factoring in inflation, average wages barely budged, climbing just 0.42% in the period. Incorporating fringe benefits into the picture adds another wrinkle. The inflation-adjusted or real value of fringe benefits, which include compensation that comes in the form of health insurance, retirement and bonuses, declined 1.7% in the three-year period. Altogether, that means total real compensation slipped 0.22% from the end of 2016 to September 2019. “ [Conversation, 2/28/20]
After Inflation And Fringe Benefits Are Accounted For, Under Trump, Compensation For Manufacturing Workers Decreased 4.33%. According to the Conversation, “The nominal data for manufacturing workers hardly support a boom but they do show an increase of 2.22% since Donald Trump took office. The adjusted data, however, make it look more like a bust, with wages plunging 3.88% in the period. And, again, the situation is worse when we add in fringe benefits, which brings the decline to 4.33%.” [Conversation, 2/28/20]
Forty-Eight States Saw Decline In Growth Of Real Median Household Income Under Trump. According to Capital & Main, “All but two states saw a decline in growth of real median household income under Trump – including Pennsylvania, Wisconsin, Michigan, and Florida, four states widely regarded as the key electoral battlegrounds that will likely determine the 2020 presidential election.” [Capital & Main, 2/24/20]
Pennsylvania And Wisconsin Household’s Income Grew Faster Under Obama Than Trump. According to USA Today, “Pennsylvania saw its typical household’s income growth slow from 6.2% in Obama’s last three years to 4.7% in Trump’s first three years, while median household income growth in Wisconsin declined from 7.1% to 6%.” [Capital & Main via USA Today, 10/26/20]
Capital & Main Found That Household Income Growth Was Slowed Under Trump, Before COVID-19, In The Battleground States Of Georgia, North Carolina, Pennsylvania, Wisconsin And Others. According to USA Today, “Measured by median household income, however, 26 states saw slower growth under Trump even before the pandemic – including in half of the 2020 battleground states identified by The Cook Political Report, a nonpartisan newsletter that analyzes campaigns and elections. They include Georgia, North Carolina and Ohio, along with Iowa, New Hampshire, Pennsylvania and Wisconsin. In addition, two states with battleground districts, Maine and Nebraska, saw median household income growth slow in real terms.” [Capital & Main via USA Today, 10/26/20]
Middle-Class Incomes Grew At A Rate Of 2.7% From 2016 To 2018 Compared To 5.8% Growth From 2014 To 2016. According to Capital & Main, “Middle-class incomes grew at a rate of 2.7 percent from 2016 through 2018, compared to a 5.8 percent growth rate from 2014 through 2016 when accounting for inflation. ‘Despite what we heard at the State of the Union, the truth is that this economy is not performing well for most Americans,’ says Thea Lee, president of the Washington, D.C.-based Economic Policy Institute (EPI). ‘At this point in the business cycle, wage and income growth for working households should be accelerating, not slowing.’” [Capital & Main, 2/24/20]
2016 To 2018: Real Median Household Income Declined In Six States And The District Of Columbia. According to Capital & Main, “Between 2016 and 2018, real median household income declined in six states and the District of Columbia, which has three electoral votes. During the 2014-2016 Obama expansion, median household income declined in one state. The decline in real median household income occurred in mostly red states: Alaska, West Virginia, South Dakota, and Wyoming. It also occurred in New Mexico, which is considered a long-shot for Trump, and in the blue state of Connecticut.” [Capital & Main, 2/24/20]
Trump At Tax Cut Bill Signing Suggested Corporations Would Be “Giving Billions And Billions Of Dollars Away To Their Workers” As A Result Of The Legislation. According to a Trump White House Presser, “So I don’t think we’re going to have to do much selling. I think the corporations that are giving billions and billions of dollars away to their workers — and many more are coming — I think that’s really what’s selling this maybe better than anybody could, including myself.” [Trump White House Presser, 12/22/17]
After Factoring In Inflation And Fringe Benefits, Between 2016 And 2019, Wages Actually Declined .22%. According to the Conversation, “From December 2016 to September 2019, nominal wages rose 6.79% from $22.83 to $24.38. But after factoring in inflation, average wages barely budged, climbing just 0.42% in the period. Incorporating fringe benefits into the picture adds another wrinkle. The inflation-adjusted or real value of fringe benefits, which include compensation that comes in the form of health insurance, retirement and bonuses, declined 1.7% in the three-year period. Altogether, that means total real compensation slipped 0.22% from the end of 2016 to September 2019. “ [Conversation, 2/28/20]
After Inflation And Fringe Benefits Are Accounted For, Under Trump, Compensation For Manufacturing Workers Decreased 4.33%. According to the Conversation, “The nominal data for manufacturing workers hardly support a boom but they do show an increase of 2.22% since Donald Trump took office. The adjusted data, however, make it look more like a bust, with wages plunging 3.88% in the period. And, again, the situation is worse when we add in fringe benefits, which brings the decline to 4.33%.” [Conversation, 2/28/20]
Report: “Claims That The TCJA Spurred Worker Bonuses And Wage Increases Were Baseless PR And Are Not Supported By Serious Analysis.” According to a report by the Center for Popular Democracy and the Economic Policy Institute, “In reality, corporations’ claims that the TCJA spurred worker bonuses and wage increases were baseless PR and are not supported by serious analysis. Remember the theoretical chain of reasoning that argues cutting corporate taxes will lead to higher wages. Investment decisions must be made and undertaken, then productivity growth has to perk up, then productivity gains have to be translated into wage gains. None of this would be expected to happen in 2017 – even before the TCJA took effect. Given that corporate rates were going to be cut in 2018, there was an economic incentive for firms to front-load any planned bonuses or raises in 2017. Labor costs can be deducted from corporate income for taxes and any tax deduction is more valuable when tax rates are higher. But even with this incentive, the empirical heft of bonuses given at the end of 2017 was tiny. In the last quarter of 2017, despite there being a large tax incentive to give workers planned bonuses before the TCJA lowered corporate income tax rates, bonuses accounted for just 2.7 percent of workers’ total compensation. As a comparison, in the last quarter of 2016, bonuses accounted for 2.5 percent of workers’ total compensation. This rise essentially put less than a dime per hour extra in workers’ pay on average for the last three months of 2017.” [Center for Popular Democracy and Economic Policy Institute, 12/17/19]