Dan Bongino: The stock market is booming after a year of turbulence, the economy is adding far more jobs than expected despite the lowest unemployment since WWII, and despite the booming economy, we’re told that workers aren’t sharing in the prosperity. Why? Because wages aren’t rising fast enough.
Indeed, wage stagnation has been the great argument against Trump’s tax plan, allowing liberals to make the same tired old arguments against so-called “trickle-down economics” that we’ve heard for the past five decades. As a few writers at the Center for American Progress put it last year; “On measures that determine whether workers’ wages are keeping up with the cost of living, there has been little improvement and even some regression since the start of 2017, when President Donald Trump took office.” Forbes’ Chuck Jones wrote half-way into last year that “While GDP hit 4.1% for the June quarter… the unemployment rate is hovering at all-time lows, inflation continues to increase, real wages are stagnant.”
Before completely tearing apart a claim, it’s worth explaining the basis for why people believe it to be so. Private sector wage growth in 2018 was about 3.2%, respectable at face value, but only a net 0.76% increase when you account for inflation being 2.44% that year. It’s on this basis that the Washington Post’s fact checker Glenn Kessler gave Trump’s claim that wages are finally rising once again after stagnating “four Pinocchios,” which are reserved for particularly-bogus claims.
Kessler isn’t an economist, so he can be forgiven for not realizing that his “fact check” isn’t as solid as he thinks. Rather than take isolated statistics at face value, it’s important to remember that all the figures we’re dealing with are averages and can be affected by external factors, such as:
- An increase in the rate that people are retiring. Since those nearing retirement have decades of work experience, they far out-earn the average American. In fact, 55-64 year olds boast wages 28% higher than those age 25-34. If my workspace consisted of me earning $10 an hour, Dan earning $15, an hour, and a prospective-retiree earning $30 an hour, the average wage would be $18.33. But suppose the prospective-retiree retires while Dan and I simultaneously see our pay hiked to $15 an hour (+50%!) and $20 an hour (+33%). While every worker saw their wages increase massively, the average wage at this hypothetical firm as decreased to $17.50 an hour.
- The labor force participation rate has increased under Trump. Those who previously had given up looking for work are now re-entering the labor force. Those who’ve been out of the workforce for an extended period of time tend to have less skills in the first place – and those skills they do have atrophied over time. While they’re not dragging anyone’s individual wages down, their addition to the workforce does lower average wages on paper. MORE
Many people fail to recognize that we are a Market Based Economy.
Everyone gets paid what they bring to the table.
Make yourself more valuable and the money will follow.
Kami Harris is claiming the middle class are getting paid way less money because THEIR REFUND CHECKS ARE SMALLER. Holy F. First of all it stands to reason if your being charged less tax, your refund would be smaller. And then there’s this thing called with holding, and deductions. The stupid is incredible. She’s certainly never ran a business.
@Mickey Moussaoui February 12, 2019 at 9:42 pm
> Many people fail to recognize that we are a Market Based Economy.
>
> Everyone gets paid what they bring to the table.
>
> Make yourself more valuable and the money will follow.
If we were “a Market Based Economy”, stringing those words together would make AOC laugh so hard at the stupid, she’d pee.
My wages were pretty stagnant for the prior 8 years too, but I don’t recall the libs blaming Obama for that.