Workers’ wages have been flat to lower since the Trump tax cuts

Bebeto
Matthews/AP Photo

• The Trump tax cuts were pitched as a boon to US
  workers, with X saying that they would lead to wage growth, and
  that “hardworking Americans” would never keep more of
  their money. 
• While the tax cuts have meant that Americans are
  keeping more of their paychecks, 
  no
  discernible gains in wages have materialized thus far.
• Real average hourly earnings (adjusted for inflation)
  for all employees on private nonfarm payrolls were totally
  unchanged in June from one year earlier.

President Donald Trump’s massive tax cuts were pitched by the
administration as pro-worker, despite extensive analysis
documenting the vast majority of benefits would accrue to

the wealthiest Americans and the
corporations they run.

“B
ecause of our tax cuts, you can keep more of
your hard-earned money,” Trump said in
his April speech celebrating what the White House touted as
“Tax Cuts for American Workers.”

Trump emphasized the message: “This event is dedicated to
you: the hardworking Americans who make our nation run.”

And earlier, in February, the president’s former chief
economic advisor
Gary Cohn said “one of the real impetuses for our tax reform
and tax cut plan was to get real wages to grow in the United
States, we haven’t had real wage growth in a long time in the
United States.”

Now that enough time has elapsed since the passage of the
tax cuts for economists to begin analyzing the data, it’s clear
that while many Americans may be seeing a bit more money in their
paychecks as a result of the new tax breaks,
the promised wage growth and business investment have yet to
materialize.  

A report from the Center for American Progress, a liberal
think tank in Washington, points to the following in
particular:

• Real average hourly earnings (adjusted for inflation) for all
  employees on private nonfarm payrolls were totally unchanged in
  June from one year earlier.
• Real average hourly earnings the approximately 80% of workers
  categorized as “production and nonsupervisory employees” edged
  0.2% lower over the same period.
• Real median weekly earnings have also decreased slightly.

This chart paints an even clearer picture:

Center for American Progress

Trump talked up the
second quarter’s strong 4.1% annualized pace of US gross
domestic product growth, but most economists expect that number
to come down closer to the recent 2% trend — and that’s without
the drag from
worsening trade wars.

“Workers are not getting ahead in the Trump economy,” write
CAP economist Michael Madowitz and senior fellow Seth Hanlon in a
report.

The 2% gain in nominal weekly median earnings from the
second quarter of 2017 to the second quarter of 2018 was outpaced
by inflation, which registered 2.7% over the same period, they
note.

“Official data released in recent weeks have shown that
workers’ wages are flat or even slightly down, in real terms,
over the last year.
These data fly in the face of
many tax plan boosters who have claimed that the bill’s passage
has already been a boon to middle-class workers.”