There is more than meets the eye when it comes to the most recent jobs report

Rebekah Entralgo

Rebekah Entralgo Reporter, ThinkProgress

Many economists were pleasantly surprised by the Labor Department’s August jobs report Friday morning.

201,000 jobs were added last month when economists only expected a gain of about 190,000 and the unemployment rate remained at 3.9 percent. The number that shocked most experts, however, was that wages grew 2.9 percent faster than last year, making it the fastest growth rate since the recession.

But there is more than meets the eye when it comes such a glowing jobs report, especially when it comes to wage growth. The White House will likely point to these numbers as tangible evidence that the Trump administration is putting more money into the pockets of everyday Americans.

While on paper 2.9 percent wage growth is impressive, when calculating for 2 percent inflation, it’s still quite slow.

In what might have been a preparation for the August jobs report, the White House sent out an email Thursday titled: “The latest Trump Economy myth: Wages are stagnant.” In it, the administration goes on the defensive, offering a full-throated defense of the Trump economy and saying the economic results of the Trump presidency are “undeniable.”

The White House specifically calls out ThinkProgress’s reporting in the email: “Looking for a new talking point, the left found one: Jobs, stocks, and economic growth may be soaring, but pay is not. ‘Worker wages remain stagnant,’ ThinkProgress declared in July.”

In this instance, the White House is referring to a July ThinkProgress article which describes the way corporate executives have successfully enriched themselves through stock buybacks, a windfall enabled by the Tax Cuts and Jobs Act of 2017 signed into law by President Donald Trump on December 22, 2017.

As we reported at the time, the White House had been making a strenuous effort to sell that bill “as a game-changer for average working Americans” despite the fact that the “benefits of that bill appear to be going mostly to the people at the top.” This continues to be the case: The average American worker earns around $44,500 a year, not much more than what the typical worker earned in 40 years ago, adjusted for inflation.

The Thursday email coincided with a release of a new report from Trump’s Council of Economic Advisers (CEA), wherein the group claims that actually, wage growth is growing at a faster pace than is being reported, you just have to look really, really hard to find it.

The report suggests wages have actually grown by 1.4 percent over the past year when data on benefits, taxes, a different measure of inflation, and how earnings differ across age brackets are all factored in. For the average American family, however, that only comes out to roughly an additional $1,000 per year.

According to CEA Chairman Kevin Hassett, workers value benefits “just as much as cash,” but surveys by groups like the Society for Human Resource Management have found that while most workers value their benefits, they are rarely asked whether or not they would trade them for higher wages.

At any rate, the upshot is that as impressive as this jobs report looks on paper, it nevertheless fails to deliver much in the way of tangible, real-world benefits for workers. The 2.9 wage growth reported, while noteworthy from a post-crash historical perspective, really doesn’t mean much to the 15 million American households struggling to put food on the table.


Reposted from Think Progress

Posted In: Allied Approaches

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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