Wage growth well short of what was promised from tax reform

[The Barbarian]

The latest Employment Situation report from the Bureau of Labor Statistics shows weekly employee earnings have grown $75 since tax reform passed, well short of the $4,000 to $9,000 annual increases projected by President Trump and House Speaker Paul Ryan (R-Wis.).

During the three months following passage of the tax bill, the average American saw a $6.21 increase in average weekly earnings. Assuming 12 weeks of work during the three months following passage of the corporate tax cuts, this equates to a $75 increase.

Assuming a full 52 weeks of work, the $6.21 increase in weekly earnings would result in a $323 annual increase, nowhere near the minimum $4,000 promised and $9,000 potential annual increases projected by President Trump and Speaker Ryan if significant cuts were made to corporate tax rates.

Unless something drastically changes, it seems that Americans are going to have to settle for much less than the $4,000 to $9,000 projected wage increases. An extra $322 a year isn’t going to do much to pay down the $1 trillion in additional debt they are projected to take on as a result of the tax cuts.

Yet, a key part of the argument for the recently passed corporate tax cuts and more than a trillion dollars in debt was the substantial wage hike promised by the president’s Council of Economic Advisers (CEA).

From a document titled, “Corporate Tax Reform and Wages: Theory and Evidence,” on the White House’s website:

“Reducing the statutory federal corporate tax rate from 35 to 20 percent would, the analysis below suggests, increase average household income in the United States by, very conservatively, $4,000 annually.”

The document goes on to say:

“When we use the more optimistic estimates from the literature, wage boosts are over $9,000 for the average U.S. household.”

No less than Speaker Ryan’s website trumpeted the Council of Economic Advisers report claiming that on average, the proposed corporate tax cuts would result in at least a $4,000 annual increase in wages.

Now, some supporters of the tax bill may say this analysis is unfair because it is too early for the effects of the tax bill to show up in wages. By that logic, they also shouldn’t take credit for reported employment growth increases.
http://thehill.com/opinion/finance/...ll-short-of-what-was-promised-from-tax-reform

No one seems surprised at all. Was anyone really dumb enough to believe it?

 

[Gary K]

LOL. You are displaying your ignorance of economics again by quoting those who either have an agenda or are ignorant themselves.

The reason the rise in wages didn't take place is because of the number of people who had given up hope of ever finding a job again re-entered the job market and found jobs. That increase in the available pool of workers slowed the increase in the rise in wages as these people were willing to work at the first wage offered since they had been out of work for years. That wages went up at all is nothing short of amazing considering the numbers of people who have been out of work, and out of the government's official labor statistical pool for a long time. That people who were starving for want of work are now working is better for the country overall than higher wages. It means shorter welfare lines. Fewer people on food stamps, medicaid, etc....

 

[The Barbarian]

One excuse after another. That's how it works. No one really expected those promises to be honest ones.

"Oh, we didn't tell you. What we promised won't happen because... Did you really believe what we said?"

 

[Gary K]

Well, let's look at what the president of the Minneapolis Fed said on this issue.

Neel Kashkari has become the Federal Reserve’s foremost skeptic of the notion that the U.S. is experiencing a severe labor shortage.

Kashkari, who is the president of the Minneapolis Fed, points to the lack of significant upward pressure on wages as evidence debunking the claims that the U.S. lacks workers. The logic is pretty simple: if the supply of labor is so limited relative to demand, the price of labor should be swiftly rising.
The fact that the price of labor is not rising much suggests that perhaps labor is not in as short supply as some employers and special interest lobbying groups claim. Maybe these claims of a labor shortage are just covers for those who want U.S. labor costs to fall, which would raise profits in the short term.
Another theory is that labor prices have become stuck at low levels because employers, after so many years of high unemployment and minimal wage pressure, have become reluctant to raise wages. The tool of offering higher wages to attract new workers has fallen out of the toolkit of many American businesses and no one noticed because it wasn’t needed for so long. But now that there are far fewer unemployed people desperately hoping for a job, employers do not know where to turn to find new employees. They’ve forgotten how to poach workers from competitors with higher wages.

The rest of the article can be found at the following link.

http://www.breitbart.com/big-govern...kari-demolishes-claims-of-u-s-labor-shortage/

 

[Gary K]

One excuse after another. That's how it works. No one really expected those promises to be honest ones.

"Oh, we didn't tell you. What we promised won't happen because... Did you really believe what we said?"

LOL. He who lives in a glass house ought to be smarter than to throw stones. Let's take a look at all the promises the democrats have made in their "war on poverty" which has overseen a tremedous rise in poverty and the destruction of the black family, shall we? Let's look at before and after statistics of marxist policies and see what what they really caused. You have decades of lying to account for. You have decades of failed policies to make excuses for. You have trillions of dollars worth of spending to make excuses for.

So Trump didn't think so many people would re-enter the job market. For that you call him a liar. Well, account for all the lies of the democrats for more than 5 decades. Nothing they have promised has come true. Things have only deteriorated so that the situation is now many times worse than it was. Trump's so-called lies have left a status quo for the moment. Democrat lies have left a 5+ decade history of total and complete failure. Nothing they said would happen has come true, and the situation is now far worse than when they started.

 

[fool]

I'm keeping more of my own money and you hate that don't you?

 

[The Barbarian]

Barbarian observes:
One excuse after another. That's how it works. No one really expected those promises to be honest ones.

"Oh, we didn't tell you. What we promised won't happen because... Did you really believe what we said?"

LOL. He who lives in a glass house ought to be smarter than to throw stones.

Yep. The republicans were critical of the seven-year growth in wages, because it wasn't "big enough", and then when they get their chance, it falls flat. The promised wage growth didn't materialize. And now, they're making excuses.

Let's take a look at all the promises the democrats have made in their "war on poverty"

Hmmm... that was a half-century ago. Yer kinda desperate for a diversion, um? But it's worse for you than you think:

Of course, the Great Recession, prepared by George W. Bush...

...which has overseen a tremedous rise in poverty and the destruction of the black family, shall we?

Yes, some referred to Bush's economic program as the "war on the poor." He managed to bring the poverty rate up considerably.

So Trump didn't think so many people would re-enter the job market. For that you call him a liar.

Everyone admits he's a liar. But I didn't call him out for that particular lie. Would you like to see a list of his documented lies?

If your Marxist tax revision didn't provide the promised wage increases, maybe that's a wake-up call for you.

 

[Gary K]

Here's a video by Thomas Sowell. He and Walter E. Williams are two of the pre-eminent black authors of the last few decades. Both are economists, both came out of the projects, and both decry the marxist policies of the welfare state as having led to the destruction of the black family. Both are glad that they went through school before affirmative action was put in place. They credit the lack of affirmative action for their success in life.

Here is Thomas Sowell on what welfare policies actually do.

For anyone who really wants to understand these issues I would recommend Thomas Sowell's books. One book I recommend because I own it would be The Economics of Politics and Race, and another would be Civil Rights: Rhetoric or Reality. These books show exactly how destructive the welfare state is, and how many fallacies marxists create to support their baseless assertions. I have several of Thomas Sowell's books and they all have many pages of footnotes which document the things he says. Anything Thomas Sowell asserts he documents with evidence from other sources.

Here is an article by Sowell titled A Legacy of Liberalism.

Supreme Court Justice Oliver Wendell Holmes said there were "phrases that serve as an excuse for not thinking." One of these phrases that substitute for thought today is one that depicts the current problems of blacks in America as "a legacy of slavery."


New York Times writer Nicholas Kristof asserts that there is "overwhelming evidence that centuries of racial subjugation still shape inequity in the 21st century" and he mentions "the lingering effects of slavery." But before we become overwhelmed, that evidence should be checked out.


The evidence offered by Mr. Kristof in the November 16th issue of the New York Times seems considerably short of overwhelming, to put it charitably. He cites a study showing that "counties in America that had a higher proportion of slaves in 1860 are still more unequal today." Has he never heard statisticians' repeated warnings that correlation is not causation?


The South long remained a region that blacks fled by the millions -- for very good reasons. But, in more recent years, the net migration of blacks has been from the North to the South. No doubt they have good reasons for that as well.


But there is no reason to believe that blacks today are unaware of the history of slavery or of the Jim Crow era in the South. Indeed, there are black "leaders" who seem to talk about nothing else. Yet blacks who are moving back to the South seem more concerned with the present and the future than with the past.


Kristof's other "overwhelming" evidence of the current effects of past slavery is that blacks do not have as much income as whites. But Puerto Ricans do not have as much income as Japanese Americans. Mexican Americans do not have as much income as Cuban Americans. All sorts of people do not have as much income as all sorts of other people, not only in the United States, but in countries around the world. And most of these people were never enslaved.




If we wanted to be serious about evidence, we might compare where blacks stood a hundred years after the end of slavery with where they stood after 30 years of the liberal welfare state. In other words, we could compare hard evidence on "the legacy of slavery" with hard evidence on the legacy of liberals.


Despite the grand myth that black economic progress began or accelerated with the passage of the civil rights laws and "war on poverty" programs of the 1960s, the cold fact is that the poverty rate among blacks fell from 87 percent in 1940 to 47 percent by 1960. This was before any of those programs began.


Over the next 20 years, the poverty rate among blacks fell another 18 percentage points, compared to the 40-point drop in the previous 20 years. This was the continuation of a previous economic trend, at a slower rate of progress, not the economic grand deliverance proclaimed by liberals and self-serving black "leaders."


Ending the Jim Crow laws was a landmark achievement. But, despite the great proliferation of black political and other "leaders" that resulted from the laws and policies of the 1960s, nothing comparable happened economically. And there were serious retrogressions socially.


Nearly a hundred years of the supposed "legacy of slavery" found most black children being raised in two-parent families in 1960. But thirty years after the liberal welfare state found the great majority of black children being raised by a single parent.




The murder rate among blacks in 1960 was one-half of what it became 20 years later, after a legacy of liberals' law enforcement policies. Public housing projects in the first half of the 20th century were clean, safe places, where people slept outside on hot summer nights, when they were too poor to afford air conditioning. That was before admissions standards for public housing projects were lowered or abandoned, in the euphoria of liberal non-judgmental notions. And it was before the toxic message of victimhood was spread by liberals. We all know what hell holes public housing has become in our times. The same toxic message produced similar social results among lower-income people in England, despite an absence of a "legacy of slavery" there.


If we are to go by evidence of social retrogression, liberals have wreaked more havoc on blacks than the supposed "legacy of slavery" they talk about. Liberals should heed the title of Jason Riley's insightful new book, "Please Stop Helping Us."

 

[Gary K]

Here is an article by Walter E. Williams on welfare.

That the problems of today's black Americans are a result of a legacy of slavery, racial discrimination and poverty has achieved an axiomatic status, thought to be self-evident and beyond question. This is what academics and the civil rights establishment have taught. But as with so much of what's claimed by leftists, there is little evidence to support it.
The No. 1 problem among blacks is the effects stemming from a very weak family structure. Children from fatherless homes are likelier to drop out of high school, die by suicide, have behavioral disorders, join gangs, commit crimes and end up in prison. They are also likelier to live in poverty-stricken households. But is the weak black family a legacy of slavery? In 1960, just 22 percent of black children were raised in single-parent families. Fifty years later, more than 70 percent of black children were raised in single-parent families. Here's my question: Was the increase in single-parent black families after 1960 a legacy of slavery, or might it be a legacy of the welfare state ushered in by the War on Poverty?
According to the 1938 Encyclopaedia of the Social Sciences, that year 11 percent of black children were born to unwed mothers. Today about 75 percent of black children are born to unwed mothers. Is that supposed to be a delayed response to the legacy of slavery? The bottom line is that the black family was stronger the first 100 years after slavery than during what will be the second 100 years.

At one time, almost all black families were poor, regardless of whether one or both parents were present. Today roughly 30 percent of blacks are poor. However, two-parent black families are rarely poor. Only 8 percent of black married-couple families live in poverty. Among black families in which both the husband and wife work full-time, the poverty rate is under 5 percent. Poverty in black families headed by single women is 37 percent. The undeniable truth is that neither slavery nor Jim Crow nor the harshest racism has decimated the black family the way the welfare state has.
The black family structure is not the only retrogression suffered by blacks in the age of racial enlightenment. In every census from 1890 to 1954, blacks were either just as active as or more so than whites in the labor market. During that earlier period, black teen unemployment was roughly equal to or less than white teen unemployment. As early as 1900, the duration of black unemployment was 15 percent shorter than that of whites; today it's about 30 percent longer. Would anyone suggest that during earlier periods, there was less racial discrimination? What goes a long way toward an explanation of yesteryear and today are the various labor laws and regulations promoted by liberals and their union allies that cut off the bottom rungs of the economic ladder and encourage racial discrimination.


Labor unions have a long history of discrimination against blacks. Frederick Douglass wrote about this in his 1874 essay titled "The Folly, Tyranny, and Wickedness of Labor Unions," and Booker T. Washington did so in his 1913 essay titled "The Negro and the Labor Unions." To the detriment of their constituents, most of today's black politicians give unquestioning support to labor laws pushed by unions and white liberal organizations.
Then there's education. Many black 12th-graders deal with scientific problems at the level of whites in the sixth grade. They write and do math about as well as white seventh- and eighth-graders. All of this means that an employer hiring or a college admitting the typical black high school graduate is in effect hiring or admitting an eighth-grader. Thus, one should not be surprised by the outcomes.
The most damage done to black Americans is inflicted by those politicians, civil rights leaders, and academics who assert that every problem confronting blacks is a result of a legacy of slavery and discrimination. That's a vision that guarantees perpetuity for the problems.

https://townhall.com/columnists/walterewilliams/2017/09/20/the-welfare-states-legacy-n2382991

 

[Gary K]

Walter E. Williams on government subsidizing bad behavior.

 

[Gary K]

Walter E. Williams, Up From the Projects. William's commentary on discrimination, affirmative action, civil rights laws, and other hot button topics, is excellent. He destroys the marxist agenda.

 

[The Barbarian]

Your Marxist propaganda is one thing. But the facts don't support it:

As you see, real income for blacks has increased markedly over the years. This is what has Sowell and Williams so upset. Except for Bush's Great Recession, it's been a general pattern of income increase.

To give Affirmative Action all the credit is misplaced, however. The right is understandably shaken by the economic rise of black citizens, but Affirmative Action, in my opinion, is not the primary cause.

You need to think about this a little more carefully, and forget your Marxist theories.

 

[Gary K]

LOL. Oh, I love this. You're so ignorant of economics it's not funny.

Your graph shows what? An increase of approximately 33% over a 44 year span. That's an approximate increase in income of .75% per year. That's right. Only 3/4 of 1 percent growth per year. Whoopee. What a deal. Do you know what inflation averaged over that same time span? 4.38%. That's right. They lost approximately 3.63% of their income every year over a span of 44 years to inflation. In other words, barby, they were far poorer at the end of that 44 year span than they were at the beginning of it.

Prices went up, in that time span, 559.8%. Oh, yeah. What a great demonstration of the building of wealth.... It took $659.80 of 2012 dollars to buy what $100 of 1968 dollars bought back in 1968. Oh, it was such an increase in their standard of living. In other words, barby, if someone earned $5000 in 1968 to equal that buying power in 2012 they had to earn $32,990 in 2012. That's only about a 75% loss in purchasing power over those 44 years.

Yippee skippy. What a great thing marxist encomic policies are. Let's dance. We're all getting rich.

 

[The Barbarian]

LOL. Oh, I love this. You're so ignorant of economics it's not funny.

Well, you know what economic ignoramuses barbarians are. Let's see what's irritated you so much, this time.

Your graph shows what? An increase of approximately 33% over a 44 year span. That's an approximate increase in income of .75% per year. That's right. Only 3/4 of 1 percent growth per year. Whoopee. What a deal. Do you know what inflation averaged over that same time span? 4.38%. That's right. They lost approximately 3.63% of their income every year over a span of 44 years to inflation. In other words, barby, they were far poorer at the end of that 44 year span than they were at the beginning of it.

Notice that those aren't inflated dollars. They are in constant 2012 adjusted dollars. You didn't read the data on the chart. Ooops. Apparently, someone was an ignoramus, but it wasn't the Barbarian this time.

What a great thing marxist encomic policies are.

Your Marxist economics let you down on this one. Go back and see if you can figure it out.

 

[Gary K]

Well, you know what economic ignoramuses barbarians are. Let's see what's irritated you so much, this time.



Notice that those aren't inflated dollars. They are in constant 2012 adjusted dollars. You didn't read the data on the chart. Ooops. Apparently, someone was an ignoramus, but it wasn't the Barbarian this time.



Your Marxist economics let you down on this one. Go back and see if you can figure it out.

LOL. Let's say I give you your assertion. 100% of it. That is still only an increase of income that averages 3/4 of 1 percent per year. Wow. What a net positive. And you point to that as a big success. That's a failure in anyone's book, but yours. An economy that only grew 3/4 of 1 percent a year is considered to be the next thing to a recession. It's called stagnation. Economic stagnation. Personal income that only grows 3/4 of 1 percent per year is also stagnation. Economic stagnation. To have it grow like that over a 44 year time span is a total failure.

According to the rule of 72 a 2% yearly increase over a period of 36 years doubles the starting amount. By that same rule a 3% increase per year doubles the base amount in 24 years. Your time span covered 44 years and didn't come even close to doubling the base amount. It's. Total. Economic. Failure.

 

[WizardofOz]

[MENTION=92]The Barbarian[/MENTION] - do you think inflation is a problem when compared to the overall stagnation of 'real wages'?

[MENTION=20423]ffreeloader[/MENTION] - are you comfortable with Republicans increasing the deficit by $1 trillion?

Both parties are playing the same game. They increase spending and hand out much more welfare to corporations than individual citizens.

They're playing us all.

 

[The Barbarian]

LOL. Let's say I give you your assertion.

Doesn't matter what you do. You messed up. Now you're looking for a way out. We all get that. But all you really can do, is learn from it, and learn a little economics so you don't embarrass yourself next time.

 

[The Barbarian]

[MENTION=92]The Barbarian[/MENTION] - do you think inflation is a problem when compared to the overall stagnation of 'real wages'?

Yep. It is. My point was that since the mid-60s, black workers have increased their real wages. More so than the average white worker.

Which is what seems to really rile black conservatives, as freeloader pointed out.

 

[WizardofOz]

Meanwhile

Corporatocracy has long taken hold

 

[The Barbarian]

Yes, real wages have not kept up with productivity. If socialism triumphs in the United States, it will be because of that.

The point is that black workers have improved their condition at a faster rate than other workers, which has enraged conservatives.