Texas Insider Report: AUSTIN Texas Its a good thing House Speaker Nancy Pelosi delivered her first speech as the newly re-elected speaker of the House the day before the Bureau of Labor Statistics (BLS) released its latest jobs report. That report undermined a key theme of Pelosis message which has been a Democratic theme for the last decade: that the middle class is struggling because of stagnant wage growth.
We must be champions of the middle class and all those who aspire to it …" she told the assembled House of Representatives recently.
To increase paychecks by rebuilding America with green and modern infrastructurefrom sea to shining sea."
Um those paychecks are already increasing and not because of Democrats redistributionist efforts.
According to the BLS:
Over the year average hourly earnings have increased 3.2."
Thats real wage growth though Pelosi might consider it real crumbs." But thats not all. CNBC reported in January of last year:Workers looking for fatter paychecks had their best year in 2017 since before the financial crisis... The Employment Cost Index a measure of Salary & Benefit Costs registered a 2.6 gain for the full year tied for the best since 2007 the Bureau of Labor Statistics reported."By contrast wage growth was stagnant for most of President Barack Obamas eight years in office. And he used that stagnation to justify massive government spending including billions of dollars on green energy projects just like Pelosi wants. Those efforts utterly failed to boost average workers incomes. The Tax Cuts and Jobs Act of 2017" passed in December of 2017 played a major role in recent gains by cutting the corporate income tax rate from 35 to 21 among other changes.
Bonuses and raises were handed out and now we are seeing the result of that law: fatter paychecks. Companies immediately began repatriating billions of dollars that were sitting offshore.
Many Democrats want to repeal that tax cut legislation and some even want to raise taxes even higher than they were.
For some reason they believe when corporations pay higher taxes they also pay higher wages.
But while the wage-growth news is good we cant end without a warning. Trumps trade wars could undermine the economic progress. Disrupted markets can lead to lower profits and reduced hiring as Apple recently realized. It is imperative the administration find a workable solution if we want job growth and wage increases and the recent solid economic growth to continue. Ironically the only ones who actually do show that independence are Republican appointees the
very ones that Democrats so strongly oppose.
This PolicyByte was written by Dr. Merrill Matthews resident scholar with the Institute for Policy Innovation.
