Wage increases are finally accelerating and lower wage workers are benefiting as well

[Axulus]

Interesting perspective:

Average hourly earnings grew 0.4% in August, which meant they were up 2.9% from a year ago, the largest 12-month increase since the economic recovery started in mid-2009. By contrast, these wages were up 2.6% in the 12-months ending in August 2017. Moreover, this measure of wages doesn't include extra earnings from irregular bonuses and commissions, like those paid out since the tax cut was passed late last year.

Total wages, which factors in both average hourly earnings as well as the total number of hours worked, are up 5.1% in the past year, meaning consumers have plenty of earnings to keep increasing spending.

Nonetheless, many still argue that the 2018 corporate tax cut didn't help workers. Nothing could be further from the truth. In December 2017, figures on average weekly earnings as well as private payrolls suggested private-sector workers were earning wages at a $6.0 trillion annual rate. In August, those total wages had increased to a $6.2 trillion annual rate – a boost of $200 billion per year. By contrast, corporate profits - which have also grown rapidly - were up $100 billion annualized from the end of 2017 through the second quarter. Workers have taken home two times more than companies!

When hit with this data, the anti-tax cutters argue that this increase in wages has been concentrated at the top of the pay-scale. The rich are getting richer and the tax cuts haven't helped lower to middle income workers. Guess what? This isn't true, either.

Usual earnings for the median full-time wage & salary worker grew 2.0% in the year ending in the second quarter this year. But these earnings grew 3.9% for workers at the bottom 10th percentile, while workers at the top 10th percentile had their usual earnings grow only 1.2%. Usual earnings for people who never finished high school are up 7.6% in the past year, faster growth than for any other educational category.

https://www.ftportfolios.com/blogs/EconBlog/2018/9/10/wage-growth-steps-up

 

[ronburgundy]

I'm not too interested in the "facts" presented by an article written by and for people so cognitive deficient that they make causal conclusions based upon a short-term single year change in a highly unstable variable that changes year to year for countless reasons.

Here some long-term perspective and more meaningful data:

Under Bush Sr.'s GOP supported policies median wages dropped about 2%. Under Clinton, median wages turned around and increased by 16%. Then Bush Jr. implemented more GOP backed policies and median wages flattened then began their steepest decline in many decades during his last 2 years. Obama took office and the rate of slide into a Great Depression was slowed and eventually halted. Median wages turned around starting in 2011 an increased by 11% over his last 4 years in office, which is a rate of 2.66% per year.

According to your source, median wages increased under Trump by 2% in the last year. That is a reduction in the rate of wage growth that Trump inherited from Obama. So at the very best, one can only conclude that Trump's actions have merely slowed progress and have not yet (in a single year) completely destroyed all the gains for the middle class that were already well under way when he took office. If you believe that Trump deserves to be applauded for middle class wage gains, then Trump has a bridge he'd likely to sell you (but watch out, he is a well known serial criminal).

 

[Loren Pechtel]

And how much of that $200 billion was simply reorganizing for tax purposes? You expect "income" changes when you change the tax structure.

 

[laughing dog]

This part - Moreover, this measure of wages doesn't include extra earnings from irregular bonuses and commissions, l - suggests to me that this measure excludes a significant portion of possible income growth to higher earners, since low wage earners probably do not have much opportunity for irregular bonuses and commissions. That means the relatively low increase in higher wages is expected, since it excludes a possible major source of income.