Taxes

Wages Are Still Flat Following the GOP’s Tax Cuts

JM Ashby
Written by JM Ashby

Wages rose slightly less than expected during the month of June according to a Labor Department report that was released on Friday, but to say that wages are increasing would be misleading.

While wages have increased, inflation and the cost of living has also increased by a nearly equal amount, effectively canceling any gains.

From the Wall Street Journal:

Wage growth isn’t making as much of a difference for workers as some would hope. Wages rose 2.7% from a year earlier in June, below the 2.8% increase economists had expected. Compared to a month earlier, wages grew 0.2%. But inflation is also picking up and could soon outpace wages, meaning workers likely aren’t feeling any richer.

While wages rose by over 2 percent, inflation also rose by over 2 percent and there's a strong possibility that inflation will soon grow faster than wages do in which case wages will decrease.

We already saw a glimpse of that in last month's report which showed that inflation slightly outpaced wage growth by 0.1 percent during the month of May. Wage growth during the month of June was just 0.1 percent above inflation.

Republicans repeatedly claimed their sweeping tax cuts for corporations and the rich would lead to an explosion of wage growth during their campaign to pass it, but that's just not happening and it's never going to.

It's not as if the inflation we're seeing is a force of nature, by the way. Depending on which economist you ask, it could be directly attributed to the GOP's policy of pumping trillions into the economy both through tax cuts and increased federal spending at the same time.

  • katanahamon

    This is the Republican smoke and mirrors they always hoodwink their stupidass constituency with. Why voters fall for it boggles my mind. Wait for the inevitable crash..the rich will be so rich they won’t give a crap, the Dems will spend two terms cleaning up the mess (if it’s not irretrievable by then) and then the dopes will have forgotten that this was all caused by the idiotic get rich quick schemes of the right and vote them back in. Oh, wait, am I talking about Bush, Rump, or the next one? How stupid are going to allow America to get? We must regain sanity..we must eliminate for-profit healthcare and bring down costs for education. We cannot continue to support the useless, wasteful health insurance and drug company stranglehold on our financial futures and economy.

  • muselet

    Kevin Drum:

    An economic boost was never the point of the tax cuts. Making rich people richer was the point, and that worked great.

    Republican economics may be insane and destructive, but … No. There is no ‘but.’ Republican economics is (are?) insane and destructive.

    –alopecia

  • Aynwrong

    As has been said, “Economic anxiety my ass!”