FacebookTwitterRedditEmail

What’s Happened to the Big Wage Increases Promised by Republicans?

The recent announcementby the founder of Amazon, Jeff Bezos, that his company would give substantial raises to its lowest-paid employees should not blind us to the fact that most American workers are not receiving big wage increases. In fact, the real wages (that is, wages adjusted for inflation) of average American workers are declining.

When justifying the Republicans’ December 2017 $1.5 trillion tax cut for corporations and the wealthy, President Donald Trump and House Speaker Paul Ryan claimed that it would result, in 2018, in wage gains for American workers ranging from $4,000 to $9,000each.

But, in reality, nothing like that has materialized. Instead, as the U.S. Labor Department reported, between the second quarter of 2017 and the second quarter of 2018, the real wages of American workers actually declined. Indeed, the second quarter of 2018 was the third straight quarter―all during the Trump administration―when inflation outpaced wage growth. The last time wages grew substantiallyabove inflation was in 2016, during the Obama administration. Consequently, by August 2018, as the Pew Research Center reported, the purchasing power of American workers’ wages was at the same level as in 1978.

Why did the Republican promises go unfulfilled? A key reason for stagnating wages lies in the fact that U.S. corporations used their windfallderived from the slashing of the corporate tax rate from 35 to 21 percent under the 2017 GOP tax legislation to engage in stock buybacks (thereby raising their stock prices) and to increase dividends to share-holders. This practice produced substantial gains for big corporate investors but did nothing for workers. Although it appears that some workers (a reported 4 percent) did receive pay raises thanks to the tax cuts, it’s estimated that corporations spent 88 times more on stock buybacks than on pay increases for workers.

Another important long-term factor that has depressed workers’ wages is the dwindling membership and declining power of America’s labor unions. Once a force that created a more level playing field between workers and their bosses, unions have been badly weakened in recent years by Republican-sponsored anti-union measures, such as so-called “Right-to-Work” lawsand the subversion of the National Labor Relations Board.

The Republican opposition to raising the minimum wage has also undermined wage levels. In the past, numerous Republican Presidentsbacked legislation that increased the minimum wage. But that position has radically changed as the Republican Party has turned sharply to the Right. Although the federal minimum wagehas remained at $7.25 for more than nine years, Trump and Congressional Republicans have blocked legislative efforts to raise this pathetically low wage floor, contending that they saw no need for a federal minimum wage. Moreover, Republicans have used their control of state governments, as in Missouriand Iowa, to block cities and counties from raising local wage levels through legislation.

By contrast, Republican policies have done wonders for the wealthy and their corporations. By the fall of 2018, the stock market had reached new heightsand the fortunes of the wealthiest Americans had grown remarkably. According to Forbes, the wealth of the 400 richest Americans averaged $7.2 billion each―a hefty increase over the previous year, when they averaged $6.7 billion. Moreover, the ten richest Americans possessed $730 billion among them―an increase in their wealth of nearly 20 percent over the past year. And the very wealthiest American, Jeff Bezos, nearly doubled his wealth during this time―to $160 billion. From the Republican standpoint, their programs had been a great success. Accordingly, the GOP-controlled House of Representatives voted in late Septemberto make its steep tax cuts for corporations and the wealthy permanent.

So let’s stop saying that Republican rule in the United States―from the White House, to the Congress, to the Supreme Court, and to the states―has been dysfunctional. It’s been very functional―not for American workers, of course, but certainly for those people Bernie Sanders has referred to as “the billionaire class.”

More articles by:

Dr. Lawrence Wittner is Professor of History emeritus at SUNY/Albany and the author of Confronting the Bomb (Stanford University Press.)

March 25, 2019
Dave Lindorff
The TSA’s Role as Journalist Harasser and Media ‘Watchdog’
Tanya Golash-Boza – Michael Golash
Epifanio Camacho: a Militant Farmworker Brushed Out of History
Robert Fisk
Don’t Believe the Hype: Here’s Why ISIS Hasn’t Been Defeated
Jack Rasmus
The Capitulation of Jerome Powell and the Fed
Lawrence Davidson
Israel’s Moves to the Right
John Feffer
After Trump
James Ridgeway
Good Agent, Bad Agent: Robert Mueller and 9/11
Dean Baker
The Importance of Kicking Up: Changing Market Structures So the Rich Don’t Get All the Money
Lawrence Wittner
What Democratic Socialism Is and Is Not
Thomas Knapp
Suppressing Discussion Doesn’t Solve the Problem. It is the Problem.
Stephen Cooper
“I’m a Nine-Star General Now”: an Interview with Black Uhuru’s Duckie Simpson
Andrew Moss
Immigration and the Democratic Hopefuls
Weekend Edition
March 22, 2019
Friday - Sunday
Henry Giroux
The Ghost of Fascism in the Post-Truth Era
Gabriel Rockhill
Spectacular Violence as a Weapon of War Against the Yellow Vests
H. Bruce Franklin
Trump vs. McCain: an American Horror Story
Paul Street
A Pox on the Houses of Trump and McCain, Huxleyan Media, and the Myth of “The Vietnam War”
Andrew Levine
Why Not Impeach?
Bruce E. Levine
Right-Wing Psychiatry, Love-Me Liberals and the Anti-Authoritarian Left
Jeffrey St. Clair
Roaming Charges: Darn That (American) Dream
Charles Pierson
Rick Perry, the Saudis and a Dangerous Nuclear Deal
Moshe Adler
American Workers Should Want to Transfer Technology to China
David Rosen
Trafficking or Commercial Sex? What Recent Exposés Reveal
Nick Pemberton
The Real Parallels Between Donald Trump and George Orwell
Binoy Kampmark
Reading Manifestos: Restricting Brenton Tarrant’s The Great Replacement
Brian Cloughley
NATO’s Expensive Anniversaries
Ron Jacobs
Donald Cox: Tale of a Panther
Joseph Grosso
New York’s Hudson Yards: The Revanchist City Lives On
REZA FIYOUZAT
Is It Really So Shocking?
Bob Lord
There’s Plenty of Wealth to Go Around, But It Doesn’t
John W. Whitehead
The Growing Epidemic of Cops Shooting Family Dogs
Jeff Cohen
Let’s Not Restore or Mythologize Obama 
Christy Rodgers
Achieving Escape Velocity
Monika Zgustova
The Masculinity of the Future
Jessicah Pierre
The Real College Admissions Scandal
Peter Mayo
US Higher Education Influence Takes a Different Turn
Martha Rosenberg
New Study Confirms That Eggs are a Stroke in a Shell
Ted Rall
The Greatest Projects I Never Mad
George Wuerthner
Saving the Big Wild: Why Aren’t More Conservationists Supporting NREPA?
Norman Solomon
Reinventing Beto: How a GOP Accessory Became a Top Democratic Contender for President
Ralph Nader
Greedy Boeing’s Avoidable Design and Software Time Bombs
Tracey L. Rogers
White Supremacy is a Global Threat
Nyla Ali Khan
Intersectionalities of Gender and Politics in Indian-Administered Kashmir
Karen J. Greenberg
Citizenship in the Age of Trump: Death by a Thousand Cuts
Jill Richardson
Getting It Right on What Stuff Costs
Matthew Stevenson
Pacific Odyssey: Puddle Jumping in New Britain
FacebookTwitterRedditEmail