FacebookTwitterGoogle+RedditEmail

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.)

February 21, 2019
Nick Pemberton
Israel, Venezuela and Nationalism In The Neoliberal Era
Chris Orlet
The Bill and Melinda Gates’ Fair Taxation Scaremongering Tour
Bruce E. Levine
“Heavy Drinking” and the NYT’s Offensive Obit on Herbert Fingarette
Lisi Krall
This Historical Moment Demands Transformation of Our Institutions. The Green New Deal Won’t Do That
Stephanie Savell
Mapping the American War on Terror: Now in 80 Countries
Daniel Warner
New York, New York: a Resounding Victory for New York Over Amazon
Russell Mokhiber
With Monsanto and Glyphosate on the Run AAAS Revokes Award to Scientists Whose Studies Led to Ban on Weedkiller in Sri Lanka and Other Countries
Jesse Jackson
Trump’s Fake National Emergency Moves America Closer to an Autocracy
Alex Campbell
Tracing the Threads in Venezuela: Humanitarian Aid
Jonah Raskin
Mitchel Cohen Takes on Global and Local Goliaths: Profile of a Lifelong Multi-Movement Organizer
Binoy Kampmark
Size Matters: the Demise of the Airbus A380
Elliot Sperber
For Your Children (or: Dead Ahead)
February 20, 2019
Anthony DiMaggio
Withdrawal Pains and Syrian Civil War: An Analysis of U.S. Media Discourse
Charles Pierson
When Saudi Arabia Gets the Bomb
Doug Johnson Hatlem
“Electability” is Real (Unless Married with the Junk Science of Ideological Spectrum Analysis)
Kenneth Surin
The Atlantic Coast Pipeline: Another Boondoggle in Virginia
John Feffer
The Psychology of the Wall
Dean Baker
Modern Monetary Theory and Taxing the Rich
Russell Mokhiber
Citizens Arrested Calling Out Manchin on Rockwool
George Ochenski
Unconstitutional Power Grabs
Michael T. Klare
War With China? It’s Already Under Way
Thomas Knapp
The Real Emergency Isn’t About the Wall, It’s About the Separation of Powers
Manuel García, Jr.
Two Worlds
Daniel Warner
The Martin Ennals and Victorian Prize Winners Contrast with Australia’s Policies against Human Dignity
Norman Solomon
What the Bernie Sanders 2020 Campaign Means for Progressives
Dan Corjescu
2020 Vision: A Strategy of Courage
Matthew Johnson
Why Protest Trump When We Can Impeach Him?
William A. Cohn
Something New and Something Old: a Story Still Being Told
Bill Martin
The Fourth Hypothesis: the Present Juncture of the Trump Clarification and the Watershed Moment on the Washington Mall
February 19, 2019
Richard Falk – Daniel Falcone
Troublesome Possibilities: The Left and Tulsi Gabbard
Patrick Cockburn
She Didn’t Start the Fire: Why Attack the ISIS Bride?
Evaggelos Vallianatos
Literature and Theater During War: Why Euripides Still Matters
Maximilian Werner
The Night of Terror: Wyoming Game and Fish’s Latest Attempt to Close the Book on the Mark Uptain Tragedy
Conn Hallinan
Erdogan is Destined for Another Rebuke in Turkey
Nyla Ali Khan
Politics of Jammu and Kashmir: The Only Viable Way is Forward
Mark Ashwill
On the Outside Looking In: an American in Vietnam
Joyce Nelson
Sir Richard Branson’s Venezuelan-Border PR Stunt
Ron Jacobs
Day of Remembrance and the Music of Anthony Brown        
Cesar Chelala
Women’s Critical Role in Saving the Environment
February 18, 2019
Paul Street
31 Actual National Emergencies
Robert Fisk
What Happened to the Remains of Khashoggi’s Predecessor?
David Mattson
When Grizzly Bears Go Bad: Constructions of Victimhood and Blame
Julian Vigo
USMCA’s Outsourcing of Free Speech to Big Tech
George Wuerthner
How the BLM Serves the West’s Welfare Ranchers
Christopher Fons
The Crimes of Elliot Abrams
FacebookTwitterGoogle+RedditEmail