Stagnant Wages in Wake of Trump/GOP Tax Scam Hurt Workers and Future Retirees

 

Underneath the major headlines about the death of Senator McCain and the latest iterations of the Trump scandals, a theme has emerged in news coverage about how the president and his party’s policies are affecting working people.  The theme is that, despite promises that the Trump/GOP tax scheme would benefit everyday Americans, real wages remain stagnant – or worse – under President Trump.

A quick look at these headlines tells a story of an economic “boom” that has mainly benefited the wealthy and already profitable corporations:

Trump’s promises to ‘forgotten man’ undercut by wage stagnation – Bloomberg

Despite Strong Economy, Many Americans Struggling to Get By – New York Times/Associated Pres

Trump’s tax plan is failing to give American workers the wage growth he promised – Newsweek

Bloomberg reporters Toluse Olorunnipa and Shobhana Chandra contrast President Trump’s promise to help America’s “forgotten man and woman” with the reality of the post-tax cut “boom.”

“Real wages have remained mostly stagnant, despite an expanding economy, record stock prices, soaring corporate profits, and a giant deficit-fueled stimulus from Trump’s tax cuts that took effect Jan. 1, 2018.” – Bloomberg

Olorunnipa and Chandra report that hourly wages (adjusted for inflation) had fallen 0.2 percent in July compared to a year earlier, because worker pay is not rising fast enough to compensate for inflation.  Real wages are actually growing slower under President Trump than during Barack Obama’s second term.

The New York Times/Associated Press story makes clear that these figures translate into real economic pain for working families:

“About 40 percent of American families struggled to meet at least one of their basic needs last year, including paying for food, health care, housing or utilities.” – New York Times/Associated Press

How can the president and his party ask us to celebrate a booming economy in which nearly half of American families cannot afford basics like food, housing, and healthcare?  Clearly, this new prosperity has not trickled down to working people.  That’s because the benefits of the tax cut went disproportionately to the wealthy and big corporations – who, instead of sharing the windfall with workers or investing in new capacity, are spending $1 trillion of their tax breaks on stock buybacks, not to mention CEO bonuses.  As conservative columnist Jennifer Rubin points out in the Washington Post, Democrats are reminding voters in advance of November’s elections just how hollow the Republicans’ promises to working people really were:

“Thanks to the GOP hype, for now Democrats can rightly claim Trump that Republicans pulled a bait and switch on the voters.” – Jennifer Rubin, Washington Post

One less obvious, but equally dangerous, consequence of wage stagnation is its direct effect on future Social Security beneficiaries.  Stagnating wages mean reduced payroll contributions by workers, lowering their lifetime earnings, and in turn, their Social Security retirement benefits.  When they retire – or become disabled – and need their benefit checks, those checks simply may not be big enough.

Making matters worse, Republicans in Congress have repeatedly called for “reform” (i.e., cuts) to Social Security and Medicare to pay for the Trump/GOP tax scam.  Just last week, House Budget Committee chairman Steve Stivers affirmed during a CNBC interview that Americans’ earned benefits were on the table, despite President Trump’s now broken promises “not to touch” Social Security and Medicare.

This, of course, makes it even more important that seniors’ advocates continue to push for expanding – rather than cutting – earned benefits.  This movement will get a big boost on September 13th, when members of Congress launch Expand Social Security caucuses in the House and Senate, under the leadership of Rep. John Larson (D-CT), Bernie Sanders (I-VT), and Elizabeth Warren (D-MA).

The National Committee has promoted expansion of Social Security since 2013 under the banner of the Boost Social Security Now campaign, which calls for increasing the basic benefit, creating family caregiver credits, and more generous cost-of-living adjustments for seniors – paid for by lifting the cap on payroll contributions so that the wealthy begin paying their fair share.  At a time when the top 1% are thriving and the working and middle classes continue to struggle with stagnating wages and rising costs, expanding Social Security is the right thing to do.

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