2018-01-05 — washingtonpost.com
American wages rose a sluggish 2.5 percent last year, according to a Labor Department report released Friday morning. That's the same rate of wage growth as under President Barack Obama. Historically, wages have grown more than 3.5 percent in a typical economic upturn, but that hasn't happened in this expansion.
Trump is facing a similar problem that plagued Obama: The stock market is soaring, but wages are stagnant. The Dow Jones industrial average jumped 25 percent in 2017 and is up more than 30 percent since Trump won the election, but those gains largely accrue to the wealthiest Americans, including many of Trump's donors and close friends. Almost half of the country doesn't have a single dollar in the stock market. While some in the middle class do invest via pension funds and 401(k) retirement plans, only a quarter of American households have more than $25,000 in the market, according to a Deutsche Bank report released this week.
"Trump's donors are doing spectacularly well. But Trump's base in West Virginia and Kentucky hasn't really enjoyed much of the recovery," says Greg Valliere, chief global strategist at Horizon Investments and author of a daily political newsletter.
So far, only 18 of the companies in the S&P 500 stock index have cited the tax cuts in announcing additional pay of any kind. Only five of those companies -- all banks -- announced a true wage hike, lifting hourly wages to at least $15 an hour. The rest are offering workers a one-time bonus (typically of $1,000) or a modest amount of additional money in a retirement plan.
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