Washington, D.C. — Kate Bahn, economist at the Center for American Progress, released the following statement today after the U.S. Bureau of Labor Statistics showed that last month, the economy added 228,000 jobs, and the unemployment rate remained unchanged at 4.1 percent. Year-over-year wage growth was 2.5 percent.
The Trump Administration’s celebration of a rising stock market as evidence of a strong economy is a deeply cynical bit of misdirection. The wealthiest 10 percent of households own more than 80 percent of all stocks, so these changes say little about how most working households are faring.
The benefits of a tight labor market haven’t translated into strong wage growth, with nominal wage growth at 2.5 percent year-over-year—below what is needed to keep wages above inflation. Deep economic inequality, where corporations and the ultra-rich get the vast majority of the benefits of the economic recovery and workers struggle to capture meaningful gains, remains persistent. The GOP tax bills that recently passed the House and Senate will only further exacerbate this trend—a trend that has led to wage stagnation and financial insecurity for low- and middle-income Americans. To be clear, the House and Senate GOP tax bills represent a massive giveaway to companies under the premise that it will trickle down to workers, with no evidence from economic history that decreasing corporate tax rates will lead to higher wages. A looming government shutdown further threatens everyday Americans and represents billions lost from the U.S. economy on a daily basis.
Meanwhile, many working- and middle-class workers can expect their taxes to rise and for Congressional Republican leaders to take a swing at Medicare, Medicaid, and Social Security—all to pay for highly unnecessary corporate tax cuts. Further, with Federal Reserve Chair Janet Yellen soon to be replaced by a less-qualified candidate, the Fed will likely continue their plan to slowly increase interest rates, but without Yellen’s keen eye on balancing interest rate increases against labor market dynamics.
Related resource: The State of the U.S. Labor Market: Pre-November 2017 Jobs Release by Annie McGrew and Kate Bahn
For more information or to speak with an expert, contact Allison Preiss at [email protected] or 202.478.6331.