Six months after the Tax Cut and Jobs Act became law, there’s still little evidence that the average job holder is feeling the benefit.
Worker pay in the second quarter dropped nearly one percent below its first-quarter level, according to the PayScale Index, one measure of worker pay. When accounting for inflation, the drop is even steeper. Year-over-year, rising prices have eaten up still-modest pay gains for many workers, with the result that real wages fell 1.4 percent from the prior year, according to PayScale. The drop was broad, with 80 percent of industries and two-thirds of metro areas affected.
“Now, economic confidence has been good, we’re in a strong economy, GDP is growing, but the question has been, where’s the paycheck?” said Katie Bardaro, vice president of data analytics at PayScale.
The answer is, largely, in the companies’ coffers. Businesses are spending nearly $700 billion on repurchasing their own stock so far this year, according to research from TrimTabs. Corporations set a record in Q2, announcing $433 billion worth of buybacks — nearly doubling the previous record, which was set in Q1.
Corporate profits have rarely swept up a bigger share of the nation’s wealth, and workers have rarely shared a smaller one.
The lopsided split is especially pronounced given how low the official unemployment rate has sunk. Throughout the recession and much of its aftermath, when many Americans were grateful to receive a paycheck instead of a pink slip, jobs and raises were in short supply. Now, complaints of labor shortages are as common as tweets. For the first time in a long while, workers have some leverage to push for more.
Yet many are far from making up all the lost ground. Hourly earnings have moved forward at a crawl, with higher prices giving workers less buying power than they had last summer. Last-minute scheduling, no-poaching and noncompete clauses, and the use of independent contractors are popular tactics that put workers at a disadvantage. Threats to move operations overseas, where labor is cheaper, continue to loom.
And in the background, the nation’s central bankers stand poised to raise interest rates and deliberately rein in growth if wages climb too rapidly.
Workers, understandably, are asking whether they are getting a raw deal.
I am not sure how to respond to this exactly, but I will try. Wages going down means employers should buy more labor. Ten percent unemployment means every ten years 7.4 billion peoples labor is thrown away. That is a lot of food for the hungry. The prices going up just provides the money to build the new factories to provide more goods. If they do not, and this may sound sick, but let he who has no sin cast the first stone, and revenge is a dish best served cold. For when people die seldom does the money go to someone who has more than the deceased. The wages of sin are death -The bible
Thank God for my Labor Union!
“Now, economic confidence has been good, we’re in a strong economy, GDP is growing, but the question has been, where’s the paycheck?” said Katie Bardaro, vice president of data analytics at PayScale… The answer is, largely, in the companies’ coffers. Businesses are spending nearly $700 billion on repurchasing their own stock so far this year.
This isn’t true. When a company buys back stock it takes money it has and gives that money to stock owners in exchange for stock.
That said, stock buybacks are horrible. They are good for the share price in the short term but bad for the company in the long term. They are really good for executives who have stock options. They get a much more valuable product when they raise share prices.
This is just one of many ways the executive class bleeds Americans and our economy for their gain.
Is this how we make America great again? I don’t think so. This is how the rich get richer and the poor get poorer.
Pessimism never helped many people. Ask what you would do better if you were in their shoes. Is that how we make America great again? I think so.
Labor shortage? What labor shortage?
They are probably talking about “skilled” positions which take a lot of stuff beyond high school.
Nowhere near as many as they say. Look at all the people who were displaced by H1-B’s for instance. Labor shortage to them means shortage of people who will work for the wages they’re willing to pay.
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