As
President Donald Trump and corporate media outlets on Friday
enthusiastically touted new GDP figures showing that the U.S. economy
grew by 4.1 percent in the second quarter of 2018, many economists
and progressive commentators were quick to counter the glowing
headlines by pointing out that corporations and the rich are
feasting on most of the growth while most workers see their
wages fall.
"What
the president won't talk about is that there is slow—and
even negative—growth in real wages adjusted for inflation. So if
GDP is rising, but wages [are] falling, the money is going to the
top," Timothy McBride, a health economist at Washington
University in St. Louis, noted in
response to Trump's celebratory speech on the White House lawn on
Friday.
"You
can't eat GDP," writer Dante Atkins added on
Twitter. "GDP doesn't pay the bills."
As
Jared Bernstein, senior fellow at the Center on Budget and
Policy Priorities, observed in
an analysis of the Commerce Department's new numbers for the
Washington Post, "in our era of high economic inequality, GDP
should definitely not be taken as a signal of broad well-being. For
that, we have to look at not just how 'the economy' is doing, but how
all the people in the economy are doing."
On
Twitter, Bernstein pointed
out that—even in the midst of steadily rising growth,
record-breaking corporate profits,
and lofty promises from Trump and GOP lawmakers—most workers
are not
seeing a noticable boost in their paychecks.
"Any
administration would tout a strong GDP report like today's, but if
it's not reaching workers' paychecks, which it isn't, then cease the
applause and get to work on policy to reconnect growth to much
more broadly-share prosperity," he said.
News
this week that the Republican Party is quickly moving ahead with
their "tax
cuts 2.0" plan—which would double-down on tax cuts for the
rich and corporations—seems to suggest that Trump and the GOP are
wholly uninterested in working to ensure that economic growth is
distributed equitably.
"The
new line from Republicans in Congress is that Americans are 'better
off' because of last year's tax cut, so we have to extend it,"
Morris Pearl, a former managing director at Blackrock and chair of
Patriotic Millionaires, said in a statement. "Well, some
Americans are better off—people like me who are wealthy enough to
not need work—but most Americans are still struggling."
While
GDP growth may not be a good measure of workers' well-being, it is a
good indication that the wealthiest Americans are seeing their
incomes climb, given that most of America's economic growth in recent
years—particularly after the
2008 Wall Street crash—has been hoarded by the top one percent.
In
an analysis of
recent economic trends on Thursday, New York Times columnist Thomas
Edsall highlighted the "continued failure of wages to advance,
despite job growth, while corporate profits shoot up to record
levels."
Edsall
then pointed to a striking chart,
which shows that the share of profits going to labor has declined
sharply since the early 2000s.
Far
from reversing this trend and boosting the incomes of workers—as
Trump claimed in
front of the White House on Friday—the GOP's $1.5 trillion tax cut
package has so far produced overall wage decline.
"While
wages have risen by 12.9 percent overall since 2006, wages adjusted
for inflation (so-called 'real wages') have actually fallen by 9.3
percent," notes Vox's
Emily Stewart. "And between the first and second quarters of
2018 — after the tax cuts were enacted—real wages fell by 1.8
percent."
>> The article above was written by Jake Johnson, and is reprinted from In These Times.
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