Dave Chrisman’s “Just my opinion” (WHT – Jan. 2) asserts that critics of Trump are hell-bent on his removal from office and ignore the glorious record of his accomplishments – “Unemployment is at record lows. Real wages are up. The stock market is at record levels. We are energy independent. We are creating trade deals that put America first. By nearly any metric, American and Americans are better off under this president.”
Let’s talk facts Mr. Chrisman. On the face of it, these should be heady times for American workers. U.S. unemployment is as low as it’s been in nearly two decades (3.9% as of July) and the nation’s private-sector employers have been adding jobs for 101 straight months – 19.5 million since the Great Recession — related cuts finally abated in early 2010, and 1.5 million just since the beginning of the year.
But despite the strong labor market, wage growth has lagged economists’ expectations. In fact, despite some ups and downs over the past several decades, today’s real average wage (that is, the wage after accounting for inflation) has about the same purchasing power it did 40 years ago. And what wage gains there have been have mostly flowed to the highest-paid tier of workers. (Pew Research Center; Bureau of Labor Statistics.)
The S&P’s 28.6% growth during Trump’s third year lagged behind former President Barack Obama’s 32% during his third year of his first term, which came as the economy recovered from the financial crisis.
But who really are invested in the stock mark? Despite the fact that almost half of all households own stock shares either directly or indirectly through mutual funds, trusts, or various pension accounts, the richest 10 percent of households control 84 percent of the total value of these stocks in 2016. (Professor Edward N. Wolff, New York University).
Energy production was unleashed during Obama’s presidency, largely because of advances in hydraulic fracturing that made it economical to tap vast reserves of natural gas. Oil production also greatly increased, reducing imports. Before the presidential election in 2016, the U.S. for the first time in decades was getting more energy domestically than it imported.
According to a Federal Reserve study, Trump’s tariffs that went into effect in 2018 have led to not only higher producer prices but also a loss of jobs across the U.S. — particularly in manufacturing. A previous analysis also found that tariffs have cost the U.S. $42 billion so far.
“In terms of manufacturing employment, rising input costs and retaliatory tariffs each contribute to the negative relationship, and the contribution from these channels more than offsets a small positive effect from import protection,” the new Fed study stated. “For producer prices, the relative increases associated with tariffs are due solely to the rising input cost channel. We find little evidence for a relationship between industrial production and any of the three tariff channels considered.”
The Institute for Taxation and Economic Policy’s report on the final version of the Trump-GOP tax bill estimates the average tax breaks for taxpayers in each income group. Focusing on the middle fifth of the income distribution — the literal middle-class – income for these taxpayers ranges from about $42,000 to $67,000. The report estimates that the average tax break for the middle 20 percent of taxpayers will be $800 in 2018.
But let’s look at what happens for the richest 1% of taxpayers. Whereas the total average tax break for the middle 20 percent will be $800, the total average tax break for the richest 1% will be $55,190. And, whereas the middle fifth of taxpayers will get just 8% of the tax cuts next year, the richest 1% will receive more than 25% of the tax cuts.
Edward H. Schulman is a resident of Kailua-Kona.