One of the major selling points of the 2017 Republican Tax Cut was that it would boost wages for ordinary Americans – the people whose votes elect Trump – and who had seen a thirty year trend of near stagnant wages.
Immediately after the tax bill passed a few companies announced tax-cut based bonuses for their workers, which led to a lot of publicity about how the tax cut was working for all Americans. But this was only a few companies, and now the data is in for the workforce as a whole. Overall, bonuses are down approximately 22% across the board, this despite record profits, record low tax for corporations, record stock prices and massive stock buybacks.
Separate data show that the tax bill did not lead to the promised increase in investment (which would have led to more jobs) or to any meaningful increases in wages. In other words, typical Trump voters (as well as typical Clinton voters) got nothing in the aggregate. Big campaign donors did rather well off these cuts – which were stimulated when a group of Republican big-time donors started to threaten to cut their contributions if Congress didn’t give them something after the failure of the Republican effort to repeal the Affordable Care Act.
So what should be done? Why are wages stagnant (except for the wealthiest pockets of the economy. Its all well and good to rail against “socialism” but if capitalism isn’t delivering the goods, is it surprising that people – in particular young people – are tempted to explore alternatives?
If wages for average Americans were going up that would be a huge boost to President Trump’s reelection chances. What should he do to capitalize on that opportunity if anything?