“It’s an economic miracle,” the president raved at last month’s State of the Union address. “In just over two years since the election, we have launched an unprecedented economic boom, a boom that has rarely been seen before. There has been nothing like it.”
Yep, take a look at any graph showing GDP and job growth and you’ll see two very nice upward slopes. But not for the past two years, for the past 20. And, yes, it’s true that wages are rising faster than they have in a decade but that’s primarily because the US economy was in freefall ten years ago. To compare 2019 wage growth to a 2009 standard is disingenuous at best. And when you factor in a 1.5 percent inflation rate, workers’ wages only grew about 1.7 percent in the past year. While everything that really matters is costing more and more. Feeling the miracle yet?
The only miracle here is how the sketchily-rich and dubiously-powerful have managed yet again to foist off another tax cut that almost solely aggrandizes them while leaving the American worker holding a trillion dollar IOU.
According to Axios.com, productivity (the ratio of goods and services created for a standard unit of work) is not the problem. “The issue driving income inequality in the U.S. has not been a lack of productivity by American workers, a new report from the Economic Policy Institute (EPI) finds. Instead it is that the lion’s share of gains from increased productivity have gone to a tiny segment of wage earners at the top.”
It’s easy to see what’s going on. From 1979 to 2017 US worker productivity grew over 70% while hourly compensation of grew at barely 10%. Yes, your math is right. For the non-fatcat worker, productivity grew nearly seven times faster than what bosses and owners deigned to pay the people who made them the cushy piles of dough they’re sitting on.
Cast your memory back to November 2017 when the president assured Americans that slashing taxes on corporations and private businesses would provide the “rocket fuel our economy needs to soar higher than ever before.” “And when Trump signed the tax bill on December 22, 2017 in the Oval Office,” writes Alexia Fernández Campbell at Vox.com, “he also promised that businesses would invest those tax savings in their businesses and give ‘billions and billions of dollars away to their workers.’ He pointed to a handful of big companies that promised to raise wages and give employees $1,000 cash bonuses — among them Walmart, Bank of America, and Comcast. More than a year later, economic data shows that the tax bill’s benefit to workers never materialized.”
“This how they’re doing it,” Axios continues. “Companies already were able to chip away at their effective tax rate when the top rate was 35%. The new rate of 21% approved under the Trump-backed legislation got them much lower.” Then all the loopholes — virtually none of which were eliminated by the tax bill, as promised — kick in like sugar on lollypop.
According to the Institute on Taxation and Economic Policy:
GM is claiming a $104 million refund on $11.8 billion in 2018 profit.
Goodyear is seeking a $15 million refund on $693 million in profit.
Halliburton will pay $19 million in U.S. income taxes on $1.6 billion.
Netflix filed for a $22.1 million refund on $845 million.
U.S. Steel is claiming a $303 million refund on $957 million.
And Amazon is seeking a $129 million refund on $11.2 billion.
It’s not that these companies are breaking the law; they’re adhering fastidiously to the laws they and entities like them lobbied to have written.
There was a time when worker productivity and wages were tied together like pedals on a bicycle. One pushed the other; both benefited equally. Business owners and shareholders acquitted themselves with a modicum of fairness, the nerves controlling pangs of conscience not yet having been desensitized. Then came the 1980s “greed is good” mentality the nation and much of the world is suffering at present.
So, at what point do Americans — the right especially — finally clue-in to what is going on and say enough is enough? When future ratios of worker productivity to wages earned are not 7-to-1, but 15-to-1? 25-to-1? 50-to-1?
You almost can’t blame them. Corporations are like sharks and we’re the chum. Like scorpions, crossing the river on our backs. They’ll go right ahead and keep right on doing what they’re doing.
Until we make them stop.
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Multiple award-winning author Charles Caratti (Carr) writes and edits for many well-known publications. Also a noted playwright and director, Caratti’s works have been performed at premiere venues across SoCal. Contact him at charlescarr.com.