About Those (Not Quite so Great) Wage Increases


AP Photo/Jonathan J. Cooper

Construction workers build a new house in the Coffey Park neighborhood of Santa Rosa, California. 

As America goes to the polls, Republicans claim one talking point that isn’t racist as such: Wages are going up.

For the most part, of course, they don’t claim it. The vast majority of Republican candidates have fallen in behind Donald Trump in making their closing pitch an attack on immigrants. They’ve largely ignored the headline stories in last Saturday’s papers: that wages in October were 3.1 percent higher than they were in October 2017.

That increase is largely the result of the low unemployment rate, which remained at 3.7 percent. But that increase isn’t all that it’s cracked up to be: So if you’re in line at your polling place next to a prospective voter who effuses about that wage increase, you might suggest that this effusive prospective voter consider this: That 3.1 percent increase doesn’t take into effect the rise in the cost of living since last year.

Were it to do that, the wage increase—the actual wage increase—would shrink to below 1 percent. As The Washington Post’s Heather Long reported last week, when you factor in the increase in the cost of living over the past year, the 2.9 percent yearly wage increase measured in September shrank to 0.6 percent. That ain’t nuthin’, but neither does it signal the advent of a workers’ paradise. Particularly inasmuch as profits for the companies in the S&P 500 have increased by roughly 25 percent since last year.

If we assume a rate of inflation of 2 percent, which is roughly the rate at which inflation has been rising for the past year, the disparity between the wealthy and the rest of us becomes clearer. As the Economic Policy Institute’s Larry Mishel and Julia Wolfe recently documented, real wages for the bottom 90 percent increased by 1 percent in 2017, while those for the top 1 percent increased by 3.7 percent, and for the top 0.1 percent by 8 percent. This disparity is nothing new. In 1979 (the year before Ronald Reagan’s election, for those of you seeking causality), the bottom 90 percent earned 69.8 percent of all wages; in 2017, that figure had dropped to 60.9 percent. During that time, the share of wages going to the top 1 percent rose from 7.3 percent to 13.4 percent, and the share going to the top 0.1 percent rose from 1.6 percent to 5.2 percent.

If your voting line is fairly long, you should be able to convey all these numbers, thereby speeding the Democrats to victory.

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