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Thursday, December 21, 2017

If The Trump Economy Is Doing So Well, Who Needs Corporate Tax Cuts?

Workers Need Higher Wages, Not a Huge Giveaway to Their Employers

Image result for trump tax cuts“Jobs Trump Expectations,” the Drudge Report signaled in its midday headlines on December 8, reporting the monthly addition of 228,000 nationally. The wordplay evidenced some glee for the president and was a continuing reflection of a generally strong economy.

The CNBC story referenced did laud the rise of consumer confidence and business trends behind the numbers, and did note that economists had predicted addition of 200,000 jobs, so the results were positive. The unemployment rate remained at 4.1%.

Of course, the story also said that the November figures just slightly higher than expected, with few surprises for an expansion in the economy that has run unstopped monthly since mid-2009. And there is that little worry about inflation that the Federal Reserve raises.

But, hey, if Trump wants to take credit for the last 12 months, be my guest.

In fact, monthly job growth this year lags a bit with job growth last year, the year preceding the Trump Experience.

For me, I’d expect more —a lot more—from a Trump administration that has turned the economic front upside down in a highly publicized attempt to boost national economic productivity, job creation and promised new prosperity for Trump loyalists.

Those kind of results are difficult to see in these monthly, post-hurricane figures, so, as is my wont, I went to the Bureau of Labor statistics to take a look. There, you can get the kind of information that the pro-Trump headline is glossing over.

The most important findings were that even with growth, the number of unemployed remained unchanged at 6.6 million; over the last year, the number of unemployed has lessened by 799,000. And wage growth remains stuck at 2.5% as it has for months or longer.

So, statistically, more people are working but at stagnant wage growth. A tax bill even with a $2,000 maximum household break will not change that.

According to the bureau, which surveys households, jobless rates for adult men and women and  for blacks and Latinos, remained statistically even. The unemployment rate improved for teenagers. Long-term unemployment remained the same as well. Indeed, the number of employed people per population has shown little movement all year.

The number of part-time workers who preferred full-time hours actually was down.  The bureau said that among the 228,000 new jobs, manufacturing added 31,000.

Employment rose in machinery by 8,000, fabricated metal products by 7,000, computer and electronic products by 4,000 and plastics and rubber products by 4,000.

Since a recent low in November 2016, manufacturing employment has increased by 189,000. 

Other increases were noted in professional and business services and in healthcare, which added 30,000 jobs. Most were in ambulatory healthcare services (+25,000), which includes offices of physicians and outpatient care centers.

Among other industries, construction jobs were up, but mining, wholesale trade, retail trade, transportation and warehousing, information, financial activities, leisure and hospitality and government, changed little. Buoyed by seasonal hires, retail added 18,000.

OK, a lot of numbers. I’m sure that Trump would highlight the manufacturing additions. But a question: If we are at the height of consumer confidence, on the verge of a huge corporate tax cut and in a regulatory environment that corporations should see as lovely, is the addition of 31,000 American jobs nationwide a big number? I don’t think so.

Indeed, it raises the question of why this economy is so in need of a boost that we need the tax bill.

More to the point, it is this insistence on jobs, jobs, jobs that has motivated the discussion that the tax bill promotes re-investment of even bigger profits. But companies are plenty profitable now. The job figures indicate is that there is modest job growth, in accordance with the same pattern that marked the eight years of Obama. They should be focusing on an increase in wages.

Federal Reserve policymakers apparently find the lack of wage growth to be significant in deciding whether further increases in the benchmark interest rates are justified. So, of course, do workers.

Maybe people should worry less about handing out credit and spend more time understanding what bigger problem they should be targeting.

Terry H. Schwadron is a former editor for The New York Times, The Los Angeles Times and The Providence Journal and is an active volunteer with immigrants and writers and plays trombone in New York City. He blogs here.