Why Manufacturing Workers Have Seen Their Wages Fall Under Trump

Paul Ryan and Donald Trump

Paul Ryan and Donald Trump | Mark Wilson/Getty Images

You don’t need to follow Paul Ryan on Twitter to know how badly the House Speaker (R-Wisconsin) wanted to pass the GOP tax plan. While trying to sell the legislation to Americans, Ryan released this bold statement:

With more jobs, higher wages, and a stronger economy, American workers and families would be the greatest beneficiaries of this reform.

Yet the tax cuts did not play out that way. Right away, huge corporations began laying off workers. Afterward, the same companies started a run of unprecedented stock buybacks topping $200 billion.

In June 2018, maybe the worst news of all came directly from the Trump administration’s Labor Department. Between May 2017 and May 2018, workers in manufacturing and construction jobs saw their wages decrease.

Here’s why paychecks are falling even though Trump and other officials say the economy is stronger than ever.

Wage increases are slower than inflation.

Since the GOP tax plan favors the wealthiest Americans and corporations, it would actually take getting a raise for the average worker to see more money on a weekly basis. Despite the tweeting and boasting from Trump early in 2018, those bonuses and raises were few and far between. (Compared to stock buybacks, they were nonexistent.)

So workers who’ve waited for a boost from the tax cuts never got it. Meanwhile, their bosses weren’t offering raises, as the data showed.

According to a Washington Post Wonkblog, that decline in wages can be attributed to regular inflation (2.9% over that period). In 2018, growing expenses (especially higher oil prices) outpaced any actual pay bump (2.8%). So the massive amount of American construction and manufacturing workers are actually worse off under Trump.

A worker builds an engine for a 2012 Ford Focus on the assembly line at the Ford Motor Co.'s Michigan Assembly Plant December 14, 2011 in Wayne, Michigan.

A worker builds an engine for a 2012 Ford Focus on the assembly line at the Ford Motor Co.’s Michigan Assembly Plant December 14, 2011 in Wayne, Michigan. | Bill Pugliano/Getty Images

80% of workers felt the sting of less spending money.

While jobs like coal mining make up a tiny portion of the labor force, the labor pool that falls under the category of “production and nonsupervisory employees” is massive. According to Wonkblog, it not only includes construction and auto manufacturing; it also includes fast food workers and the health care industry.

Overall, the group that saw real wages fall makes up 80% of the U.S. private labor force (over 115 million employees).

When matched up against scientific polling by CNBC and a red-state survey reported here in The Cheat Sheet, the results come out the same: Most workers are in exactly the same economic position they were in before the GOP tax plan took effect.

Who’s actually seeing the money

Clearly, those who own large piece of U.S. corporations (including foreign investors) got the most out of the tax cuts, and those people are seeing the sort of wealth usually reserved for the upper class in Third World countries.

Economists will phrase it in more clinical terms. “The extra growth we are seeing in the economy is going somewhere: to capital owners and people at the top of the income distribution,” said Heidi Shierholz, a former chief economist a the U.S. Labor Dept., in an interview with Wonkblog.

If you’re at the top, you’re doing much better in 2018; if you’re among the 115 million Americans in a nonsupervisory position, you’re worse off than you were in 2017.

That doesn’t sound like the tax plan Donald Trump, Paul Ryan, and Mitch McConnell sold America.

Follow The Cheat Sheet on Facebook!