President Donald Trump heads into a midterm referendum on his presidency showing no real progress on a core promise: to raise the wages of America’s “forgotten man and woman.”
Once the impact of inflation is included, ordinary Americans’ hourly earnings are lower than they were a year ago.
Real wages have remained mostly stagnant despite an expanding economy, record stock prices, soaring corporate profits and a giant deficit-fueled stimulus from Trump’s tax cuts that took effect Jan. 1. The Trump administration claimed its policies would immediately boost wages, with its tax overhaul ultimately increasing average pay by $4,000 to $9,000.
That hasn’t happened. And though Trump regularly boasts of the economy’s performance, many Americans don’t feel they’re sharing in the gains -- a risk for Republicans as they seek to defend their House and Senate majorities in November elections.
A majority of voters believes their personal financial situation has remained the same or gotten worse over the past two years, said Tim Malloy, assistant director of the Quinnipiac University poll.
“When you look at that backbone of the country -- the middle class -- people think that there’s stagnancy and not much has happened for them,” although “things might be marginally better nationwide,” he said. “That could be a problem in the midterms for a lot of people. At least some people believe that promises were not fulfilled.”
Inflation-adjusted hourly wages dropped 0.2 percent in July from a year earlier, their worst reading since 2012, according to the Labor Department, amid faster price gains. They’ve grown at an average 0.3 percent annual pace under Trump, compared with 1.1 percent during Barack Obama’s second term. Trump’s escalating tariff disputes risk eroding buying power further by driving up prices.
At the same time, many Americans received a boost in take-home pay from the tax cuts, though some ended up paying more in taxes. About 65 percent of taxpayers will receive a tax cut in 2018, averaging $2,200 from the new law’s individual provisions, while 6 percent will receive an increase of about $2,800, according to estimates from the Tax Policy Center in March.
As a candidate, Trump excoriated his predecessor for slow growth in American workers’ incomes.
“Household incomes are over $4,000 less today than they were 16 years ago,” he said during a campaign rally in Pensacola, Florida, in September 2016. “We’ll get your salaries and your wages up, up, up.”