According to the U.S. Department of Labor (DOL), American workers’ paychecks are worth less than they were a year ago.
Despite President Donald Trump boasting about how better off Americans are now, the truth is that for the first time in many years average Americans are losing ground. Economic growth has not meant more prosperity for the middle and working classes. Rising prices have erased U.S. workers’ meager wage gains.
The DOL reported Friday that the inflation rate of 2.9% outstripped a 2.7 percent increase in wages from July 2017 to July 2018.
The average U.S. “real wage,” a federal measure of pay that takes inflation into account, fell to $10.76 an hour last month, less than it was a year ago.
The lack of wage growth has puzzled experts who thought that employers would give big raises this year. But gains have been small, and have been overshadowed by rising prices.
Inflation is rising because of a jump in energy costs, primarily gasoline. A gallon of gas costs 50 cents more now than it did a year ago according to AAA.
Americans are also paying more for housing, health care and automobile insurance, the DOL reported Friday. Not only that, but more price increases may be on their way as the full impact of Trump’s tariffs is felt throughout the entire economy. Cheap imports may be a thing of the past unless the president stops his misguided trade war.
Inflation isn’t the only bad news either. Economists are now warning that economic growth might have peaked after an extended growth period of several years that started during the Obama presidency.
A combination of rising prices and wages that are not increasing enough to keep pace is a political problem for the party in power.
Trump campaigned on promises of more high-paying jobs in old industries like steel and coal. He promised raises for middle class Americans he labelled “the forgotten men and women of our country.”
Unfortunately for those who believed his promises and voted for him, Trump will not be able to deliver the higher paying jobs. In fact many of his policies may cause layoffs and cost American jobs.
In Trump’s economy most benefits have gone to stock market investors and corporations. The stock market hit record highs this year in January. Corporations have seen profits soar after the Republicans’ trillion-dollar tax giveaway to them which has not delivered for workers and is seen as a short-term stimulus.
Workers as a whole are getting a smaller share of the gains than they did the past. Many workers are wondering why their pay isn’t higher at a time when so much in the economy seems to be going well.
“I’m just a regular Joe, but I see that Fortune 500 companies are raking it in and the stock market is at an all-time high. Pay should be going up, too,” said Morris Tate, who works for a logistics company in North Carolina.
Some experts say that the cost of health care has gone up so much that it is depressing wages and holding down hourly pay.
The DOL also said that Americans are working more hours now which is helping to keep many families afloat, and others have taken on a second job.
Penny Harford, a 67-year-old in Filer, Idaho, is working two part-time jobs at retail stores just to make ends meet. She added hours last year when energy prices started to go up and she came to the conclusion that she needs to work more hours just to pay her bills.
“I was talking with my co-workers yesterday,” she said. “We’re all desperate for more hours because we can’t make it.
In Trump’s economy, the rich get richer, and middle class Americans are now finding out that despite the president’s promises they are losing ground.
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