White House challenges wage stagnation

Countering reports from his Bureau of Labor Statistics that typical worker wages have declined since the adoption of the December tax break, the White House Trump said that wages actually went up by 1, 4 percent.

In a new report from its Council of Economic Advisers, the White House claimed that official wage statistics were wrong because they did not include bonuses and benefits, and because they exaggerated, between other factors, inflation.

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"Ignoring premiums and other benefits is particularly misleading in the past year," says the report, "when more than 6 million workers benefited from tax cuts

"This is by no means a criticism of the BLS," said CEA President Kevin Hassett at a press conference.

But the report was clearly intended to neutralize BLS statistics that contradict the administration's predictions that lowering taxes, H.R. 1 (115), would stimulate paychecks.

According to BLS, earnings on full-time median weekly earnings were lower than inflation during the first six months of 2018, compared to the previous year and the last three months of 2017.

Last month, BLS reported that average hourly earnings, which is higher but less representative than the median, was up 2.7% from the previous year. BLS will release a report for August Friday.

On Labor Day weekend, on Fox News, AFL-CIO President Richard Trumka exasperated President Donald Trump by stating, among other things: "Wages have gone down since the beginning of the year. " In one Twitter respondsThe President said, "Some of the things that he said were against the workers of our country and the success of the United States themselves, that it's easy to see why the unions are doing so badly. "

Hassett, the CEA, has always made particularly optimistic economic statements. In 1999, he co-authored a book titled "Dow 36,000" on the eve of the dot-com bust. Nearly two decades later, the Dow has never exceeded 26,616.71.

In February, Hassett's CEA predicted that the tax cut would raise salaries by $ 4,000. Wednesday, during the press call, Hassett said he expected this prediction to materialize after four years. "These effects on full wages depend on capital formation, which will take three to four years," he explained.

Harry Holzer, economist in Georgetown, who was chief economist at the Ministry of Labor under President Bill Clinton, agreed with Hassett in an e-mail to say there are significant measurement problems But Holzer said that They "cut in both directions" and that "the CEA presents an image much more rosy and unilateral than the truth".

Holzer said that CEA's inclusion of health benefits in its calculations was problematic as their increasing value "reflects the rising costs of health care in a distorted market and should not necessarily be considered the best way to save money." equivalent of the income of the workers. " He also said that "premiums are one-time events and do not permanently increase profits".

Holzer also stated that Hassett's calculations do not take into account "a huge inequality in tax cuts and earnings gains – so that the median (or intermediate) worker benefits far less than the average (or the average)".