Last year’s Tax Cuts and Jobs Act was sold by President Donald Trump and Republicans as a law that would put more money into the pockets of the average American, but an analysis of recent data from the Bureau of Labor Statistics’ Employer Costs for Employee Compensation by the Economic Policy Institute found that the law has resulted in “very little increase in private sector compensation or W-2 wages since the end of 2017.”
The report notes:
An examination of overall wage and compensation growth does not provide much in the way of bragging rights for tax cutters, especially given the expectation of rising wages and compensation amidst low unemployment.
The $0.02 increase in inflation-adjusted bonuses per hour over the last three quarters came as W-2 wages (defined as direct wages plus wages for paid leave and supplementary pay) actually fell $0.07, a 0.3 percent decline.
The White House contention that corporate tax cut-inspired widespread provision of bonuses that led to greater paychecks through bonuses or wage increases for workers is not supported by the BLS Employer Costs for Employee Compensation data. This is not surprising. Press releases—“a flurry of corporate announcements”—by a small group of administration-supporting firms do not create widespread bonuses or wage growth for workers. Neither do tax cuts, at least within the first nine months.