Trickle-down economics don’t actually benefit the average worker. Surprise!
Republicans heralded their Tax Cuts and Jobs Act of 2017 as a boon to the typical American worker’s wages and/or bonuses. Companies released press statements shortly after the bill passed, declaring that they were able to dish out bonuses thanks to the tax cuts, a number of which were actually already going to happen before the legislation was enacted. Like most GOP fiscal policy, the TCJA was truly designed to benefit corporations, while superficial claims of financial gain for the middle class are easily refuted when you take a closer look at the numbers.
Lawrence Mishel of the Economic Policy Institute writes that the average worker actually received a bonus of a whole dang penny between December 2017 and December 2018, according to data from the Bureau of Labor Statistics’ Employer Costs for Employee Compensation. “The new data show that bonuses actually fell $0.22 between December 2017 and December 2018, and the average bonus for 2018 was just $0.01 higher than in 2017,” Mishel explains.
He adds, “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.” Indeed, bonuses have become more popular in the last four years because, in the long term, they are cheaper than actual raises but provide the once-off morale-boost to keep workers placated. It’s the financial equivalent of handing someone a Flintstones band-aid when they really need a tourniquet and a whole roll of gauze.