“You Can’t Eat GDP”: Workers Struggle as Trump and Corporate Media Tout Growth

“If it’s not reaching workers’ paychecks, which it isn’t, then cease the applause.”

Jake Johnson, Common Dreams

As Pres­i­dent Don­ald Trump and cor­po­rate media out­lets on Fri­day enthu­si­as­ti­cal­ly tout­ed new GDP fig­ures show­ing that the U.S. econ­o­my grew by 4.1 per­cent in the sec­ond quar­ter of 2018, many econ­o­mists and pro­gres­sive com­men­ta­tors were quick to counter the glow­ing head­lines by point­ing out that cor­po­ra­tions and the rich are feast­ing on most of the growth while most work­ers see their wages fall.

"You can't eat GDP. GDP doesn't pay the bills." —Dante Atkins"

What the pres­i­dent won’t talk about is that there is slow — and even neg­a­tive — growth in real wages adjust­ed for infla­tion. So if GDP is ris­ing, but wages [are] falling, the mon­ey is going to the top,” Tim­o­thy McBride, a health econ­o­mist at Wash­ing­ton Uni­ver­si­ty in St. Louis, not­ed in response to Trump’s cel­e­bra­to­ry speech on the White House lawn on Friday.

You can’t eat GDP,” writer Dante Atkins added on Twit­ter. GDP does­n’t pay the bills.”

As Jared Bern­stein, senior fel­low at the Cen­ter on Bud­get and Pol­i­cy Pri­or­i­ties, observed in an analy­sis of the Com­merce Depart­men­t’s new num­bers for the Wash­ing­ton Post, in our era of high eco­nom­ic inequal­i­ty, GDP should def­i­nite­ly not be tak­en as a sig­nal of broad well-being. For that, we have to look at not just how the econ­o­my’ is doing, but how all the peo­ple in the econ­o­my are doing.”

On Twit­ter, Bern­stein point­ed out that — even in the midst of steadi­ly ris­ing growth, record-break­ing cor­po­rate prof­its, and lofty promis­es from Trump and GOP law­mak­ers — most work­ers are not see­ing a not­i­ca­ble boost in their paychecks.

Any admin­is­tra­tion would tout a strong GDP report like today’s, but if it’s not reach­ing work­ers’ pay­checks, which it isn’t, then cease the applause and get to work on pol­i­cy to recon­nect growth to much more broad­ly-share pros­per­i­ty,” he said.

Any admin­is­tra­tion would tout a strong GDP report like today’s, but if it’s not reach­ing work­ers’ pay­checks, which it isn’t, then cease the applause.”
—Jared Bern­stein, Cen­ter on Bud­get and Pol­i­cy Pri­or­i­ties­News this week that the Repub­li­can Par­ty is quick­ly mov­ing ahead with their tax cuts 2.0” plan — which would dou­ble-down on tax cuts for the rich and cor­po­ra­tions — seems to sug­gest that Trump and the GOP are whol­ly unin­ter­est­ed in work­ing to ensure that eco­nom­ic growth is dis­trib­uted equitably.

The new line from Repub­li­cans in Con­gress is that Amer­i­cans are bet­ter off’ because of last year’s tax cut, so we have to extend it,” Mor­ris Pearl, a for­mer man­ag­ing direc­tor at Black­rock and chair of Patri­ot­ic Mil­lion­aires, said in a state­ment. Well, some Amer­i­cans are bet­ter off — peo­ple like me who are wealthy enough to not need work — but most Amer­i­cans are still struggling.”

While GDP growth may not be a good mea­sure of work­ers’ well-being, it is a good indi­ca­tion that the wealth­i­est Amer­i­cans are see­ing their incomes climb, giv­en that most of Amer­i­ca’s eco­nom­ic growth in recent years — par­tic­u­lar­ly after the 2008 Wall Street crash — has been hoard­ed by the top one percent.

In an analy­sis of recent eco­nom­ic trends on Thurs­day, New York Times colum­nist Thomas Edsall high­light­ed the con­tin­ued fail­ure of wages to advance, despite job growth, while cor­po­rate prof­its shoot up to record levels.”

Edsall then point­ed to a strik­ing chart, which shows that the share of prof­its going to labor has declined sharply since the ear­ly 2000s:

Far from revers­ing this trend and boost­ing the incomes of work­ers — as Trump claimed in front of the White House on Fri­day — the GOP’s $1.5 tril­lion tax cut pack­age has so far pro­duced over­all wage decline.

While wages have risen by 12.9 per­cent over­all since 2006, wages adjust­ed for infla­tion (so-called real wages’) have actu­al­ly fall­en by 9.3 per­cent,” notes Vox’s Emi­ly Stew­art. And between the first and sec­ond quar­ters of 2018 — after the tax cuts were enact­ed — real wages fell by 1.8 percent.”

Subscribe and Save 66%

Less than $1.67 an issue