“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 July 27, 2018

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.”

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