Monday, March 6, 2017

Can Trump Make Wages Great Again?

Using average wage growth data from the Social Security Administration since 1973, I put together these statistics on wages for primarily eight-year Presidential terms:
Now,  the purpose here is not to disparage any particular President, but to show that all the successive terms of presidents since 1973 have seen a decline in wage growth.  Also understand, that wage growth (or the lack thereof) is a complex issue based on several factors that may or may not be controlled by Presidential actions:
      • Quantity and quality of job availability
      • Quality of the labor force in terms of education, experience, and skills
      • Amount and quality of jobs outsourced overseas
      • Government Regulation forcing companies to use outside, contract labor
From my perspective, all of these factors have contributed to slow wage growth over the years.  Most recently, ObamaCare has contributed to the problem because, when a company is forced to provide health insurance to its employees at a cost of no more than 9.5% of their incomes, the funding for that insurance by the employer depletes the available funds for wage increases.  For many workers, ObamaCare is their raise.  Also, companies are avoiding the high cost of providing health insurance by converting jobs to contract labor.  Labor, who then must buy their own insurance in compliance with the law.  This law has also produced high levels of part time labor.

But one of the biggest problems in wage advancement is a workforce that continues to be less educated. Today's best jobs are in high tech.  Yet America's students lag in the areas of math and science and those are the prerequisite for the college programs, that will ultimately fill those high tech jobs.  Without a quality workforce, employers are forced to look outside the United States for the kind of labor we need.

So, this brings us to President Trump.

Can he, as the title of the blog asks, make wages great again?  The answer is probably not.   He may keep some quality jobs from leaving our shores.  He may also reduce regulations and their negative impact on business and wage growth.  But, his biggest obstacle, will be the creation of a quality work force that meshes together with higher quality jobs.  To me, this is a nearly impossible task with the current structure of education in the country.  Simply speaking, Obama's own Education Department announced last fall that 60% of high school seniors were not prepared for either college, or worse yet, a career.  To use one of Trump's favorite expressions: "Sad!'.


1984 to 2015 Average Wage Data:

1973 to 1983 Average Wage Data:

Behind shrinking middle-class jobs: A surge in outsourcing:

Temp staffing jobs hit record as firms dodge ObamaCare costs:

People Joining The U.S. Workforce Today Are Less Educated Than Those Leaving It:

The American Middle Class Is Losing Ground:


Most High School Seniors Aren't College Or Career Ready, Says 'Nation's Report Card':

Study: Employers Hiring Freelancers To Avoid Obamacare:

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