Wages for American workers are finally rising at a faster pace and the trend is likely to continue, says Bloomberg’s Barry Ritholtz. Several factors are contributing to the faster pace of wage growth, including minimum wage hikes in 18 states and 22 cities in 2018 and a tighter job market, which is forcing employers to pay more.
One factor Ritholtz doesn’t credit with contributing to the wage growth is the 2017 tax bill – and he rejects the tax-cuts-will-raise-wages thesis in no uncertain terms:
“[L]et me beat any unreformed supply-siders to the punch on one final topic: There is little or no evidence that the Tax Cuts and Jobs Act of 2017had much of an impact on wages — and certainly workers haven’t seen the absurd $4,000 per employee windfall President Donald Trump’s economic advisers and political allies made before the tax cut was passed by Congress. As my Bloomberg Opinion colleague Noah Smith observed, there are no signs that tax cuts are trickling down to workers’ real wages. This isn’t a surprise, since the tax cut was geared to give companies and the wealthy the most of the breaks.”