Wage Growth for Low Income Workers Doubles Wage Growth for High Income Workers…

An interesting article within The Atlantic draws attention to one of the more intended consequences of Maganomics: wages for the middle-class Americans are rising twice as fast as wages for high-income earners.

(Source)

Yes, President Trump is closing the wealth gap.

This dynamic is directly attached to President Trump’s MAGAnomic policy that focuses wage and income benefit directly to Main Street, “production economy”; and reverses the process that was driving benefit to U.S. multinationals on Wall Street, the “service-driven” economy.   As noted in The Atlantic:

[…]  According to analysis by Nick Bunker, an economist with the jobs site Indeed, wage growth is currently strongest for workers in low-wage industries, such as clothing stores, supermarkets, amusement parks, and casinos. And earnings are growing most slowly in higher-wage industries, such as medical labs, law firms, and broadcasting and telecom companies. (more)

While there are not technically going to be direct losers in a Main Street economy, there will undoubtedly be some amid the investment class who will be lesser-winners.

The reasoning is really quite simple.  There are many people attached to the Wall Street economy who ran-up wealth via the process of de-industrialization of America.

Anyone who gained income through the process of multinational export of investment and jobs, specifically U.S. based multinationals, are naturally going to see negative impact as the reverse takes place.

Multinational investment assets held overseas are precariously positioned, as the Trump’s ‘America-First’ trade policy starts to get teeth.  Any U.S. corporation who attempts to fight against the tariff process will find themselves expending a large amount of money while simultaneously losing the ‘price’ advantage;…. And they will be simultaneously positioned to lose market share to U.S-based, or North American-based, competition.

This is why the USMCA becomes important.  Once the USMCA is ratified it gives U.S. multinationals a definitive long-term position, from which they can calculate their costs.

A tenuous supply chain/manufacturing position in China or Asia, with unknown short-term risks to rising production costs, can be reconciled against a North American supply chain and/or manufacturing position that is well defined and predictable.

It is within this policy dynamic where the ultimate MAGAnomic winners and losers will be found.   Right now the multinationals are trying to keep prior Asia investments viable; however, the clock is ticking.   Those unknown variables have a cost.

The first loss is the best loss“… and right now President Trump is pressuring U.S. corporations to consider this truism carefully.

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This entry was posted in Big Government, Donald Trump, Economy, Election 2020, energy, Legislation, NAFTA, Nancy Pelosi, President Trump, Trade Deal, Uncategorized, US dept of agriculture, US Treasury, USA, USMCA. Bookmark the permalink.

82 Responses to Wage Growth for Low Income Workers Doubles Wage Growth for High Income Workers…

  1. JoeMeek says:

    If this had happened under Obama, he would have been awarded the Noble Prize for economics and justice. And he would be on Mt Rushmore. And his birthday would be a national holiday.

    Liked by 10 people

  2. chojun says:

    Hopefully this contributes to the breaking of the stranglehold that our universities have on skilled worker training.

    When people generally begin to understand that high wages can be earned with a little technical training versus a lot of very expensive high education, there will be a flood of engineers, mechanics, machinists, etc. into the job market.

    Liked by 11 people

    • Lulu says:

      I don’t think so. Most suburban parents care more about their child’s job title and that they at minimum have a Bachelors degree than they do income. It’s true. I believe the majority of suburban parents would be embarrassed if their child was working class.

      Liked by 1 person

      • bluenova1971 says:

        Lulu, sadly I agree.

        My father was a non-union truck driver but always made a decent living. My mom had worked for a national insurance company almost her entire adult life. We weren’t wealthy, just solidly “middle” middle class. Very few in my family were college grads, the main exception being my paternal grandmother, a school teacher who had completed an MA.Ed.

        From my earliest recollection, she had always said “WHEN you go to to college”… not “IF you go to college”, and instilled in me that it was expected. My parents – wanting what was best for their only child – were also very supportive of the idea.

        I graduated a major southern university Dec. 10, 1975, and upon graduating immediately bought a semi rig and began hauling produce coast to coast. While some of my more well-to-do classmates hitch-hiked or drove their new cars across the land to “see the country”, I was seeing the country and making a pile of money.

        My dad was very disappointed in my career direction: “I wanted you to do better than me”, he said. (I actually was doing much better than him – he had always worked for someone else – but didn’t want to rub it in)

        This went on for a little over a year. Finally, having heard it enough, I showed him my tax return for the first year. I had grossed over 100k and netted 45k (not chump change in those days). He had made about 20k that year. Always one who loved a dollar, I saw his eyes widen as he saw the figures, and he never brought it up again.

        Over the years since then, I haven’t really used the degree in my field of study, but just having it helped me get good jobs when I started a family and wanted to get off the road, so it helped me in that regard. But several of my HS classmates entered apprenticeships in the “trades”, made very good money, made wise choices with their finances, and are now sitting pretty without a college degree.

        I’ve since owned several businesses (some very successful, some not so much), and when times got tough, I was always able to fall back on my experience as a driver for jobs to pull us through.

        My wife and I have put our six kids through college, relating my own experiences, and encouraging them to get their degrees.

        I told them all “Do what you love and you’ll never work a day in your life”.

        They’re all doing well

        Like

      • chojun says:

        I understand what you’re saying and generally agree that this is the ‘current’ situation but I think after a generation or so – maybe sooner – the perception will change.

        This is what I hope. Our Universities generally aren’t turning out highly-skilled workers with valuable, marketable degrees. What’s worse is that they’re doing this while saddling them with debt they can’t repay in a reasonable timeframe.

        Like

        • Gary Thomson says:

          Question: Do you know what is the most important thing the universities teach in those awful “gender, womyn’s, black, people of color, trans – fill in the blank – “studies programs”?

          Answer: “Would you like fries with your order?”

          The reason the lefties are so keen on increasing the minimum wage is, that’s the only way the people with those expensive worthless degrees will have even a chance of paying off their college loans and the left is all about protecting the universities and colleges. That is where they recruit their stormtroopers.

          Like

  3. JoeMeek says:

    If this had happened under Obama, he would have been awarded the Noble Prize for economics and justice. He would be on Mt Rushmore and his birthday would be a national holiday.

    Liked by 3 people

  4. Pointman says:

    Your line of reasoning is self-evidently true. Wall Street thinks top down, never caring there’s only so much of an economy you can export before it’s a dessicated corpse. Trump’s bottom up approach grows not only the economy, but also wages, and it spreads upwards.

    “Despite what he’d been given to understand, it wasn’t globalisation that destroyed his livelihood and reduced the manufacturing heart of America to something referred to dismissively as the rust belt, but the totally foreseeable end result of decades of disastrous international trade agreements that had the effect of tearing down American factories that were then immediately rebuilt in foreign countries, while American workers moved onto a lifetime of welfare support and food stamps. The goods they’d formerly made were now manufactured abroad and imported back into America for sale.

    That whole process of the industrial destruction of the American manufacturing base juddered to a complete stop within 24 hours of Trump’s inauguration. He did two things immediately. The first was he reminded manufacturers of his campaign promise. They were free to shutter factories in America and produce their goods cheaper offshore. However, he was equally free to slap on punitive import tariffs of their goods as they came into America, which he left them in no doubt he’d do no matter how big they were.”

    https://thepointman.wordpress.com/2018/02/09/how-to-turn-around-a-failing-economy/

    Pointman

    Liked by 12 people

  5. mr.piddles says:

    “policy that focuses wage and income benefit directly to Main Street, ‘production economy'”

    Much simpler than “learning to code”. Trust me on that.

    Liked by 8 people

    • Sloth1963 says:

      And “learning to code” does not equal software engineering any more than being a plumber makes you an expert in hydrodynamics.

      Liked by 4 people

    • Reserved55 says:

      If the 70 year old President knows how to code it must not be that difficult. The Mooch and Cohen say he’s the best coder alive.

      Like

      • KAR says:

        “Coding” is as hard or easy as writing or playing piano. Easy to code bad. Hard to code good. BTW, when I retired 17 years ago (retired EARLY that is … !) there were already TOO MANY CODERS. I used to play chess to keep from going bonkers, not enough work for all of us!

        Liked by 2 people

        • tonyE says:

          I spend a lot of time looking at the crap that the folks in Bangalore call “code”: Crappy, fast and cheap… there… then we have to fix it.

          Trust me, I get really pissed off when they pick at my code at peer review time. They have no clue WHY things are done in specific ways: maintainability, simplicity, robustness, reliability, efficiency… etc. That’s why “coding” is not “engineering”. They make comments that just show how clueless and uneducated they are.

          Liked by 1 person

        • OlderAndWiser says:

          What I’ve always said:
          Everyone learns to read and write pre-K (or elementary school). That does not make them an essayist. And writing essayists does not make them a book author. And writing books does not make them best sellers. And best sellers do not make them Nobel prize winners.

          The best coders combine art with science. And write the tightest code with the greatest functionality. The shitty ones write lots of lines of code to do narrow functionality.

          Very similar to great authors who can express great ideas concisely and clearly.

          Like

  6. Your Tour Guide says:

    Now….. We need to do some looking into WHY
    rents are skyrocketing in location after location.

    The incomes are going up, but the rents are outpacing
    them. BIG TIME in metro Atlanta. Other treepers
    seeing the same in their areas?

    Can’t have a middle class if the kids can’t afford to
    move out, even with a roomate.

    Liked by 2 people

    • mr.piddles says:

      Can’t speak with any particular authority or , but one thing to consider is that Big IT has decentralized a bit throughout the country from places like Boston, New York, etc. (where it’s REALLY expensive). Places like Atlanta, Charlotte, Houston, and the like seeing big influxes of highly-paid workers. Geographically distributed tech teams are a *little bit* harder to manage and coordinate, but these big companies have had a lot of practice over the past, say, 20 years. Attempts at off-shoring large chunks of operational units (especially in group-integration capacities) gave IT a lot of practical experience in that regard.

      Like

    • Perot Conservative says:

      Simple Supply an Demand.

      1. We’re importing the top 1% from China and India.
      2. We’ve imported 30-50 Million illegal immigrants.
      3. Housing restricted in places like California with dozens of environmental limiting factors, reducing Supply, yet over 5 Million illegal immigrants who will live way over traditional capacity in apartments or homes. (California no longer enforces its 2 + 1 rule, i.e. a 1 bedroom apartment used to have s maximum capacity of 3 people, a 2 bedroom 5 people.)

      Liked by 2 people

    • Tour Guide, Rent is like property taxes, when the taxes go up so does rent and the price of houses. Look at your county and city tax assessors. Also check out the school taxes and if there is a community college the property owner is paying taxes on. All that gets added on to the rent.

      Liked by 1 person

      • deplorable says:

        How many renters complain about increasing rent while at the same time voting for new property tax levies that result in rent increases? The landlord needs to increase rents in order to pay the new higher property tax bill.

        Liked by 3 people

      • billrla says:

        sherryoftexas: I just received our LA County property tax bill and it went up again. Twenty percent increase since 2011. The “amenties” of our neighborhood now include “homeless” people, passed-out on sidewalks, spending their days at Starbucks, pushing-around shopping carts full of “belongings,” and enjoying our famous outdoor latrines.

        The State of California has been hoovering-up taxes and fees from increased incomes like there’s no tomorrow.

        Liked by 2 people

        • WSB says:

          We had a 6% increase last year and 56% this year. fought it down to 30% but may have to move.

          Like

        • billrla, I am flabbergasted that your taxes go up because of the homeless, but I guess that also helps to pay for the illegals too. Here, the more depressed because of undesirable things the lower the taxes would be, but then I am in a VERY rural area, (30 miles to the closest gas station or grocery store. However we did get a Family Dollar a couple of years ago that we call our local walmart. Back to the point, I am sorry for you that CA has gotten so far out of control in their control of citizens. I know several ex-CA that have moved to TX, I just wish they had learned that their own voting is what caused their problems in CA.

          Like

    • Dutchman says:

      YTG,
      Suspect the key is not so much the “Atlanta”, as it is the “Metro”. Yes, high tax States vs. Low tax States, but also living in a Big city, (typical Blue zone) as opposed to a more rural area.

      Basic supply and demand. Lots of people want to live in the cities, for the jobs ans percieved ameneties/advantages.

      Only so much land, hence lots of multi story buildings, and high realty prices.

      Rural, there is,still LOTS of land, reasonably priced. Just gotta resolve the work equation, and adjust what you value.

      Liked by 3 people

    • wodiej says:

      Yes, in Indiana too and the apartments are not that nice. Indiana has a relatively low cost of living.

      Liked by 1 person

  7. 56packardman says:

    It is interesting that this article appeared in the left-leaning, often anti-Trump Atlantic.

    Liked by 4 people

  8. Perot Conservative says:

    I see Sundance liked my find (post( from The Atlantic a few hours ago.

    Also posted same facts to The Hill.

    Pass USMCA!

    Liked by 4 people

  9. bluecat57 says:

    Oops.

    Like

  10. Mike in a Truck says:

    Bad news for the Communist Democrats.

    Liked by 4 people

  11. Magabear says:

    Anytime lawyers wages are flattening out it can only be a good thing. 😁

    Liked by 4 people

  12. ed bernay says:

    The author of that article doesn’t credit Trump. He credits a tight labor market and rising minimum wages in individual states. I wonder what is causing the tight labor market.

    Liked by 2 people

  13. alliwantissometruth says:

    What’s amazing is you’d think that morphing back from a corrupt global Wall Street / Foreign Market scam economy to the original intent of a Main Street / National Company economy would take decades, but President Trump’s aggressive and honest strategy of simply calling out the scam and putting immense pressure on the culprits is forcing a return to original intent at lightening speed

    It ain’t that complicated. It just takes balls and a true desire to see America succeed

    Globalist monied power is being vanquished by one man with the conviction to tell the truth and do something about it

    Liked by 7 people

  14. Raptors2020 says:

    Mitt’s in a snit, cuz what he can git, took a hit, by quite a bit!

    Liked by 6 people

  15. allhail2 says:

    And the MSM will have this as their feature weekend story in 3..2..damn it, Pres Trump was seen going into an Italian restaurant. Schiff was just handed notes from the evening and will announce that his committee will now look into why Trump was seen eating fried chicken, corn on the cob and black eyed peas by Schiff’s wife’s third cousin on her step father’s side who heard about it from a bus boy two zip codes away.

    /s….(just in case, ‘cause seriously, I don’t have the time or the crayons to explain it)

    Liked by 1 person

  16. NJF says:

    I love baseball bat POTUS.

    This terrifies them too.

    Liked by 11 people

  17. Kelly says:

    This is great news for America and the “production class”, but let’s hope it is not at the expense of the stock markets. Even for those of us in the middle class, future retirement depends on growth of 401Ks and mutual funds. We are all in the investment class now.

    Liked by 1 person

    • tonyE says:

      But at some point, greedy people in Wall Street will realize that the money is not in International but Domestic companies… huh?

      I think that other than their casino games, Wall Street is fundamentally agnostic about the Domestic vs. Globalist dilemma… or it should be. After all, it should be all about facilitating the flow of capital and making money.

      Sure, the adjustment might be painful, so in the mean time the idea is not to hold on to one job for too long and then transfer your 401K to an self managed IRA account.

      Liked by 2 people

    • Dekester says:

      IMO not mutual funds…certainly not here in Canada.

      I am no expert, but if I was an American, I would be buying some of out Canadian bank and energy stocks, your dollar is making some of them very inexpensive.

      God bless PDJT

      Like

    • OSP says:

      Move your 401K monies into funds within your plan that will not take the full brunt of a serious market decline. You can always move the money back into growth funds after a decline.

      Liked by 1 person

  18. OlderAndWiser says:

    “Yes, President Trump is closing the wealth gap.”
    Sundance, while I DO appreciate what you do, I MUST correct what you said above. A favorite pet peeve of mine is when politicians confuse WEALTH with INCOME. PDJT IS closing the INCOME gap. That is the key.
    While high incomes *sustained* over time can create wealth, the two are not correlated because incomes are very dynamic, wealth less so.

    While I’m at it, I’m absolutely shocked that NO ONE has challenged the Dims’ talk of a wealth tax. The constitution prohibits a wealth tax. The fifth amendment reads “…nor shall private property be taken for public use, without just compensation.” Yes, the government can use eminent domain to take property but they MUST compensate the owner. So they cannot take any part of your wealth without compensating. I’m not a lawyer, but this seems so self explanatory., and if the clear meaning of the words in the constitution have been perverted to mean something else-…well then, shame on all of us.

    Liked by 2 people

  19. tonyE says:

    Not all “high wage” earners are parasites.

    Many of us are being hit by the H1B plague!

    Liked by 2 people

      • billrla says:

        tonyE: The H1B Visa Program enables U.S. employers to hire foreign workers in the U.S. The program was originally developed to help employers recruit hard-to-find talent, especially in scientific and technical disciplines (for example, PhDs working in biotech and high-tech companies).

        Liked by 1 person

        • mikeyboo says:

          And now it is used to debase the wages of american workers.

          Like

          • Dutchman says:

            H1B is to tech workers, what illegal aliens,are to construction workers.
            So, welcome to the club, and to my world.

            And frankly, as I watched over 20-30 years, construction go from only illegals doing clean up laborer jobs, to not being able to find anyone on a large job site who spoke english, as they took over Carpenter, Plumbing, Electrician jobs,….high wage workers nodded their heads, when politicians said “illegals only take jobs Americans don’t want!”

            So, yeah,…welcome to my world. Its a three prongued attack; outsourcing, H1B, and illegals. ALL 3, collectively dessimating American workers.

            Liked by 2 people

            • GP says:

              It’s much worse (wage depression) than some people realize. I retired out of IT just in time (about 2 years ago). What I did (VoIP) paid on average $40-55/hr. Now they want you to do twice the work (VoIP AND routing/switching) for about $30-40/hr. The reason for this are H1B programs.

              Liked by 1 person

    • OlderAndWiser says:

      I had the MD of a foreign company wanting me to intro him to all my contacts in high places so he could get more contracts to bring in more H1Bs and he would pay me for them.
      I told him to pound sand.

      Like

  20. Bigly says:

    It’s so sad to read twitter, any political twitter account , and read the vicious hate against president trump. All ignorant and blind hate.

    So the fraction of voter population having CTH break down the positive news is such a blessing, thanks.

    Liked by 3 people

  21. What is ‘the investment class?’ Being long retired without a pension I am reliant on my IRA. I guess this makes me a member of the investment class? I would not like to see ‘Wall Street’ lose too much since I’m now dependent on it.

    Like

    • OSP says:

      Repeating my reply to another comment above:
      Move your IRA monies into funds/stocks that will not take the full brunt of a serious market decline. You can always move the money back into growth stocks/ETFs after a decline.
      Above all, be vigilant – we are in a very volatile time.

      Like

    • ltravisjr says:

      I think the usual guidelines apply. I am no expert but think if you are approaching or are in retirement you should have a conservative portfolio with cash, utilities, and bonds, etc. that are mostly immune to market swings. IOW once you have it, protect it. I wish I were in that position; I am 13 years out and still depend on more growth with my kids’ college and potential major medical issues for them lying ahead.

      Like

  22. Ma McGriz says:

    “Earnings are growing most slowly in higher-wage industries, such as medical labs, law firms, and broadcasting and telecom companies.”

    Maybe broadcast and telecom companies will rejoin Main Street America once a few more things get fixed.

    Like

  23. Devil in the Blue Drapes says:

    Good news on the surface, BUT the Republicans are busy working behind the scenes to pass a new bill that will eventually have the opposite effect, in pushing wages down and more “temporary guest workers” that replaces American workers and new college grads.

    Senators Mike Lee and Rand Paul almost single handedly got the S-397 bill passed on the Floor, without debate, on Thursday 10/2.

    The only reason it failed (for the time being), is another R Senator David Purdue put the kibosh only for his “carve out”.

    Like

  24. Devil in the Blue Drapes says:

    Dagnabbit hit Reply button too quickly.

    Bottom line, the Rs will go back at this next week, while everyone if focused on “impeachment” and pass this bill.

    It will lift country caps on temp guest visas, which will in turn, turn into Green cards.
    The biggest beneficiary right now is India. Often these increases in more foreign nationals replacing Americans is tied to trade deals.

    Call your Senators and tell them NO.

    Like

  25. Some months back a Treehouse denizen pointed out some very serious shortcomings of USMCA, within the fine print. Could you bring those comments up to date. They were quite worrisome.
    God bless

    Liked by 1 person

  26. BigTalkers says:

    This is great to see. “Real wages” for most low and moderate income workers have bern falling since the 1970’s.

    Abandoned by the Democrats, this President will most assuredly continue his Renaissance for the American working class.

    Like

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