The Census Bureau recently reported that American wealth continues to rise for rich and poor alike, and shows no signs of slowing.
The average household income has increased about 8.5 percent over the last two years. During the Obama Administration, middle class revenue was slow to uptick and the poverty rate, unfortunately, rose. Poverty did begin to tick down toward the end of his term, but still left 40 million Americans struggling below the income line. Much of the wealth was concentrating at the top.
However, during the first year under Pres. Donald J. Trump, the economy has performed a quick pivot.
Stock Market Gains
There are tremendous misconceptions about what the stock market means for everyday Americans. The continual records being set due to Trump’s pro-job, pro-business agenda do little to put dollars directly into working class citizens’ pockets. The wealth created, or lost, on the market favor the middle class and wealthy.
That’s not to say that working stiffs don’t see the gains. In 2017, the remarkable stock market gains have come on the heels of business confidence that cumbersome regulations are being wiped off the books. About 77 percent of CFO’s credit Trump with the bull market run and workers hiring received a kick-start.
Middle Class Wealth
The good news for middle class families is that the economy is growing and so is your income. The numbers appear to demonstrate that the 2016 median income hit an all-time high and top the record-setting 1999 figures. If you don’t feel lucky, there may be a good reason for that…you’re not.
During the Obama Administration, the Census Bureau changed the way it calculated these numbers. In reality, last year’s middle-class household incomes were 1.6 percent below 2007 levels and 2.4 percent under the 1999 boom.
In other words, the middle class was slightly worse off when Obama left office than when he took the oath. But that appears to be rapidly changing in the deregulation Trump era.
American Jobs Growth
Company values have increased, and those outfits have started hiring again. Many left-leaning media sources are attempting to split the stock market gains away from spiraling unemployment rates. Others are speciously claiming that the Obama Administration is responsible for the jobs growth, despite the job-killing regulations imposed during his tenure.
There is an absolute one-to-one correlation between a company earning higher profits and hiring people. Unemployment has fallen to a 16-year low in 2017, and there are an estimated 6.2 unfilled job openings available. Paychecks have replaced unemployment for about 1 million Americans. People are going back to work and that pulls the lowest earners up.
Minimum Wage Uptick
Community organizers who helped push through laws requiring higher minimum wages in cities such as Seattle saw an immediate downtick in worker earnings.
Seattle called for an immediate hike to $13 per hour and incremental increases to a $15 minimum wage. These non-market driven raises drew expected market corrections. Workers took the brunt of hours being cut and an average loss of $125 monthly income. However, the current business climate has companies raising wages out of competitiveness.
Outlet giants Walmart and Target are going head-to-head this year over new hires and employee retention. Last year, Walmart upped its entry level, part-time rate to at least $10 per hour from $9. Full-timers were at $13.38. Target has announced its 2017 entry level pay to start at $11 and plans to up that to $15 by 2020. Floor managers are already earning about $15 per hour. The retail chain would increase nearly 500,000 employee paychecks to compete against Walmart in 2017.
The retail wage wars appear to reflect a growing surge in market-driven increases among the poorest Americans. Even the liberal Economic Policy Institute admits wages are growing faster for poor Americans than they are for the rich for the first time in the 21st century. Wage growth has increased between 2.5 and 2.9 percent through July. While some economists consider that sluggish, worker earnings continue to point up rather than down and that is good news. Hourly workers are seeing more money in their pockets.
While the current economic environment appears to be putting more bread on the table, Americans may be replacing those loaves with prime rib if the current policies come to fruition. The renegotiation of NAFTA and GOP-proposed tax cuts could have a banner effect on incomes from top to bottom. American wealth appears to be on the rise.
~ Liberty Planet