Speaker Ryan: ‘Thriving Economy’ Does Not Include Wage Gains

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AP

A “thriving economy” does not include salary or wage increases for Americans or their adult children, according to House Speaker Paul Ryan’s enthusiastic description on May 17.

Ryan excluded wage gains as he touted the economy’s performance in his May 17 press conference:

Jobless claims remain near a 48-year low. Retail sales are up for the second month. Industrial production is up for the third straight month. So the economy is growing, workers are getting ahead. There are new jobs and opportunities being offered by the day …

A thriving economy means there are more job openings. A thriving economy means there are more opportunities. A thriving economy means families get ahead, people get out of poverty, kids come out of college with opportunities and offerings. That’s what a thriving economy means — and there could not be a better time to take action to help more people join our workforce.

Ryan’s decision to exclude wages allow him to ignore the most startling impact of Trump’s economy — the growing marketplace pressure on business to provide a wave of wage increases to voters. This wage-pressure has not existed since 2007, or 1998, or the 1960s, depending on how wages are measured.

Ryan even downplayed the importance of wage raises and salary increases to Americans — many of whom have seen their wages stall or shrink for 30 years. After his “thriving economy” remarks, Ryan declared that “it is very good for us to be making progress on these things that matter the most in people’s lives, which is why we are here.”

But Trump-generated wage increases are a big problem for Democrats. 

“It’s a very big concern,” Democratic pollster Celinda Lake, told TheHill.  “The economy is the No. 1 issue out there for people and right now Trump has a very aggressive economic message that seems to cross traditional party lines to voters.”

If Trump wants to win the November election, he should start jawboning CEOs to raise voters’ wages before November, said Mark Krikorian, director of the Center for Immigration Studies. Trump could tell CEOs they will not soon get another wave of amnestied or immigrant workers, he said, adding:

It is entirely possible that you could see instances of higher wages offered in response to a clear message that business is not going to be able to rely on foreign workers …  and it certainly worth trying — it is not as if they are rolling to victory now.

“President Trump has a choice in how he approaches immigration,” said Rosemary Jenks, policy director at NumbersUSA. “He can either keep his [2016] promise to the forgotten Americans and let them see rising wages, better jobs opportunities, and economic growth in their lives or he can cater to the business communities that are the swamp.”

Ryan’s dismissal of wage growth comes as investors and CEOs face unprecedented marketplace pressure to raise wages.

The pressure is especially painful for Wall Street investors because every dollar directed back to wages is a dollar taken from the future profits that support current Wall Street investments.

The pressure was sketched May 16 by the National Association of Manufacturers which said that “72 percent of manufacturers are increasing employee wages or benefits.”

That is a good number, but is well below 2007, when “82 percent of the private sector workforce received real wage gains,” according to a 2007 NAM report.

NAM declined to provide additional information about the 2018 survey to Breitbart News but did credit the coming wage gain to the tax bill, not to Trump’s low-immigration policies.

The CEO pressure for more workers is also being felt by Trump, who has repeatedly said in public that employers need more foreign workers to fill the new jobs. On May 5, at a roundtable event in Cleveland, Ohio, Trump pushed the idea of importing workers and downplayed the promise of growing wages:

And we do need people coming into our country.  You know, at 3.9 percent unemployment, we need people coming in.  But I will tell you this, we want people to come into our country on the basis of merit.  Not picked out of a — (applause).  So we’re working on merit systems because we need people to help.

However, Trump’s policy of “Buy American, Hire American” deserves credit for the wage pressure, in part because CEOs complaints started well before the tax bill was passed.

The combination of Trump’s stronger immigration-enforcement push and the growing economy is delivering higher wages and overtime to many employees, including African-American bakers in Chicago, Latino restaurant workers in Monterey, Calif., disabled people in Missouri, high-schoolers, the construction  industry, Superbowl workers, the garment industry, and workers at small businesses, and even Warren Buffett’s railroad workers.

Still, the wage raises have been scattered, small and have done little to make middle-class Americans feel more confident and secure. A May 9 poll from Monmouth University, for example, shows that 65 percent of Republicans, but only 44 percent of independents, say their family has benefitted greatly or somewhat from the economic gains.

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In response to the tight labor market, Ryan is not urging CEOs to raise wages but is instead trying to raise the labor supply for CEOs.

In his May 17 press event, Ryan used his description of a thriving economy to justify the welfare reforms in the farm bill, which would pressure people to work by cutting their food-stamps. He said;

This going to get more people out of poverty. This is going to help people get a steady job. This is going to get more people moving towards a good career. It will help people go from where they are to where they want to be, to realize their own version of the American idea.

Ryan also sketched out his plans to deliver a wave of DACA amnesty-labor to business, saying: 

So the question is, could we have a bill that has a vast majority of Republicans that some Democrats would support. What’s the combination?

To get that amnesty bill, Ryan is raising funds which are provided by his business allies to the pro-amnesty Republicans who are pushing the amnesty-discharge petition.  

Ryan’s support for a bigger labor-supply reflects Ryan’s long history of supporting “any willing worker” policies which allow companies to hire cheap foreign employees instead of middle-class Americans. When talking about Wisconsin’s dairy industry, for example, he has repeatedly urged continued reliance on immigrant and refugee workers instead of labor-saving automation, such as cow-milking robots built by employees in Iowa.

The federal government should not skew the labor market, said Krikorian, who added that government does intervene by flooding the labor market with extra immigrant workers each year. He said:

To the extent that government has its thumb on the scale in the economy, it should be in favor of employees over employers …when in doubt, the impact should be to benefit the ordinary working people, and a tight labor market [caused] through less immigration does that.

The government supply of extra immigrant labor prevents companies from innovating, he said.

Clearly, when the Republicans talk up guest-worker programs and importing foreign workers, business factors that into their planning and decisionmaking. If business figures they will be able to import more workers, they don’t start thinking outside the box about how to recruit and train American workers. Politicians’ comments shape the expectation of corporate planers — as well they should – and it is a perfectly rational response.

The opposite message – ‘You will not get this unending flow of [immigrant] workers’ –  would also shape their planning in a way that is more beneficial for the country.

“It is possible that the President can talk into existence wage hikes simply by making clear to business they will not able to keep importing workers,” Krikorian said. “How quickly that would happen, I don’t know.”

 

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