In response to Michael Clark’s letter about Trump tax cuts ("Tax cuts are working already, Jan. 30), since he calls himself an economist, he should know better than to form conclusions based on anecdotes and cherry-picked evidence.
That some employers have given employee bonuses since Dec. 22 does not prove they were caused by Trump tax cuts or Clark’s beloved “free-market economic theory.”
The truth is that earnings for the median worker had already begun to rise modestly before Trump (5.3 percent in the last three years, a sign of some labor market tightening, finally).
Clark also failed to remind readers what so-called free- market economics has given us: for the past decade real wage growth has averaged just 0.5 percent annually, and for three decades before that, wages for the bottom half of the labor market have been stagnant.
Here’s some more evidence that Clark’s thesis is half-baked. The day before his ideologically driven letter appeared in the Register, Industry Week published an article by Bloomberg writer Rebecca Greenfield: “What Companies Are Really Doing with Their Tax Windfall (So Far): Only 4% of companies have increased wages and 3% said they will next year. A further 13% are considering wages and 80% said they aren’t considering giving raises at all.”
According to Greenfield’s sources, “it’s too early to tell what the trickle-down impact of the bill will be, if any. The bonus and wage increases provided to employees have, so far, been a fraction of the savings companies are seeing from the tax bill.”