The truth about wages: Obama's economy
The left and “progressives” love to blame wage stagnation on greedy businesses wanting to gobble a larger share of the pie. But it's actually a product of businesses' uncertainty about taxes, regulations and employee-benefit costs — which the Obama administration has exacerbated.
Merrill Matthews, resident scholar at the nonpartisan, free-market Institute for Policy Innovation ( ipi.org), notes that fresh U.S. Labor Department data show nongovernment, nonsupervisory workers' average hourly wages, adjusted for inflation, have fallen 0.9 percent since the recession ended in June 2009 — “since, well, President Obama's economic policies were put in place.”
Mr. Matthews says businesses “are reluctant to invest” — in pay raises or anything else — without knowing future costs of regulations imposed by a president whose love of regulations is rivaled only by FDR's. And with rising health-care costs, which ObamaCare will exacerbate, holding down wages helps offset rising overall costs for employee compensation.
Then there's uncertainty about taxes. This administration has imposed more new taxes than any other ever has — ObamaCare alone brings 21. And it wants to “reform” — which means increase — corporate taxation.
Businesses' response to these Obama policies — erring “on the side of financial caution” by holding on to their money in case it's needed — is the same as that of families “facing a number of unknown possible future costs,” Matthews says. And with no indication that Obama will change his economic course, “expect the stagnant-wage trend to continue, at least for the next three years.”
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.