Trump administration contests BLS wage stagnation statistics.
September 06, 2018
Trump Administration challenge BLS statistics. In response to recent reports by the Bureau of Labor Statistics that after the passage of the December Tax cut, the typical worker’s wages have declined, the Trump administration and the Council of Economic Advisers have issued a statement indicating that it has in fact increased by 1.4 percent. Within this report, the Trump administration argues that the BLS’s findings were misleading because they over estimated inflation and did not include items such as bonuses and benefits. Despite these critiques, CEA Chairman Kevin Hassett assured the statement from the White House is not meant as a blithe against the BLS, but rather to debunk statistics that contradict the administrations predictions. However, Hasset has been known to over embellish and proclaim overly ambitious economic predictions, and while Georgetown economist Harry Holzer acknowledges that Hassett’s critiques to the methodology of the BLS are valid, they most likely paint a far rosier picture than what is actually happening. In respect to wages, the overall economic climate is a multi-faceted issue and a variety of different sources are saying different things. Over the past few months, the BLS’s statistics have found that gains in full-time median weekly earnings lagged inflation and hourly earnings average have kept even with the Consumer Price Index. Similarly, Fox News’ AFL-CIO President Richard Trumka reported that, “Wages have been down since the first of the year.” However, the Trump administration, and often the President himself, contests these findings. [The Hill]
Trump threatens government shutdown for border wall, but not all GOP leaders agree. In a series of flip flop positions, President Trump recently threatened to shut down the US government if Congress failed to provide sufficient funding for border security, a position in direct conflict with what he had said during a Daily Caller interview on Tuesday. Despite this, figures such as Senate Republican leader Mitch McConnell are confident that the president will sign funding bills before the end of the fiscal year in order to avoid a shutdown. Leaders from both party lines hope to avoid a shutdown and any other “drama” in anticipation of the fast-approaching Midterm Elections. There is no consensus now, however, regarding the best course of action for a border wall. Some leaders such as Republican Representative Jim Jordan insist the border issue should be dealt with now while others argue that it should be addressed after the elections. [The Hill]
Study shows that Top Tier Colleges may not be the most economically rewarding education track. In a study from the New York Federal Reserve, researchers found that graduates from selective college out earn their peers in the long term, with STEM degrees adding to this premium. These finding indicated that alumni of for-profit colleges such the Ivy League, University of Michigan, and Southern Methodist University earned 18 percent less than their peers at private not-for-profit colleges. Furthermore, graduating from a top college made very little different in the employability of graduates and actually decreased one’s chances in comparison to not-for-profit graduates. The study also found that enrolling in a selective college offered long-term economic mobility for students and the income gap between students who attended for profit colleges and those who attended non-profit colleges grew by 117 percent over 10 years. [Reuters]
Economic Indicators and News
Despite decline in job growth, economists claim that economy remains strong and versatile.According to the ADP Employment Report, private companies added 163,000 jobs in August. This figure is a decline from 217,000 in July and well below Wall Street’s expected 190,000. The report also revealed that the private payroll growth slowed to its weakest level since October. Furthermore, there was a decline in small business hiring. But despite this collective decline, experts claim that the economy nonetheless remains robust. Experts argue that the trade war has had an impact on big companies, as they are now more cautious with their hiring. [CNBC]
Jobless Claims drop to a near 49-year Low. According to the US Weekly Jobless Claims report, the number of Americans filing new claims for unemployment aid fell to a near 49-year low; thereby indicating a strong labor market. This shows that the economy has managed to remain robust despite the rising trade tensions with China, Mexico, and Canada. This most likely will mean that the Federal Reserve will raise interests rates for the third time this year. [Reuters]