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5 economic statistics every voter should know
Between now and November 6, you’ll hear a lot about the economy.
On Friday, Trump appeared outside the White House with his economic advisers to tout second quarter GDP growth, which came in at a robust 4.1%.
“We’ve accomplished an economic turnaround of historic proportions… Everywhere we look, we are seeing the effects of the American economic miracle,” Trump said.
A 4.1% growth rate is strong, but not historic or unprecedented. When Obama was president, for example, the economy grew at a faster rate in four separate quarters. Second quarter growth was also juiced by one-time factors, like businesses stocking up on inventory before Trump’s tariffs kicked in.
More importantly, GDP growth is a measure of the aggregate economy. But people experience the economy as individuals.
Other economic indicators reveal why, while the overall economy appears healthy, many individuals are falling further behind.
In many cases, Trump’s economic policies are making the situation worse.
Here are 5 economic statistics every voter should know.
The GDP numbers show the economy overall is growing. But the real wages of the average American are going down. Real wages are 9.3 percent lower today than they were in 2006.
The actual amount people get paid, known as nominal wages, have increased about 12.9% over the last dozen years. But that growth has not been enough to keep up with inflation. That’s why real wages have dropped.
Even more remarkably, real wages have dropped sharply since Trump passed his massive tax cuts at the end of last year. The Trump administration promised that the average family would see their income go up by $4,000. Instead real wages decreased by about 1.4%.
One reason why real wages can go down while the economy expands is that workers are getting a shrinking percentage of corporate income. Workers’ share of corporate income in 1958 was 80.9%. It remained over 80% for much of the 1980s and 1990s. Today, workers receive just 75.7% of corporate income.
“The extra growth we are seeing in the economy is going somewhere: to capital owners and people at the top of the income distribution,” Heidi Shierholz, director of policy at the Economic Policy Institute, told the Washington Post.
In other words, despite the flashy headlines about individual companies handing out modest bonuses or other benefits after the Trump tax cuts, corporations overall are using the money to reward shareholders, not workers.
A huge chunk of the windfall corporations received from the Trump tax cuts has been spent by corporations to buy back their own stock. Why?
“By increasing the demand for a company’s shares, open-market buybacks automatically lift its stock price, even if only temporarily, and can enable the company to hit quarterly earnings per share (EPS) targets,” William Lazonick explained in the Harvard Business Review.
Corporate executives get most of their income through stock options and other stock-based instruments. So driving up the share price through buybacks is in their own self-interest. But massive buybacks leave little money to either increase wages or invest in capabilities that could increase productivity (which ultimately result in wages increases).
In the first quarter of 2018, corporations spent $242.1 billion on corporate stock buybacks, an all-time record. That record was smashed in the second quarter, when corporations spent $437 billion on buybacks.
The average CEO for an S&P 500 company made $13,940,000 last year. That’s 361 times higher than the average worker, who made $38,613.
In many companies, the ratio is even worse. The CEO of Mattel, Margaret H. Georgiadis, made $31,275,289 last year — 4987 times more than Mattel’s average worker.
In the 1950s, the average CEO made 20 times the average worker. Since the 1950s, while wages for workers have stagnated, CEO pay has increased by 1000%.
While CEOs rake in millions, 11.4% of Americans still make poverty-level wages. That means that “even with full-time, year-round employment, their earnings would still fall below federal poverty guideline for their family size.”
This number has been improving slightly — in 2005, 12.6% of American made poverty-level wages — because of a tightening labor market.
Still, one in nine American workers are not paid a wage that allows them to escape poverty. For a family of 4, the poverty level in 2018 is $25,100.
The lost parents
The Trump administration separated hundreds of parents from their children at the border and then lost track of them.
As of Thursday, the court-imposed deadline to reunite all separated families, the Trump administration had reunited 1,442 families with children older than 5. Another 378 children were released into “appropriate circumstances,” like the custody of another family member.
On Friday, the government said there were still 650 children who have not been reunited with their parents.
How the numbers break down
In some rare circumstances there may be legitimate reasons not to reunite a family. There are a few parents, for example, the government says may pose a danger to their child. But in far more cases, the Trump administration has simply lost track of the parent.
431 children have parents who are no longer in the U.S. and were likely deported without them. For other children, their “parents were released from government custody into the US and could not be reunited.” The location of nearly 100 parents is “under review.”
The Trump administration was prepared to wash their hands of this morass. Their view is that the remaining 650 children are “ineligible” for reunification and that the dispute is over.
A federal judge was not having it.
Judge Dana Sabraw of the Southern District of California on Friday mandated that the Trump administration turn over a list by Wednesday of all parents deemed "ineligible" for reunification by the government, including those who have been deported, those who have been released into the United States and those who were not reunited because of criminal history.
The ACLU and other non-profit groups are planning to use the list to help reunify these families.
The next big legal dispute
Once families are reunified, can the government immediately deport them? That’s the next issue that Judge Sabraw is going to tackle.
The government says hundreds of parents have agreed to be deported, with or without their children. The ACLU presented evidence that many families are actually being coerced into signing documents they don’t actually understand. The ACLU is demanding at least seven days to provide the families with legal advice.
Judge Sabraw is expected to rule on the issue soon.
Quote of the day
“Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel in order to be tough.” — Franklin D. Roosevelt, October 13, 1940
Then and Now: Rudy Giuliani
On July 8, just three weeks ago, current Trump attorney Rudy Giuliani praised Michael Cohen, Trump’s former attorney, for his honesty.
Giuliani on whether he is concerned that Michael Cohen will flip on Pres. Trump: "I have no concerns that Michael Cohen is going to do anything but tell the truth and if he does, as I said, there's no suggestion that anything happened" https://t.co/LEjDQ0Nhtt #ThisWeek pic.twitter.com/qHJUrgM7FcJuly 8, 2018
There are more tapes where that one came from.
Jay Goldberg, a former attorney for Trump, says Giuliani’s erratic comments have been “damaging Trump’s case immeasurably… It ranks near 100 in terms of damage.”
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