A year after the tax cut, wages, bonuses not as hot as promised

not so much
Share of total compensation represented by nonproduction bonuses for private sector workers since 2008. Economic Policy Institute
not so much
Share of total compensation represented by nonproduction bonuses for private sector workers since 2008. Economic Policy Institute

Remember early this year when Republicans (including here in Nevada, Sen. Dean Heller) were crowing about all the bonuses and raises that workers were getting as a result of the tax cut bill that became law last year about this time?

Yeah, not so much.

Economic Policy Institute economist Lawrence Mishel analyzed recently released Bureau of Labor Statistics data. “The bottom line,” Mishel wrote…

…is that there has been very little increase in private sector compensation or W-2 wages since the end of 2017. The $0.02 per hour (inflation-adjusted) bump in bonuses between December 2017 and September 2018 is very small. Nonproduction bonuses as a share of total compensation grew from 2.73 percent in December 2017 to 2.78 percent in September 2018, an imperceptible growth. Moreover, whatever growth in bonuses has taken place is not necessarily attributable to the tax cuts, rather than employer efforts to recruit workers in a continued low unemployment environment.

Much of the tax cut hype at the time was fueled when several firms immediately announced one-time bonuses shortly after the tax cut bill was passed. Many of the bonuses and wage increases announced to coincide with the bill, however, had already been planned, and in cases had already begun to be implemented, well before the tax cuts became law.

“An examination of overall wage and compensation growth does not provide much in the way of bragging rights for tax cutters, especially given the expectation of rising wages and compensation amidst low unemployment,” Mishel wrote.

Hugh Jackson
Editor | Hugh Jackson has been writing about Nevada policy and politics for more than 20 years. He was editor of the Las Vegas Business Press, senior editor at the Las Vegas CityLife weekly newspaper, daily political commentator on the Las Vegas NBC affiliate, and wrote the then-groundbreaking Las Vegas Gleaner, which among other things was the only independent political blog from Nevada that was credentialed at the 2008 Democratic National Convention. He spent a few years as a senior energy and environmental policy analyst for Public Citizen, and has occasionally worked as a consultant on mining, taxation, education and other issues for Nevada labor and public interest organizations. His freelance work has been published in outlets ranging from the Guardian to Desert Companion to In These Times to the Oil & Gas Journal. For several years he also taught U.S. History courses at UNLV. Prior to moving to Las Vegas, he was a reporter and then assistant managing editor at the Casper Star-Tribune, Wyoming’s largest newspaper.

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