Let’s start with the good news. The unemployment rate keeps falling, and economic growth is solid. These headline numbers are the ones that Republicans emphasize (and that the media sometimes overhypes).
As a result of the growth, nominal wages – that is, the numbers people see in their paychecks, before taking inflation into account – are growing. Over the past year, the average hourly nominal wage has risen 2.7 per cent.
There are two problems, though. First, 2.7 per cent isn’t a great growth rate for nominal wages. It was rarely so slow in the entire second half of the 20th century, for example. These days, though, most workers don’t receive their fair share of economic output. An outsize share instead flows to corporate profits and the rich.
Second, nominal wages by themselves can’t buy a higher standard of living. Prices matter, too. When the prices of good and services are rising faster than nominal wages, people end up with less buying power. And that is exactly what’s happening now.
...Add it all up – faster inflation plus mediocre nominal-wage growth – and you get a stagnation in real wages. Welcome to the Trump wage slump.
...there is no reason to think that most Americans are on the cusp of truly healthy pay increases.
They face too many obstacles: Companies that are larger and more powerful than they used to be; unions that are weaker; and, thanks in large part to Trump, a federal government that keeps siding against workers, be it on overtime pay, work rules, health care costs, for-profit-college scams or tax cuts.Meanwhile, America's rich folks are making out like bandits. And Trump has taken the swamp creatures in-house. Yesterday we took a look at Trump's greasy commerce secretary, Wilbur Ross. Today there's more from The Intercept.
Ross, whose net worth is estimated at around $700 million, made a good chunk of that fortune selling U.S. steel companies to a foreign entity. In 2002, Ross and his investing partners began buying up steel companies that were either in or near bankruptcy, including LTV Corp., Weirton, and Bethlehem Steel. They consolidated them into the International Steel Group and, in 2004, sold that company to the Indian steel magnate Lakshmi Mittal, making some $2 billion in cash on the deal.
...At the time of the ISG sale, the Washington Post noted that Ross was able to make a stunning 12-fold gain on his initial investment in part by not paying steel workers’ pensions and retiree health care costs. But there was another way that Ross maximized his profits: by not putting up millions of dollars to ensure that the environmental messes associated with the plants he bought would be cleaned up.
Several state and federal environmental laws require owners of industrial properties to place bonds to cover the estimated future costs of cleaning the sites. The government had requested $162 million from Bethlehem Steel to clean nine Superfund sites associated with the company, according to a 2007 report by the Center for Public Integrity, but the bankrupt steel company wound up negotiating a deal that was worth “$9,000 at the end of the bankruptcy process, or three-tenths of a cent on the dollar.”