The Trump administration Wednesday disputed government data showing that workers’ wages have remained largely stagnant despite low unemployment and robust economic growth.
Government statistics have shown wage growth for American workers has been largely flat over the past year, inching up by about 0.1 percent. That finding has become a key criticism of President Trump's economic record, cited by Democrats to back their argument that the economy is not as healthy as the president claims.
But in a report released Wednesday, the White House Council of Economic Advisers said workers’ wages have increased by about 1.4 percent over the past year, contradicting official statistics showing they have barely budged.
Trump has claimed on Twitter that “in many ways this is the greatest economy in the HISTORY of America,” drawing scorn from Democratic members of Congress who say the president is ignoring a flattening in take-home pay for most workers.
"The reality is that wages for workers in the middle class remain flat and the income inequality gap continues to widen,” Senate Minority Leader Charles E. Schumer (D-N.Y.) said last month.
The Bureau of Labor Statistics found that, on a monthly basis, real hourly adjusted earnings — a measure that accounts for inflation — fell by 0.2 percent in July as tepid wage growth was overtaken by higher costs, including higher energy prices.
But the Trump administration said those statistics are misleading, in part because they ignore bonuses and increases in health-care benefits. The official BLS statistics also fail to account for the Republican tax law passed last fall, as well as demographic trends that are quickly pushing older workers with higher earnings into retirement, the Council of Economic Advisers said.
"Wage gains are 10 to over 20 times more than the headline measures, although 10 to 20 times is kind of an exaggerated way to say it because you're starting with a really, really low number,” CEA Chairman Kevin Hassett told reporters on a press call Wednesday morning.
Two Obama administration economic officials said that Hassett's approach was largely reasonable, while arguing it did not dramatically change the previous understanding of wage stagnation in the United States.
Jason Furman, who served as President Barack Obama's top economic adviser, questioned the CEA's use of after-tax income in calculating wage growth, noting that applying the same methodology would also classify an expansion in federal health benefits as an increase in wages.
Others pointed out that even under the CEA's rosier estimates, the pace of wage growth has still stalled since 2015, declining slightly from Obama's administration to Trump's.
"While obviously it's in the Trump administration's interest to show wage growth as strong as possible, each of these adjustments they make are reasonable and defensible,” said Ernie Tedeschi, who served as an economist in Obama's Treasury Department. “But even under their assumptions, real wage growth has weakened since late 2015, which is remarkable given how much further unemployment has fallen since then."