You could probably have stopped reading at “Vox,” to know that this article is about correcting bad “data journalism.” The Ezra Klein outlet has again used sensationalist data to construct the narrative they want.
Okay, it’s not just Vox, as they just used data from a Bloomberg article, but it’s the Vox article making the rounds this morning. The article claims that in the months immediately after President Donald Trump’s tax cuts took effect, real median wages dropped by 1.8%, and included a chart that makes the drop look even scarier.
The data used comes from PayScale’s wage index, the methodology of which was immediately called into question by several people with economic backgrounds. Scott Winship, who works for Sen. Mike Lee (R-UT) and the Joint Economic Committee, said the chart used by Vox and Bloomberg “is based on modeling of unknown validity,” and said government data found wages to be increasing.
Ernie Tedeschi, former Treasury Department economist, added that no other sources have shown data similar to the PayScale chart.
Tedeschi then shared a chart from BLS, which shows average weekly earnings for private nonfarm payroll workers increasing in 2018.
Finally, Tedeschi said there are still challenges with real wage growth, but the Vox argument is wrong.
Bobby Kogan, the “chief number cruncher” for Democrats on the Senate Budget Committee, shared a chart that shows real median wages for full-time workers being lower now than when Trump took office. This could be an actual criticism, but even this chart shows that wages have increased since the tax cuts took effect (though wages were increasing in the months prior as well).
Keep in mind, these are Democrat calculations, but they use data from the Bureau of Labor Statistics.
Those calculations show that wages dropped drastically in 2017, but began rising later in the year and into 2018.
It would be hard to say whether the tax cuts played a direct role in the increase, but the claim that they led to a decrease is out-of-line with traditionally reliable government statistics.