Trump tax cut to have little impact on US wages

Goldman Sachs analyst Dann Struyven has taken a look at the impact of minimum wage increases and the GOP tax bill on wage growth – perhaps the most important factor in maintaining one’s standard of living as price inflation creeps ever-higher (the whole “wages keeping up with inflation” thing).

Struyven concludes that short-term wage growth may be negligible outside of the leisure and hospitality industries due to various offsetting factors, while medium-to-long term wage growth is expected to be robust due to low unemployment, rising productivity and a “gradual pass-through” of extraordinary profits.

“By generating a further 0.25pp decline in the unemployment rate, the tax package should boost wage growth by around 0.1pp.”