Three Charts Showing We All Benefit from a Strong Economy
Between 2018 and February 2020, before the Covid-19 pandemic began, America saw strong economic growth — with jobs, household income and wages all increasing. This period of growth was accelerated by tax reforms that put the U.S. corporate rate in line with other countries.
Thankfully, America is now getting back to work. But we aren’t there yet. A full economic recovery is far from certain. Raising corporate income taxes now would threaten our recovery. Plus, polls show that people understand that they are hurt by higher corporate taxes. In fact, 69% of Americans think raising taxes now could lead to job losses.
Competitive corporate taxes can build a stronger economy that leads to lower unemployment, rising wages, and increased household income. To continue to build on our progress, the businesses that employ millions of Americans need tax policies that encourage investment — not tax increases that would stifle it.
Here are three charts showing how strong our economy was — and could be once again:
- Record Low Unemployment
The unemployment rate fell between 2018 and February 2020, as companies, now in stronger competitive positions, invested more in hiring. In 2019 and 2020, the unemployment rate fell to 3.5%, the lowest level since 1969.
2. Strong Wage Growth
Real (inflation-adjusted) wages grew 4.9% between 2018–2019, the fastest two-year growth rate in real earnings since 1998–1999. In comparison, there was no real wage growth during the two previous years, 2016–2017.
Critically, wage growth was greater for those on the factory floor and in non-supervisory roles than for their managers from the start of 2018 to the end of 2019, a reversal of prior trends.
3. Increased Household Income
In 2019, after years of stagnation, household income — for all families — began to grow rapidly. In fact, real (inflation-adjusted) median household income reached $68,703 in 2019, an increase of 6.8% from 2018.
We are on our way to returning to another era of strong economic growth and prosperity, but only if pro-growth policies are not stifled by huge tax increases on America’s employers.