Series 28 | Part 2: How Trickle-Down Harms Workers

Instead of providing a fair wage, Donald Trump proposes growing the economy by giving tax breaks to wealthy individuals and large corporations so that they move their business back to the United States and hire more Americans. This use of trickle-down economics only works if wealthy individuals and corporations use these tax savings to employ new workers. Large corporations invest billions in automation instead of giving billions to their employees and communities. Tax cuts to wealthy individuals only generate jobs if those individuals decide to create a business or incur additional expenses. Many wealthy individuals invest in assets like homes, cars, tuition, and stock portfolios. These transactions are between wealthy individuals and wealthy institutions. Instead of flowing through the economy and potentially generating millions of jobs, the money gets stuck there.

This method mostly affects retail employees, social assistance workers, and restaurant employees because the majority of minimum wage and low-wage jobs are concentrated in these areas. Underpayment and nonpayment of wages is most common in these industries. The downward pressure on wages will lead to lower pay for salaried positions.

Providing a fair wage to low-income and middle-class workers will grow the economy. Workers and their families incur expenses, and additional transactions of goods and and services creates jobs. This money changes hands numerous times and doesn’t get stuck in non-financial assets like homes and cars because most low-income and middle-class workers can’t afford to purchase these items outright. The money never leaves the economy because it’s not extra. They don’t have enough liquidity to save it.

To provide a fair wage, there needs to be an increase in wages. Most individuals and families have necessary expenses like food, rent, utilities, gasoline, basic medicine, and other expenses that come up. Therefore, an increase in wages will flow right back into the economy.

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