Workers’ wages are growing faster than their bosses', narrowing the income gap, as a result of President Trump’s policies, according to Labor Secretary Eugene Scalia.
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“At the end of the Obama administration, what we saw is wage growth for the high wage earners [and] slow wage growth for the low wage earners," Scalia told FOX Business’ Maria Bartiromo in an exclusive interview at the World Economic Forum in Davos, Switzerland. "We’ve flipped that in this economy,”
Decreasing unemployment and Trump’s reduction of regulations are factors that have contributed to this low-income wage growth, according to Scalia.
Since January of 2017, when Trump was sworn into office, the unemployment rate has fallen from 4.7 percent to a 50- year low of 3.5 percent. This is 1 percentage point below the Federal Reserve’s estimated long-run natural rate of unemployment.
“As unemployment gets better all the time, wages are going to go up too. And that’s really been the goal,” Scalia said.
The low rate of unemployment has led to employers trying to bring more people into jobs and rising wages, he explained. This has led to an increase in employment among women in industries in which they have not traditionally worked such as construction and manufacturing, Scalia added.
“All boats are being lifted now, [but] there’s been concern, for example, about what we call the labor participation rate,” he said.
The labor force participation rate is a measure of all people who are of working age and either currently employed or are actively seeking a job. The people not included in this statistic are on the sidelines, but according to Scalia, are increasingly joining the labor force — especially people in the “prime” working age range of 25 to 50 years old.
Scalia was optimistic about the future. He noted that the U.S. is enjoying an extraordinary economy and the lowest rate of unemployment in 50 years, adding that the Trump administration is targeting a job growth rate of 180,000 per month in 2020.
To further expand on this success, the Department of Labor, according to Scalia, will be working with businesses to assess what skills are required of workers entering the labor market.
“They know better than I do at the Department of Labor what job skills are needed at this moment,” he said.
The Department of Labor and the Trump administration are also incentivizing employer-based training programs like apprenticeships. Four-year college degrees are not for everybody, Scalia said, and young people can come out of apprenticeship programs making an average wage of $70,000 per year.
Apprenticeships increased 56 percent from 2013 to 2018, according to the U.S. Department of Labor, and in 2018 more than 238,000 individuals entered apprenticeship programs.
At the World Economic Forum, Scalia and Trump were talking to foreign leaders about the changes they made in the U.S. that have led to these economic figures and hope they will be pursued globally, Scalia said.
“Other countries can look at the model that President Trump has set,” he said.