02 September 2020

How to buy votes when you're president

"The U.S. government will implement an across-the-board payroll tax deferral for about 1.3 million federal employees starting in mid-September, forcing some workers to take a temporary financial boost now that they likely will have to repay next year.

The policy, confirmed Monday by a senior administration official, comes in response to a widely panned policy directive issued by President Trump earlier in August. Unions have sharply criticized the government’s decision, fearing federal workers may not have a choice in whether to take the deferral — resulting in them receiving smaller paychecks in 2021 until the past-due taxes are paid off.

Trump’s order specifically targets the 6.2 percent tax that employers deduct from their workers’ wages so the government can fund Social Security. His directive postpones payment of those taxes until January, at which point employers are required to start collecting back what is owed, perhaps by withholding double the amount they usually take until May. The deferral applies only to people who earn up to $4,000 on a biweekly basis, and less than $104,000 annually.

"See - your paycheck just got bigger.  You're welcome.  Vote for me. "

Oh, also, if you see reports of "wages going up" recently... that's bullshit too, as explained by Bloomberg:

Measures of U.S. wage growth which have surged despite staggering levels of unemployment during the coronavirus pandemic reflect disproportionate job losses among low-income workers, Federal Reserve Bank of San Francisco President Mary Daly argues in a new study that she co-authored.

Although the unemployment rate jumped to a multi-decade record 14.7% in April, median weekly earnings increased by more than 10% in the second quarter over the same period last year. This rise does not mean wages are increasing, but is occurring as more low-income workers than higher-wage earners lost their jobs during the pandemic. That left an overall pool of higher-earning workers from which to calculate the data, Erin Crust, Mary Daly and Bart Hobijn wrote in an economic letter published Monday on the San Francisco Fed’s website.

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