The pay increases that were supposed to come from the Trump tax law haven't shown up yet

  • Wage growth remained muted in the April jobs report.
  • It suggests that the GOP tax law has still not boosted wages in the US economy.
  • The slow pace of wage growth is a worrying sign for Republicans' 2018 midterm election fate.

The April jobs report, released Friday, showed a mixed outlook for the US labor market. But one number, in particular, stood out as a glaring weak spot that could be concerning for Republicans' electoral outlook later this year.

According to the report, average hourly earnings increased just 0.1% from a month ago and just 2.6% year-over-year, both short of expectations. That keeps wage growth stuck in its sub-3% growth trend, despite a historically low unemployment rate that fell below 4%.

Mark Hamrick, chief economist at Bankrate, said it was proof that the promised pay boost from the Republican tax law has not shown up yet.

"Wage growth was less-than-stellar, putting the fears seen earlier this year of possible overheating inflation on the back burner," Hamrick said. "This also disrupts the narrative on the potential benefits of the tax cut where more generous pay had essentially been promised."

Since the GOP tax law was implemented, Republican leaders pointed to one-time bonuses and wage-hike announcements as proof of the law's benefits for middle-class Americans. Corporate earnings and share buybacks are booming, but companies' gains don't appear to have trickled down to employees — at least yet.

The Atlanta Fed's wage growth tracker also remains below its high for the post-recession period and well below pre-financial crisis levels. 

However, the Bureau of Labor Statistics' Employment Cost Index hit a post-recession high in the first quarter of 2018. But it represented the third quarter in a row that the ECI hit a record and it remains below pre-recession levels, suggesting that the ECI is on the same trendline as it was before the tax law.

Slow wage growth presents a political problem for the GOP heading into the 2018 midterm elections, in which they are fighting to keep control of the House and Senate.

RELATED: Check out the companies that have given bonuses, increased pay since tax bill passed

21 PHOTOS
Companies that have given bonuses, increased pay since tax bill passed
See Gallery
Companies that have given bonuses, increased pay since tax bill passed

Walmart

(Photo by Scott Olson/Getty Images)

Apple Inc.

(Luke Sharrett/Bloomberg via Getty Images)

Comcast 

(Photo by Justin Sullivan/Getty Images)

Starbucks

(Photo by Zhang Peng/LightRocket via Getty Images)

American Airlines

(REUTERS/Joshua Roberts)

AT&T

(REUTERS/Rick Wilking

The Walt Disney Co.

(REUTERS/Mario Anzuoni)

Sinclair Broadcast

(Photo via Facebook)

Bank of America

(BRYAN R. SMITH/AFP/Getty Images)

Alaska Airlines

(Photo by FG/Bauer-Griffin/GC Images)

BB&T bank

(REUTERS/Jim Young)

JetBlue 

(REUTERS/Brian Snyder)

Fifth Third Bank

(REUTERS/Joe Skipper)

Nationwide

(Photo via Facebook)

PNC Financial

(Christopher Dilts/Bloomberg via Getty Images)

Southwest Airlines

(REUTERS/Lucy Nicholson)

US Bancorp

(Christopher Dilts/Bloomberg via Getty Images)

Boeing 

(REUTERS/Jim Young)

JPMorgan Chase

(Daniel Tepper/Bloomberg via Getty Images)

Wells Fargo & Co.

(Daniel Tepper/Bloomberg via Getty Images)

Home Depot

(EDUARDO MUNOZ ALVAREZ/AFP/Getty Images)

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

 

Already, polling on the tax law is looking iffy for Republicans. Most polls show that more Americans disapprove of the measure and few workers have noticed an increase in their take-home pay.

NOW WATCH: What Trump University was really like — according to a former professor

More from Business Insider: 
Even Republican voters are starting to lose faith in the GOP tax law 
1,100 economists warn that Trump is repeating one of the biggest mistakes of the Great Depression 
3 top aides to embattled EPA chief Scott Pruitt quit amid ethics investigations

SEE ALSO: Even Republican voters are starting to lose faith in the GOP tax law

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.