America hits best unemployment rate in 49 years thanks to tax cuts

America hits best unemployment rate in 49 years thanks to tax cuts
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The September jobs report released today shows a continuation of the booming labor market, with the unemployment rate falling to 3.7 percent, the lowest in 49 years. Average weekly wages rose at an impressive 3.4 percent over last year. These are the pocketbook issues that actually make a difference in the lives of voters. If Republicans can make the case that their policies are largely responsible for this increased pay and improved job prospects, they can maintain control of Congress in midterms.

So far this year, the average number of jobs created each month is 16 percent higher than last year, suggesting that the tax cuts that took effect this year are boosting the labor market. This is the sixth straight month the unemployment rate has been at or below 4 percent, the best in a half century. Black and hispanic unemployment rates hover near record lows. In addition to the unprecedented number of job opportunities, wages are increasing at their quickest pace in a decade, rising about 50 percent faster than during the second term of President Obama. But the legacy media continues to stick to its “stagnating wages” talking point.

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What makes this wage growth even more impressive is that it has coincided with a significant influx of less skilled workers into the job market. Since the 2016 election, the unemployment rate has fallen by 20 percent. Hundreds of thousands of people, who had quit looking for work altogether, have returned to the workforce to take advantage of this historic opportunity. Over the last couple years, the labor market has grown far faster than the long running trend would have suggested.

This top line wage growth figure only takes into account wages before taxes. Wages after taxes are growing even faster as tax cuts have reduced the amount of federal withholding taken from paychecks. Americans are receiving higher take home wages because of a doubled standard deduction, doubled child tax credit, and lower tax rates that took effect this year. The new 20 percent small business tax deduction is contributing to this historic labor market. This is strengthening the economic backbone of the country by allowing them to protect a fifth of their earnings from taxes and reinvest it in their operations and employees.

Consider how countless small business owners across the country, such as Guy Berkebile, a silicone producer in Pennsylvania, and Dina Rubio, a restaurant owner in Florida, are using their tax savings to raise wages and hire more workers. No wonder business and consumer sentiment are at record highs. September marked the end of the third quarter. Economic growth for this period, which will be released next month, should be boosted by this wage and job growth. In the second quarter, the economy grew by more than 4 percent. It is currently on track to grow by more than 3 percent for the first time since 2005. Given these trends, some estimates suggest annual growth will be closer to 4 percent.

While the term “economic growth” gets thrown around a lot, it is the best way to measure standard of living improvements, especially for younger and lower income Americans who have been shut out of the 40 percent stock market surge since the 2016 election. Voters will face a big choice in midterms next month. They can vote for Republicans who will build on this strong opportunity that is improving the lives of nearly all Americans. Or they can vote for Democrats who will raise taxes and throw sand in the gears of the roaring economy. The choice could not be clearer.

Alfredo Ortiz is president and CEO of the Job Creators Network.