Wage Growth Fastest in 8 Years As Tax Reform Takes Effect

The Labor Department released its January jobs report Friday, revealing that American workers saw their wages rise at the fastest pace in 8 years as changes to the tax code brought by the Tax Cuts and Jobs Act began to take effect.

The growth in wages was driven in part by a tight labor market, as the unemployment rate remained at 4.1 percent — the lowest level since 2000 — with the economy adding 200,000 jobs. Hiring was strongest in the construction, service, healthcare, and manufacturing sectors.

Businesses have started implementing the IRS’ new tax withholding guidelines, and those that haven’t already done so will need to make the switch by February 15. The guidelines take into account the lower tax rates and higher standard deduction included in the Tax Cuts and Jobs Act. The Treasury Department estimated that 90 percent of American workers will see their take home pay increase because of the new tax law.

Are you seeing your take home pay increase because of the new tax law? Hit Take Action to tell your reps, and share your thoughts on the economic news below!

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— Eric Revell

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