President Donald Trump is counting on a strong economy to carry him across the finish line in his 2020 reelection bid.
However, as Axios reports, American companies are still either hoarding cash they’re making or spending it on stock buybacks instead of plowing it back into their businesses and creating jobs.
Neil Shearing, chief economist at Capital Economics, tells Axios that companies are also reluctant to give their workers raises because it would hurt their share values, as Wall Street investors would be less willing to pay top price for shares where there is little expectation of cashing in on dividends or buybacks.
In addition to this, wealthy individuals are sitting on more wealth than they’ve ever had, even as wage growth continues to show sluggish growth.
“The top one percent of U.S. households are holding a record $303.9 billion of cash, a quantum leap from the under $15 billion they held just before the financial crisis,” Axios writes.
All of this is particularly glaring at a time when American infrastructure has continued to crumble — and it’s making it hard to find money to pay for Trump’s proposed $2 trillion infrastructure package.
“The end result is money that would previously have been split between businesses, workers and the government for projects like schools, health care and infrastructure is instead sitting in corporate accounts earning little to no return,” the report concludes.