The chronic wage stagnation that has hamstrung much of the American workforce could reverse under a Trump administration, according to some economists.

That would mean very different things for employers and their workers.

It's important for benefits brokers to be aware of the basic macroeconomic implications on how employers design benefits programs, the amount of cash employees will have to spend on major medical and voluntary offerings and the value of existing retirement workplace benefits.

Here is the argument.

As of October 2016, the country's unemployment rate stood at 4.9 percent, according to the Bureau of Labor Statistics.

That's not an insignificant number; for perspective, recall that 10 percent of the American population was unemployed in October 2009, at the peak of the financial crisis. As recently as January 2013, the unemployment rate was nearly 8 percent.

While the improvement has been a welcomed one, it hasn't done much for workers' take-home pay. In the years leading up to the financial crisis, wage inflation steadily slowed. Then, immediately post-crisis, wage growth took a nosedive, slowly improving since, as shown by BLS data.

Nonetheless, wage inflation today remains considerably lower than in 2006, when private sector wages increased at twice the rate as today.

Some economists predict that all could change under a President Donald Trump.

As it stands, the country is, by some measures, at full employment. Yet throughout his campaign, Trump laid out an ambitious agenda, featuring a pledge to repeal and replace the Affordable Care Act. And some of Trump's other promises – such as corporate and individual tax code reform and big investments in American infrastructure – could attract greater bipartisan support in Congress.

If delivered, those initiatives could drive economic inflation, and – more specifically, ignite wage inflation.

“We're already beginning to see wage increases,” said Anthony Brown, a partner with Mercer Investments.

“One hope is that corporate tax reform could release some animal spirits and get companies investing again,” said Brown, who recently participated in a Mercer webinar on how they election might affect employers and the workforce.

Throughout the past eight years, employer revenues have largely from low wage growth. By making fewer investments in its labor forces, large corporations and smaller businesses alike are able to pad their profits at the same time that overall economic growth falls below historical rates.

But if corporations and individual business owners pay lower taxes — a key priority of the Trump administration — and infrastructure investment encourages overall economic growth the wage pendulum may swing back toward workers, predicted Brown.

“If we get significant tax cuts and infrastructure spending, the trend we are already seeing in wage growth will likely continue,” he said.

Higher incomes pave way for greater voluntary consumption

The political and economic landscape is riddled with wild cards, meaning there's no guarantee that workers' wages will improve. But we can make some reasonable assumptions under such a scenario.

First, it would become more costly to run a business. Any economic growth may ultimately offset those costs, but the prospect of a more expensive workforce will likely encourage more employers to offer consumer-driven health plans along with a suite of voluntary options, which may help lower employer premiums on major medical health care.

Second, wage inflation could extend to health care providers, which would lead to more costly health care and, ultimately, drive up the price of workplace premiums.

Finally, more take-home pay may mean more benefits options. But even as group voluntary products enjoy competitive price points, today's voluntary consumer suffers from “wallet fatigue” as they are exposed to a wider array of voluntary options, said Patrick Toner, CEO of Customer Benefit Analytics.

Another consideration in a “rising wages” scenario: Workers' 401(k) accounts may not necessarily reflect any economic gains.

Beyond higher labor costs, rising interest rates – which the Federal Reserve uses to keep inflation in check – could slow corporate profits. That would eventually strengthen the dollar, explains Brown, meaning slower revenue growth for American exports.

“Wage inflation will push corporate profits lower, and rising interest rates will also put downward pressure on equity valuations,” said Brown. Even if the economy grows, he said, equities and 401(k)s may not benefit immediately.

And if that bears out, workers would be even further discouraged from taking 401(k) hardship loans. While such loans are relatively uncommon, they can denigrate workers' retirement savings and expose them to a costly tax bill if not repaid on time. And they're primarily driven by the consumers' needs to cover out-of-pocket medical costs.

ACA: Here to stay for at least some time

Notwithstanding Trump's campaign rhetoric, it won't be easy to repeal the ACA, and it will almost certainly not happen as quickly as the President-elect promised on the stump.

The GOP's slim Senate majority means it doesn't have enough votes to survive any Democrat filibuster of an ACA repeal.

Some provisions have drawn criticism from both sides of the aisle. But it will be difficult for Republicans to repeal such controversial items as the Cadillac Tax – which was designed as a key funding mechanism for lower-income Americans enrolled in exchanges and in Medicaid expansion – without presenting a fully functional replacement.

Health care economist Gail Wilensky writes in the Journal of the American Medical Association that Republicans in both chambers of Congress have said they won't repeal the ACA without an alternative in place to cover the 20 million Americans newly insured under the law.

“The basic interest of congressional members in political survival suggests this as well,” writes Wilensky.

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Wage inflation would give employees more to spend on voluntary

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