Despite robust economic numbers during the Trump presidency, the American public has seemed curiously unmoved by such good news as the lowest U.S. unemployment level in nearly half a century. Its enthusiasm might have been dampened by this underappreciated economic reality: The typical working American’s earnings, when properly measured, have declined during the Trump administration.
As any White House would, the president’s economic team touts positive earnings data from the Bureau of Labor Statistics that suggest rising wages and salaries. But the figures are misleading. They focus not on how much an average working person earns but on the “average earnings” of all employed people. In times of rising inequality, employees at the top pull up “average” earnings. Shift to the bureau’s earnings data for an average or “median” working person, and most of those claimed gains disappear. Another catch: The data used by the White House doesn’t account for inflation. Adjust the median earnings data for inflation, and the illusion of progress evaporates.
Let’s examine how much these technical sleights of hand distort what’s happening to people’s earnings. Using the White House’s preferred data, average earnings rose from $894.06 in January 2017 to $937.02 in August 2018. That suggests impressive gains of $42.96 weekly over the 20-month period and $30.02 weekly over the past year. But what about median earnings rather than average earnings — that is, earnings of those in the middle of the distribution?
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In Ronald Reagan’s succinct terms, average working Americans are worse off under the Trump presidency than they were under Obama’s. Yes, low unemployment is something to applaud, but there might be a good reason that so many who have jobs aren’t clapping.
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