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As long-time NYC sports news talking head Warner Wolf used to say, "Lets go to the videotape..."
In the 19 months since Trump was sworn into office, inflation is up 4.3%. But average weekly earnings are up even more: up 5.6%. Workers are getting ahead—finally.
In the 48 months under Biden and Democrats, total inflation was up a whopping 21.4%, the worst in 40 years. Worse, average weekly earnings were only up 16.66%. Workers fell behind. But now Democrats want to lecture about “affordability”?!?! They are the ones who made things unaffordable!
Let's look at a graph of inflation as measured by the Consumer Price Index (in red) and Average Weekly Earnings (in green), both centered on Jan 2021 when Biden was sworn in.
Any period in which the red line is above the green line is one when price increases are higher than average weekly earnings growth. It's easy to see that workers started falling behind almost as soon as Biden was sworn in. You can also see that the gap is narrowing, especially since Jan 2025 with the dawn of Trump 2.0.
But...
1 ) Inflation is cumulative. We are still living with the aftermath of Biden's (or whoever was actually at the wheel) disastrous 21.4% total inflation. So while the gap is narrowing, it's not even close to closed yet. That's why the American electorate says they are hurting. It's going to take a massive increase in earnings and/or decrease in prices to recover from that abomination.
2a) Let's re-center the graph on Jan 2025 when Trump 2.0 started:
Over the 19 months, Average Weekly Earnings have grown faster than CPI—the green line is above the red. That's good. So, the gap is finally narrowing... But let's focus on the last couple of months.
2b ) This is the Percent Change (month over month) in Average Weekly Earnings and CPI,
It shows that in March, April and May of this year, CPI went up faster than Average Weekly Earnings (AWE). (The red line is above the green.) And after a respite in June, July was another month where CPI grew faster than Average Weekly Earnings—not by much (CPI up 0.073% month over month while AWE was up 0.053%), but for another month workers fell behind. That makes 4 of the last 5 months. So while overall things are still better than Biden, that could change, and the recent trend is not good.
Anyway, as midterms approach, keep in mind that when voters are saying they are hurting, they aren't wrong. That doesn't make the Democrats or Socialists right. But it's easy to understand how people might be in a sour mood.
Discussion (150)
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Good use of data to support the discussion. Thanks!
I recommend this post for promotion to the Main Feed ASAP.
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Happened in his first term, too, until CoViD.
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Yep. And by quite a bit too. I'd have to dig out the numbers, but its something like workers got farther ahead in his 3 years before Covid than they did in Clinton's 8.
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This is important. It should be discussed every time a new inflation number is announced.
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not assigning homework, but it might be case that for some cohorts inflation is ahead of wage growth. I am thinking particularly about "grievance voters". This are young and online people and probably working laptop jobs in government or in HR. They assumed that getting that fem studies degree would give them a $150K/year work-from-home job. They assumed that Uncle Sam would continue to send stimmy checks, student loans would not need to be paid, and rent paying was optional (none show up in CPI or wage metrics). For that group, reality has hit them hard and they are online posting about the doom. There is another group of dudes pulling wires in data centers that are working 70 hours a week and making $250K/year and are too busy to post online. The oil patch guys are too busy. The current prosperity is in patches and the people in the sweet spot are busy, while those on the outside are whinging. It might also be the case that a lot of childless women are mid-career and not satisfied with the prospect of 15 more years of grinding spreadsheets. I don't think that will show in the economic data.
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