Which President Presided Over The Largest Inflation and Wage Gains? April 2023.
We downloaded the FRED’s Annualized Average Hourly Earnings of All Employees and the FRED’s Annualized U.S. Inflation data in order to illustrate wages, inflation, and real wages over time and by the president. Data for the FRED’s Annualized Average Hourly Earnings of All Employees only goes back to 2007.
We compared wages to inflation, the net equating to real wages. We also compared the sum of wages and benefits from employers to inflation, the net these equating to real wages and benefits.
Wages: We found that wages increased the most, on average, under Biden. Biden also had the single largest quarterly reading, edging out Trump by 0.1%.
Real Wages, what Americans felt. Once we applied inflation to these wages we found that Biden also had the worst real wage gains, -3.7% for the second quarter of 2022. Both Obama and W. Bush presided over negative real wages approaching -2%. Trump was the only president since 2007 that did not have negative real wages in his term.
Benefits also play a key role in what Americans take home – often in the form of paid time off, paternity leave, health insurance, and dental insurance. When these were included and added to the wage benefits and compared to inflation a surprising picture emerged. Americans have only experienced one negative quarter of real wages and benefits since 2007, under Obama in 2011. Employer benefit costs did not rise much in Q3 that year.
7, under Obama in 2011. Employer benefit costs did not rise much in Q3 that year.
The president that presided over the largest real wages and real wages and benefits increase was Trump. This occurred due to moderate to low inflation paired with large benefit gains and moderate wage gains. He presided over the second-largest wage and benefit gains and the second-lowest inflation. Biden presides over the largest inflation and largest wage and benefit gains, though the inflation far outstrips the gains made by wages and benefits compared to other presidents.
Finally, and new this year, we extrapolated out, or in, the total inflation and normalized it by a single term to help answer the question of which president faired the best and worst in a four-year period. Here Biden presides over the largest Wage & Benefit gains, but this is mostly due the increase in and increased cost of benefits. When it comes to real wages across a four-year term, Americans, under Biden, would see a 7.3% real pay cut. Bush was second with a 0.2% real pay cut, Obama with a 3.3% real pay raise and finally Trump with a 5.6% real pay raise.