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 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, -2.94% for the first 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.
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 the presidents.
We find that Biden has presided over both the largest wage & benefit gains, all of which are cancelled by the largest inflation since 1981 and this analysis. Biden netted negative real wage gains and the smallest real wage & benefit gains. President Trump presided over the largest real wage gains and the largest real wage & benefit gains. American’s have almost never experienced negative gains when you factor in the cost of benefits with one exception under Obama.