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Under Trump, Americans Have Seen Their Best Wage Growth In 40 Years


Many on the left refuse to admit President Trump’s populist policies have provided massive benefits to working-class Americans. Matthew Yglesias argued at Vox that Trump’s refusal to endorse a federal $15 per hour minimum wage proves Trump has abandoned populist ideals. Progressives claim the Trump economy helps billionaires, not workers, and snidely dismiss his outreach to minorities.

Yet, during the first three years of the Trump presidency, wage growth was off the charts, especially for low-income workers and African Americans. The third-quarter economic data released Thursday confirm once again that Trump is on the job for U.S. workers.

The Biden campaign has tried to tie COVID-linked economic devastation to Trump’s leadership. The new third-quarter economic data once again shows that’s wrong. The total number of U.S. wage earners increased more than 5 percent in that period, and the third-quarter rebound for African Americans occurred at a 17 percent faster rate than for wage earners as a whole.

Trump campaigned on exiting the China-centric Trans-Pacific Partnership and renegotiating North American Free Trade Agreement (NAFTA). Trump claimed his tax and trade policies would benefit American workers.

Even though evidence shows they are highly effective, Trump’s economic ideas have consistently underwhelmed pundits. Democrats hated his tax cuts. Liberals predicted a worldwide economic crisis if he was elected in 2016 and scoffed at Trump’s “middle class miracle.” Leading up to the 2016 election, economists including eight Nobel laureates derided his economic ignorance and called his proposals “magical thinking.”

Yet the economic results have validated Trump’s economic leadership. He used tariffs as a bullwhip to punish predatory, job-killing trade practices. The United States-Mexico-Canada Agreement (USMCA) sprang from the ashes of NAFTA. Tax cuts for workers and corporations accompanied massive deregulation and a robust energy policy. Prior to COVID lockdowns, despite Democrat opposition to all things Trump, the economy was adding millions of jobs and wages were soaring.

This Is Trump’s Doing, Not Obama’s

In rare moments when liberals admit a few not-so-terrible things have happened during Trump’s presidency, they credit Trump’s success to the “continuation of a trend” President Barack Obama began. Perhaps Trump did achieve the lowest African American unemployment figures in history, they say, but he was the beneficiary of Obama’s legacy, when most of the economic hope and change really happened. Nothing could be further from the truth.

Over the past 40 years, the inflation-adjusted growth trend for the U.S. median weekly wage has been $4.05 per quarter. During the first three years of the Trump administration, it was a staggering $6.90 per quarter.* During the Obama years, median wages grew at the anemic rate of $3.20 per quarter.

But what if we cherry pick the last (best) three years of the Obama era? We see growth of $5.08, more than a dollar higher than the historic trend. But that is the lone bright pixel in an otherwise dreary picture. And Trump has bested that by a mile.

The story grows quite interesting when we focus on wage earners in lower brackets. According to data from the U.S. Bureau of Labor Statistics, the 20-year growth trend for the 10th percentile weekly wage was $2.03 per quarter. For Trump’s first three years, wage growth was $4.95.

What about in the Obama era? Even cherry picking Obama’s last three years and ignoring the 2009 recession leaves us with growth of $1.68 per quarter, well below both the historic trend and Trump’s. Table 1 shows striking wage growth under Trump, a reversal of prior patterns, not a continuation, especially in the lowest wage brackets.

Link to U.S. Bureau of Labor Statistics data.

Trump Benefited Black Americans More Than Obama Did

During the final presidential debate, President Trump boldly stated he has done more for black Americans than any president since Abraham Lincoln. And he is not so sure Abe did better. While liberals fact-checked his hyperbole, we may employ the quaintly anachronistic approach of using data and logic. The Obama era proved dispiriting for many African American wage earners. The first three years of the Trump administration were a comparative godsend.

Obama oversaw the addition of 2.1 million African American wage earners during eight years in office, about 250,000 per year. Table 2 reveals the tepid results in terms of wage growth. Trump oversaw the addition of 1.3 million African American wage earners in his first three years, more than 400,000 per year. Excellent wage growth occurred across the spectrum. The results for the 10th and 25th percentiles were remarkable.

The 10th percentile U.S. weekly wage grew by $3.25 per quarter for African Americans during Trump’s first three years, nearly double the historic rate of $1.65. The best Obama growth rate was only $1.68. Perhaps having a businessman at the helm of the world’s largest economy is not such a bad idea. Will any deniers admit they were wrong?

Link to U.S. Bureau of Labor Statistics data.

Americans remember the struggle to find work and make ends meet that many experienced during the Obama years. Pollster John Zogby found in August that Trump’s approval rating had reached a record high (for a Republican president in this century) of 36 percent among African Americans. Last week, Rasmussen reported Trump’s approval in his daily tracking pool had spiked up to 46 percent among African Americans.

Not all voters prioritize economic benefits, but many do. Freedom and autonomy play an integral part in the pursuit of happiness, and no recent president has done more than Trump to improve the plight of the working poor. Far better than misleading promises about future increases to the minimum wage, Trump’s policies delivered extra dollars to tens of millions of paychecks. Workers appreciate real wage growth. Each paycheck stretches further. Providing for loved ones becomes much easier.

Since African American wage earners reaped significantly higher economic rewards thanks to Trump than ever before, he has been confidently asking for their votes. The number willing to take him up on that offer could prove decisive. Trump-economy deniers may be in for a surprise when they learn just how many working-class Americans vote their pocket books this year.

*Note about COVID outliers. Thoughtful readers will wonder why the data from 2020 were discarded. As the economy shed 13 million wage earners due to COVID lockdowns, the median wage soared from $936 to $1,002 per week. Line workers were laid off, not managers. Discarding the COVID outlier quarters avoids a huge upward bias in the Trump-era growth rates.