Average Hourly Earnings, 2000-2022M02

Were wages flat during the Obama administration? Did they rise appreciably faster in the first three years of Trump (as asserted by this commentator)? 30 seconds of data retrieval reveals the answer is “no”.

Here’s the picture:

Figure 1: Real average hourly earnings in private nonfarm payroll sector, production and nonsupervisory workers, in 2020$, deflated by CPI (blue), by PCE deflator (brown), both on log scale. Source: BLS via FRED, and author’s calculations.

Annualized growth rate of real (PCE deflated) wage was about 0.6% during Obama administration. It was about a 0.6 percentage point higher during the first three years of the Trump administration, but that difference was nowhere near statistically significant. [calculated regressing first log differences on a constant and a Trump dummy, sample 2009M01-2019M12 – MDC 3:40pm]

 

32 thoughts on “Average Hourly Earnings, 2000-2022M02”

  1. pgl

    “Were wages flat during the Obama administration? Did they rise appreciably faster in the first three years of Trump (as asserted by this commentator)? 30 seconds of data retrieval reveals the answer is “no”.

    Interesting that Bruce Hall thought he had graphed real wages to support his spurious claims. As I noted even a blind squirrel looking at Bruce’s graph could have realized that what Bruce wrote was false. I have been calling him the dog chasing its own tail but then again even confused dogs know how to catch a blind squirrel.

  4. Econned

    Econbrowser
    Analysis of current economic conditions and policy

    Should be changed to

    Econbrowser
    Meaningless analysis by Menzie’s current ego conditions

    1. pgl

      Did you read Bruce Hall’s absurd rant? If not – you do not get to comment.

      If you had read his nonsense – you could have objected to his garbage but you didn’t.

      Oh there is door #3 – you agree with Bruce’s stupid rants. That would be your style.

    2. Macroduck

      You, Johnny and rsm => Larry, Curly and Moe.

      Anonymous, Johnny and Bruce => Haw Haw and Tokyo Rose.

      Congratulations Johnny! Nominated on two categories!

      1. Anonymous

        i identify with stan laurel.

        you know the ‘guy’ who sees the ‘smart guys’ making mistakes and gets his point across after the damage.

    3. baffling

      more uninformed and unsupported commentary from econned. drive by trolling. typical. and yet he denies doing so.

  5. JohnH

    Fun with numbers!

    Here’s the data for real average hourly earnings of private sector employees in 1982-84 dollars from the BLS.
    https://www.bls.gov/opub/ted/2021/real-average-hourly-earnings-down-1-9-percent-from-november-2020-to-november-2021.htm
    (Current data is in the most recent BLS release.)

    January 2009 -10.37
    January 2017 – 10.68
    January 2020 – 10.99
    January 2021 – 11.41
    February 2022 – 11.11

    2009-2017 growth under Obama – 3.0% total ; 0.37% per year
    2017-2020 growth under Trump (1st 3 years) 2.9% total; 0.96% per year
    2017- 2021 growth under Trump (4 years) 6.8% total; 1.7% per year
    2021- Feb 2022 growth under Biden (1+ years) -2.6%

    Now people can spin this data any way they want. But the facts don’t look particularly good to me, since I don’t much care for Trump (or Democrats, either, for that matter.) But they do show that annual wage growth under Obama, while not negative, was very pathetic. By comparison, growth under Trump was clearly better both on an annualized three year basis and on a four year basis. Finally, real wages have grown only 1% since the beginning of the pandemic, and threaten to be obliterated by inflation in short order.

    The liberal mantra that claims that facts have a liberal bias does not always hold true. However, when you hear someone making that claim, you can be sure of their political bias and that they are picking, choosing, and spinning the data…which is far from the University of Wisconsin’s standard of continual and fearless sifting and winnowing by which alone the truth can be found.

    1. pgl

      “Now people can spin this data any way they want.”

      This is what you do 24/7. Let’s see. Busb43 left Obama with the Great Recession. Obama left Trump with a strong economy. OK – it took Trump 3 years up to totally screw it up.

    1. pgl

      Do you know why the dude named Lucy refuses to date you? You have ugly nits all over your face. Now if you stopped picking at it, maybe it will heal.

  7. Andrew

    Two points.

    1. The job market under late-Obama and Trump-until-Covid was great. That had nothing to do with the occupant of the White House.

    2. The fall in wages between 2010 and 2012, just like the rise in 2008, was compositional. It rose in 2008 because lower-income earners were losing their jobs during the financial crisis. It fell in the years afterward because those lower-earning workers got their jobs back. Looking at wages could be misleading.

    3. The economy could have been much better during the first few Obama years if there had been enough fiscal stimulus, just like there was 2020-2021. Yes, we would have risked inflation as today. But it didn’t have to be as bad as it was. Last I remember, Republicans were lock-step opposed to anything Obama proposed, and McConnell outright said he wanted Obama to fail. Meanwhile, in 2020, Democrats were pushing Republicans to vote for more stimulus even though it would (and very likely did) help the incumbent.

    2. JohnH

      Obamabots tend to forget that Obama and Pelosi were both deficit hawks. Republicans were opportunistically and hypocritically opposed to increased deficits. But Obama also supported austerity starting in 2011. Let’s not try to sugarcoat Obama’s behavior by blaming it all on Republicans.

      1. Paul Mathis

        Wrong JohnH

        Obama supported austerity starting in 2009.

        In April 2009, before the Great Recession in the U.S. had even hit bottom and as nearly 700,000 jobs were being lost that month alone—with over a million more jobs to be lost until the unemployment rate finally hit its peak six months later—President Obama was telling Americans that the federal government had to “tighten its belt” and impose “fiscal discipline” to end the economic crisis:
        “We came into office facing a budget deficit of $1.3 trillion for this year alone, and the cost of confronting our economic crisis is high. . . But we can’t settle for a future of rising deficits and debt that our children can’t pay. All across America, families are tightening their belts and making hard choices. Now, Washington must show that same sense of responsibility.” President’s Weekly Address, 4/25/09.

        Then Obama and Pelosi passed the Paygo statute that required all new spending to be off-set with tax increases or spending cuts to prevent any increase of the deficit. Pure insanity, but neither one has changed their view of deficit spending even after the worst recession since WWII.

      2. pgl

        “Obamabots tend to forget that Obama and Pelosi were both deficit hawks.”

        This from the troll who kept telling us that Cameron’s fiscal austerity led to higher UK real wages even as Simon Wren Lewis kept documenting how much real wages fell. JohnH – you are either the dumbest troll ever or a serial liar.

        1. JohnH

          Total BS from pgl…his standard fare. Never did I support Cameron, and pgl can find nothing to show that I ever did.

          But there was a period in the mid-2010s when economists were howling about how hard deflation would be on workers. But instead, in the UK there was virtually no inflation, labor participation reached all time highs, and real wages actually rose. I thought economists should take note since the confluence of that set of facts seemed to defy the basic tenets of economists’ faith.

          Instead of addressing the issue, pgl just made up some BS about my politics.

      3. AndrewG

        I think this is true. Obama in particular was too focused on keeping the stimulus package under the magic $1T mark.

        I still don’t think this lets Republicans off the hook. Obama proposed a second stimulus (which was quite modest, $400B) and they simply laughed at him.

        1. pgl

          Christina Romer wanted to go much bigger but alas Lawrence Summers wanted to mansplain her about some sort of political reality. Obama should have told Summers to shut up and let Romer speak.

    3. Ivan

      #2 is a very important point that doesn’t get enough press. Recessions tend to kill more low paying jobs. So as unemployment goes up the average hourly pay also goes up. Then all of those jobs get filled again but that will not give the average wages a push up. Only after it gets hard to fill even the lower paying jobs do you get a sustainable push up in average wages. The next year will be interesting since we are now down to unemployment rates similar to before Covid and employers have still not filled all the jobs that were lost.

    4. Barkley Rosser

      Andrew,

      A way of putting this all together is that once we got past the immediate adjustment from the Great Recession the Obama administration change in wages basically resembled what happened during the Trump administration up until the pandemic hit. This is in spite of the fact that Trump engaged in a deficit increasing tax cut that never was supported by a majority of the US people and that appears to have done nothing to further stimulate wage growth. But then what did one expect from a tax cut totally aimed at high income people?

  8. rsm

    Aw, if Mengzi tried hard enough, don’t you think he could find a statistical test that would support the opposite of his politically hacky story?

    What is the error in the wage statistics? Why would survey respondents lie, amirite? If over 50% of your survey sample refuses to participate, what kind of noise are you measuring?

    1. pgl

      You know – I need to try harder to complete my laser gun that I will use to zap your worthless being into oblivion.

    2. Menzie Chinn Post author

      rsm: The data reported are from the CES (establishment survey). The response rate there is not “50%”. I think you are referring to the household survey. That’s partly why I don’t put heavy reliance on those numbers.

      Do you even have the slightest inkling about the data you are disparaging?

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