But there’s a down side. While wages have gone up, inflation (as measured by the consumer price index) has gone up faster.
The Bureau of Labor Statistics tallies something called real earnings, hourly and weekly earnings that take inflation into account. In January 2017, real hourly earnings were at $10.65. In July, real earnings hit $10.76. Since the tax bill was signed in December — a bill which Trump insisted would spur rapid growth in wages — inflation-adjusted hourly earnings have increased by only 0.2 percent. During Barack Obama’s second term, they increased by 3.9 percent.
The BLS generally considers year-over-year changes in real earnings. On that metric, comparing July 2017 with July 2018, real hourly earnings are down 0.2 percent according to data released Wednesday. Real weekly earnings increased slightly year-over-year — at the slowest pace since March 2017.
But that was for all employees. Looking only at production and nonsupervisory employees — that is, taking out managers, etc. — weekly earnings were down year-over-year, too.
This is somewhat abstract for most Americans. Having wages that remain even with inflation probably doesn’t feel like that much of a change. (The variation in prices by product and service within the consumer price index adds to the general gauziness of the effects.)
There’s another metric that has seen better-than-flat growth during the past year: satisfaction among Americans. In July 2017, 27 percent of Americans told Gallup they were satisfied with how things are going in the United States. In the first half of August of this year, 36 percent said they were. That continues a slow increase since the bottom of the recession, suggesting that economic issues play a role in this metric.
But there’s a remarkable bit of data buried in that overview: There’s a stark and ongoing split in perceptions of satisfaction by party. While Democrats were much more likely to say they were satisfied with how things are going in the United States in 2016, now Republicans are — to an increasing degree.
Immediately after the 2016 election, Gallup reported that perceptions of how the economy was faring flipped among both Republicans and Democrats after Trump won. The week before the election, three-quarters of Republicans said the economy was getting worse while more than half of Democrats said it was getting better. After the election? A plurality of Republicans said it was getting better and a plurality of Democrats said it was getting worse.
In November, Pew Research Center found Republicans were much more likely to expect economic conditions to be better over the next 12 months than were Democrats. What’s more, 61 percent of Republicans and Republican-leaning independents said their incomes were going up faster than inflation or holding even with it; 56 percent of Democrats said they were falling behind.
This is a central lesson to the political consideration of economic issues. Earnings are up, but spending power is down since last year. Views of how the economy is evolving, though, and the overall perception of how the country is faring, are linked to partisan politics.
When the White House argues that its policies have led to increased economic strength or wages, the perception of that argument will be linked to party registration more than actual numbers.