When I talk about how well the economy is doing and how wages are increasing, I sometimes have a caller remark that they haven’t seen any improvement in their economic situation. That makes sense. A rising tide will lift all boats, but some boats rise faster than others. But the most recent economic numbers show that economic growth has been most beneficial to low-income workers.
An editorial in the Wall Street Journal put some of the economic numbers in perspective. During the first 11 quarters of the Trump presidency, wages for the bottom 10 percent of earners (over age 25) rose more than twice the percentage (5.9%) compared to the second term of the Obama presidency. Wage growth not only increased for low-income workers, it also increased faster for the middle class when compared to that same time (2012-2016).
Less educated workers saw the strongest gains. For example, wages rose at a 6.1 percent annual clip for workers without a high school degree and 3.9 percent for those with some college. Both of these were three times faster than during the second Obama term.
Young people were also getting big pay raises. Their wages increased on average 5.8 percent for teens, 4.4 percent for 20-24 year-olds, and 4.8 percent for 25-35 year-olds during the Trump presidency.
The editors wondered how Mayor Pete Buttigieg could claim wages aren’t keeping up with the cost-of-living. All he needs to do is look at his city of South Bend, Indiana where the average weekly earnings have grown 9.9 percent over the last year, while employers have also increased both hours and pay.
It looks to me that this rising tide is lifting all boats after all.