American Wage Growth Boomed Under This President

Wages in the United States have not kept up with productivity or inflation for nearly a century. This has resulted in American workers not only working longer hours for less pay than their peers in other countries but also a growing population of people who live in poverty.

Politicians and corporations have worked together since the 1970s to keep wages low and worker rights weak and flimsy. But the work to improve the life of the American employee continues, with all presidents making promises to fix it. Only some followed through on their word, however. Which ones were effective? Which ones lied? And which ones failed? These are the last 12 presidents ranked by how much American workers’ wages rose during their presidencies.

Background on Real Wages

Wage stagnation is a real issue in the United States.

In 2007, the middle class had $17, 867 less in real income than a family in the same situation in 1979, and the disparity has only grown ever since. While families might be making more money in general, the purchasing power (or the real value of that money) has not kept up with productivity, inflation, or the standard of living through the decades. In some cases, it has even fallen.

Much of this can be traced back to the economic and social policies implemented (or repealed) by Republican presidents and Congress in the 1970s.

From 1948 to 1973, the productivity of the American worker increased by 96.7%. At the same time, the real hourly compensation of the American worker also increased at around the same rate, about 91.3%.

However, after the 1970s, worker protections were repealed, tax laws were passed that benefitted the wealthy, regulations were repealed, and labor laws were gutted. From 1973 to 2013, worker productivity increased by 74.4% while the real hourly compensation increased by only 9.2%.

Cumulatively, this means that the American worker is producing 243.1% more goods per hour than someone in 1948, but their wages have only grown by 108.9%.

If the federal minimum wage had risen along with productivity, it would be $18 per hour today. It was matched to productivity in the decades before 1968, but lawmakers ended that practice, and the gap we see today began to grow.

People are worse off today than their parents and grandparents.

When we compare the growth between classes, we see that from 1979, the wages of the top 1% have grown by 138%, while the wages for the bottom 90% grew by only 15%. But the problem gets worse the closer we look.

Comparing the rich, middle-class, and poor, we see that the rich (the 95th percentile in earnings, or the top 5% of all workers) saw a 41% growth in their wages since 1979. The middle class has remained stagnant at just 6% growth, while the poor have seen their real wages decrease by 5% since 1979.

Who is to blame?

There are a number of places to point the finger when it comes to our loss in wages and economic disparity. Among them are our elected officials and CEOs.

In 1965, the average CEO earned 20 times as much as their average worker. In 2013, that rate increased to 296 times, and it has only gotten worse. This means that more and more company profits are going directly into the pockets of the rich instead of to the people who are actually doing the work and making the products.

The hostility against unionized labor and worker protections on the political right significantly damaged the power of organized labor. There is a direct inverse relationship between the percentage of the working population that is in a union and the share of company income that goes to the top 10% of richest Americans. As union membership declined since the 1960s, the amount of money going to the top 10% increased at a correlated rate. Abolishing worker protection, weak enforcement of existing regulations, blatant destruction of unions and violation of worker rights have all contributed to the disparity between the rich and the poor. The weaker the unions are in a country, the poorer the working class becomes.

Analysts and economists conclude, therefore, that income growth is faster and much more equal under Democratic administrations than under Republican Administrations.

Under Democrats, real wages increased in both the 20th and 40th percentile groups while they always fell under Republicans. Additionally, all incomes grew at higher rates in all percentiles, even during recessions like the 2008 Financial Crisis. In total, the real value of the federal minimum wage has increased by 16 cents every year under a Democratic president but fell by 6 cents every year under a Republican president.

For this list, it is important to keep in mind that any statistic and any number can be used to misinform the public. Propagandists love to misconstrue and misrepresent statistics to make the incumbent president look better and the opposition looks bad. One number does not tell the full story.

There are a few important things to keep in mind when reading this list:

1. Real wage change does not mean that everyone in the country experienced the same wage growth. If rich people see a high increase in their wages while the poor do not, the average wage will still increase.
2. Recessions usually lead to increases in real wages. Recessions lead to millions of people losing their jobs, usually the poor and working class. This means that they are not included in the calculations of average or median wages, so the average wage will actually go up even though more people are unemployed and making no money.
3. Real wages take into account the rise in inflation and are adjusted accordingly. The nominal wage might increase more in one year over another, but if inflation is also high, then that increase might not be as high as other years in real purchasing power.
4. Economists agree that presidents have very little impact on the economy by themselves. The biggest impacts come from legislation passed by Congress.
5. Economic changes are usually delayed. This means that things like unemployment, wage growth, and other economic figures will bleed into subsequent presidencies or take a few years to develop.

#12 Jimmy Carter

• Real wage change: -8%

President Carter assumed the presidency during a time when the country was reeling from the economic decisions of Nixon and Ford who had been determined, in their own words, to destroy the economy that President Johnson and President John F. Kennedy had created.

Carter attempted to fix the problems with a handful of misguided policies, but the country fell into two recessions during his presidency. This means that thanks to Nixon, the country had suffered four recessions in just ten years.

#11 Ronald Reagan

• Real wage change: -4%

Ronald Reagan was a proud anti-union president and went to great lengths to not only weaken labor protection but actively reduce the number of people in unions. He even fired thousands of striking workers as president.

Reagan passed a number of neoliberal laws that gutted regulations on corporations, lowered taxes on the wealthy, increased taxes on the poor, and weakened worker protections.

As a result, the number of homeless Americans increased dramatically and the country fell into another recession. Poverty grew significantly under Reagan to 14.1%.

#10 George W. Bush

• Real wage change: -3.9%

Bush’s top priority upon entering the Oval Office was to take advantage of the government surplus created by Clinton to fund a tax cut for the rich. He reduced the top income tax rate, lowered overall taxes for the rich, and reduced the estate tax. He also lowered the taxes on dividends and capital gains, which benefitted the rich. This drove the poverty rate in America to 12.4%.

Bush passed legislation that deregulated the financial industry. This led directly to the financial crisis in 2008, which destroyed the savings and wage growth for millions of the poorest Americans.

#9 Gerald R. Ford

• Real wage change: .7%

Ford took over the presidency after Nixon resigned and the country was already in a downward spiral of out-of-control inflation and low economic growth.

Ford blamed the American people for inflation and economic stagnation and asked them to reduce their spending instead of using his own powers to address government spending and the amount of currency in circulation. He also continued Nixon’s destruction of the strongest economy the United States had ever seen.

As a result, the country entered the worst recession since the Great Depression.

#8 Richard Nixon

• Real wage change: .75%

The economy in the early years of Nixon’s presidency was still growing due to LBJ’s presidency, but that did not last long.

Nixon entered the presidency determined to undo everything LBJ had accomplished. He was successful with much of his work. He defunded or abolished the Office of Economic Opportunity, the Model Cities Program, the Job Corps, and much more. He defeated and opposed healthcare reform and congressional Republicans successfully defeated the Family Assistance Plan.

Nixon’s presidency saw an explosion in inflation, severe food shortages, the 1973 oil crisis, and a stock market crash.

Poverty rose to 12%, unemployment rose to 5.6%, and inflation grew to 8.7%.

The economy would not recover from the destruction caused by Reagan and his successor, President Ford, until the 1980s.

#7 Joe Biden

• Real wage change: 1.2%

Biden inherited an economy that was suffering from Trump’s poor management of the COVID-19 pandemic and his policies that benefitted the wealthy at the expense of the poor. He expanded the ACA, sent stimulus checks, expanded the child tax credit, and raised SNAP benefits.

Biden repealed a number of Trump’s executive orders that weakened labor protections and union participation. He also increased the federal minimum wage for federal workers to $15 and repealed Trump’s policy of restricting union access to government office spaces.

Biden capped the price of insulin and allowed Medicare to negotiate the prices of healthcare.

Economists and political scientists agree that Biden did not do enough to reverse the course of the economy after what Trump had done to it, but new business creation still grew by 30% over levels from before the pandemic.

#6 Barack Obama

• Real wage change: 1.4%–3.2%

When Obama took office, the country was just entering the Great Recession and still reeling from the 2008 financial crisis. Unemployment was rising quickly and reached its peak in 2009.

In order to combat this, Obama increased the minimum wage, established the Affordable Care Act, and reduced the tax rate to its lowest level in more than six decades.

Obama’s presidency led to the longest period of economic growth in United States history, lasting for 128 months and ending with a recession under Trump. This economic expansion reduced unemployment to its lowest point in 50 years, around 5.3%. But due to Trump’s actions, it jumped to its highest point in over a century just two months later (around 14.7%).

#5 Bill Clinton

• Real wage change: 3.25%

Clinton took over the presidency from Reagan and inherited a massive government deficit created by Reagan and Bush.

He passed a number of laws improving healthcare and is the only modern president to create a government budget surplus.

After turning the economy around after Bush, wages grew by 6.3% under President Clinton. In 1998, real wages increased by  2.7%, which was the fastest annual real wage growth in over 20 years.

#4 John F. Kennedy

• Real wage change: 3.34%

President Kennedy entered the Oval Office during a recession — the second in just three years — and was determined to turn things around.

His series of proposals were called the New Frontier and were based on Roosevelt’s “Second Bill of Rights” presidential address and Truman’s Fair Deal policy. It included creating the Department of housing and Urban Development, federal education aid, increasing the minimum wage, sending federal aid to struggling communities, and providing healthcare to the elderly.

Kennedy loosened the government’s tight fiscal and monetary policies which stimulated the economy. He also introduced the Community Mental Health Act, the Equal Rights Amendment, the Equal Pay Act of 1963, and amendments to the Fair Labor Standards Act.

A number of additional laws and proposals were defeated by the Republican Congress.

#3 George H. W. Bush

• Real wage change: 4.3%

The economy struggled to grow under Bush due to the Reagan administration. Bush continued many of the neoliberal policies of his predecessor, but his focus abroad took attention away from fixing the wealth inequality and growing healthcare disaster at home.

The United States fell into its second recession in less than a decade under Bush, which forced him to pass the Omnibus Budget and Reconciliation Act of 1990, against the opposition of Republican leaders, which raised taxes on the rich. This bill was the foundation for the economic success of the 1990s.

#2 Lyndon B. Johnson

• Real wage change: 4.21%

President Johnson continued the economic policies and success of President Kennedy with great success.

It was President Lyndon B. Johnson who started the War on Poverty in 1964, launching a number of programs, and initiatives, and establishing a handful of new agencies to not only address poverty but help Americans find and keep jobs.

Johnson managed to lower the poverty rate in America from 20% to 12% and the economy responded with high growth. This was the last period in which the real wages of American workers would increase with productivity.

#1 Trump

• Real wage change: 5.1%

It is at this point of the list that looking beyond the numbers makes a real difference. Despite what Trump promised and bragged about, things are not as they seem.

Trump inherited the booming economy created by Obama, when real wages were growing around 3.1%. His policies erased and reversed much of this success.

However, the COVID-19 pandemic and subsequent recession muddy the waters. The pandemic itself forced many companies to lay off thousands of employees, and the recession that followed (worsened or even caused by Trump’s inadequate and slow response to the pandemic itself) caused millions more people to be fired.

The vast majority of people who lost their jobs were low-wage employees, and since they no longer had a job, they were not counted in the figures that calculated the national average wage (average wage calculations do not include the homeless or jobless, both of which increased during Trump’s presidency). Also, the COVID-19 pandemic and recession saw one of the biggest wealth transfers from the poor and middle class to the rich.

As a result, the average wage skyrocketed, resulting in a wage growth of 7.1% in Trump’s final year. Honest reporters and publications included context about these numbers, while propaganda outlets did not.

Trump’s first term as president was focused on destroying the Affordable Care Act, implementing trade protectionist policies that made products more expensive, deregulating the financial industry, intervening personally in the business and industries to enrich himself and his allies, and passing tax cuts for corporations and the rich.

In the first three years of his presidency alone, the number of people without health insurance increased by over 4.6 million. Poverty increased to 11.9% and economic inequality also increased. The wage gap for black and white men in the United States grew under Trump.

His tax cuts for corporations and the wealthy combined with huge increases in government spending contributed to the massive government deficit and federal debt we see today.

The policies of Trump led directly to a recession and the end of the economic boom created by Obama.

When he finally left office, there were three million fewer jobs than when he entered the Oval Office. This makes him the only president in modern history to leave the American economy with fewer jobs than when he began.

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