Barack Obama likes to claim he presided over an economic recovery, and while he was indeed president while a recovery occurred, that doesn’t change the fact that it was the weakest recovery since the end of WWII.
While the unemployment rate fell under Obama’s watch, that was accompanied by sluggish growth, with Obama being the only President in modern American history to never see even a year of 3% economic growth. Worst of all for the typical American, the median household income declined 5% during that same time period.
Joe Biden recently said in March that he wished Obama did more to cut taxes for the middle class – and given the benefits of the Trump tax cuts, it’s not hard to see why. While incomes declined under Obama, bringing them down to where they were back in 2000, they’re finally trending up once again, and it’s all thanks to the Trump economy.
According to CNBC, wages rose 2.9% in August (on an annualized basis), which marked the fastest level of growth since 2009. Average hourly earnings increased 10 cents for the month to $27.16.
So real wages are rising, inflation is cooling, and initial jobless claims are at their lowest level in like half a decade.
Seems good! Maybe the Fed should just let things play out. https://t.co/ATGmE517o9
— Joe Weisenthal (@TheStalwart) September 13, 2018
The best news from this morning’s #jobsreport: “Long-awaited wage growth posted a recovery high in August while payroll gains beat expectations.” More Americans have jobs and wages are rising. Really good news. https://t.co/seuC2W8Mb8
— Carlos Curbelo (@carloslcurbelo) September 7, 2018
Another reversal from the Obama economy has come in the form of a resurgence in blue collar jobs. Despite a decades long decline, the American manufacturing sector is finally being made great again. Over 350,000 manufacturing jobs have been added since Trump took office.
Remember when Obama tried to ridicule Trump over manufacturing jobs? Here’s what Obama said:
“Well, how exactly are you going to do that? What exactly are you going to do? There’s no answer to it,” Obama said, referring to Trump’s campaign rhetoric.
“He just says, ‘Well, I’m going to negotiate a better deal.’ Well, what, how exactly are you going to negotiate that? What magic wand do you have? And, usually, the answer is he doesn’t have an answer.”
Well guess what, Obama? Abracadabra!
If Donald Trump’s Counsel of Economic Advisers is correct, wage gains are actually being underrepresented in the statistics. They cite a number of factors of why they believe wage growth is being understated, which includes the official statistics:
- Not taking into account fringe benefits.
- Using the CPI to adjust for inflation as opposed to other inflation metrics. The CPI tends to overstate inflation, which would make inflation adjusted wage gains falsely appear smaller.
- Not accounting for the fact that tax rates are lower, meaning a larger percentage of wages are kept.
The CEA was noting that in refuting claims that real wages rose 0% during President Trump’s first year in office – and found that they rose by 1.4% if you account for those other variables. If wages are expected to rise 3% this year, that means we could expect them to rise by 4.4% overall – which is something everyone can celebrate.