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Have wages failed to go up on Donald Trump's watch?
On the heels of a generally favorable jobs report, House Minority Leader Nancy Pelosi, D-Calif., criticized Republicans for failing to boost wages for American workers.
"November’s jobs report reveals that hard-working Americans still aren’t getting the bigger paychecks they deserve," Pelosi said in a statement that she tweeted out. "Even with full control of the House, Senate and White House, Republicans have still failed to deliver on their promise of higher wages for working families."
Her talking point is a stretch: Federal data shows wage growth since President Donald Trump took office in January, though one of the two measurements shows the gains barely outpacing inflation.
One of the two key statistics for judging this statement is median usual weekly inflation-adjusted earnings for full-time wage and salary workers age 16 years and over. This information is collected by the Bureau of Labor Statistics and is available quarterly.
For the last quarter fully under President Barack Obama -- the fourth quarter of 2016 -- this amount stood at $348.
After Trump took office, it rose to $350 in the first quarter of 2017, rose again to $354 in the second quarter, and remained the same at $354 in the third and most recent quarter.
The $6 increase may not seem like much, but it's still almost a 2 percent increase above the rate of inflation over the course of just three quarters, and that runs counter to the point Pelosi was trying to make. Here’s the full chart, which shows that earnings continued to rise after Trump took office (the three most recent quarters shaded in red).
"Generally speaking, earnings increase during economic expansions," said Chris Lafakis, a director at Moody's Analytics. "There can be some debate over how much wage growth a healthy economy should have, and who is responsible for the growth, but it can’t be debated that earnings increased under President Obama and they have continued to increase under President Trump."
We also looked for wage growth in another BLS statistic, namely average hourly earnings for all private-sector employees.
This statistic shows a slow but steady rise in wages, from $25.98 in December 2016 to $26.55 in November. (The chart below shows the final year under Obama in blue and the months so far under Trump in red):
There’s a reason that these two statistics can look a little different. The time period studied is different (hourly vs. weekly), as is the typical case studied (median vs. average). This statistic is also released every month rather than every quarter.
The most important difference, however, is that the BLS does not adjust the hourly earnings data for inflation. When adjusted for inflation, the earnings gains on Trump’s watch shrink, though they do not disappear. When Gary Burtless, a Brookings Institution economist, ran an inflation adjustment for us, he found that in 2017, average hourly earnings rose by 0.05 percent.
That’s an increase, but it’s barely outpacing inflation.
When we checked with Pelosi’s office, they cited a statement by Gary Cohn, the White House’s own National Economic Council director, who said on CNBC’s Squawk Box that "we're still not growing wages in this country."
They also said that in January 2016, House Speaker Paul Ryan, R-Wis., tweeted that "wages are stagnant" even though at the time, they were growing at least as fast as they are today.
Pelosi said, "Even with full control of the House, Senate and White House, Republicans have still failed to deliver on their promise of higher wages for working families."
The two best statistics for judging this assertion both show wage growth. One of them, however, shows growth that’s barely above inflation, meaning that Americans wouldn’t necessarily keep any more of their income in their pocket. We rate her statement Mostly False.
Nancy Pelosi, "Pelosi Statement on November Jobs Report," Dec. 8, 2017
Nancy Pelosi, tweet, Dec. 8, 2017
Federal Reserve Bank of St. Louis, median usual weekly inflation-adjusted earnings for full-time wage and salary workers age 16 years and over, accessed Dec. 11, 2017
Federal Reserve Bank of St. Louis, average hourly earnings of all private employees, seasonally adjusted, accessed Dec. 11, 2017
CBNC, "Trump advisor Gary Cohn: 'We're still not growing wages in this country,' " Dec. 8, 2017
Paul Ryan, tweet, Jan. 12, 2016
Email interview with Chris Lafakis, director at Moody's Analytics, Dec. 11, 2017
Email interview with Gary Burtless, senior fellow at the Brookings Institution, Dec. 11, 2017
Email interview with Jed Kolko, chief economist with Indeed.com, Dec. 11, 2017
Email interview with Henry Connelly, spokesman for Nancy Pelosi, Dec. 12, 2017
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Have wages failed to go up on Donald Trump's watch?
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