Real pay data show Trump’s ‘blue collar boom’ is more of a bust for US workers

https://theconversation.com/real-pay-data-show-trumps-blue-collar-boom-is-more-of-a-bust-for-us-workers-in-3-charts-131264

February 7, 2020 9.58am EST

If you thought workers’ hourly pay was finally rising, think again.

At first glance, the latest data – which came out on Feb. 7 – look pretty good. They show nominal hourly earnings rose 3.1% in January from a year earlier.

But the operative word here is nominal, which means not adjusted for changes in the cost of living. Once you factor in inflation, the picture changes drastically. And far from representing a “blue collar boom” – as the president put it in his State of the Union address – the real, inflation-adjusted data show most U.S. workers have not benefited from the growing economy.

As an economist who studies wage data, I think it’s paramount that we take a step back and look at what the data really show.

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From December 2016 to September 2019, nominal wages rose 6.79% from $22.83 to $24.38. But after factoring in inflation, average wages barely budged, climbing just 0.42% in the period.

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Incorporating fringe benefits into the picture adds another wrinkle.

The inflation-adjusted or real value of fringe benefits, which include compensation that comes in the form of health insurance, retirement and bonuses, declined 1.7% in the three-year period.

Altogether, that means total real compensation slipped 0.22% from the end of 2016 to September 2019.

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