"Wages have risen faster in real terms during this business cycle than in any since the 1970s," according to the president. That doesn't sound credible to anyone aware of the tepid pace of wage growth. As I'll show, he is not even close. We date expansions as beginning in the first quarter after an NBER recession and ending in the last quarter before the next recession. We then calculate real wages as the ratio of total wages and salaries (BEA) to total hours worked (BLS), deflated by the headline inflation index (FRED). Figure 1 shows the overall gains in real wage per hour during the expansions under the four two-term presidents since the 1970s. We see that real wages grew 11% during the Clinton expansion, whereas they have only grown at 4.2% in the Obama expansion. Indeed, Obama's performance is even slightly worse than Bush's 4.5%.
A Whopper From the President
A Whopper From the President
A Whopper From the President
"Wages have risen faster in real terms during this business cycle than in any since the 1970s," according to the president. That doesn't sound credible to anyone aware of the tepid pace of wage growth. As I'll show, he is not even close. We date expansions as beginning in the first quarter after an NBER recession and ending in the last quarter before the next recession. We then calculate real wages as the ratio of total wages and salaries (BEA) to total hours worked (BLS), deflated by the headline inflation index (FRED). Figure 1 shows the overall gains in real wage per hour during the expansions under the four two-term presidents since the 1970s. We see that real wages grew 11% during the Clinton expansion, whereas they have only grown at 4.2% in the Obama expansion. Indeed, Obama's performance is even slightly worse than Bush's 4.5%.