Real Wages Rebound After 25 Months of Declines, But Inflation Still Eats Away at Worker Paychecks Under Biden

Inflation-adjusted hourly wages are 2.54% lower today than when Biden took office in January 2021, with workers experiencing 25 straight months of negative real wage growth from April 2021 to April 2023.

However, in the last year, wage growth has outpaced inflation thanks to slowing price increases and a tight labor market. Real wages grew 1.2% in January and 1.1% in February.

While wage growth lagged badly behind inflation for most of Biden's term, recently wages have risen faster than prices. Inflation is down from its 9.1% peak but still up 18.5% since January 2021.

Lower-income workers have seen wages rise faster than middle and higher earners since the pandemic, narrowing income inequality, though wealth inequality has widened.

Risks remain, like high oil prices boosting inflation again, but tight labor markets and productivity growth point toward continued real wage gains ahead.