Trump wants to "make America wealthy once again:" How wages have changed; plan's impact questioned

Former President Donald J. Trump wants to "make America wealthy once again." That was the theme for day of one The Republican National Convention. Economic policies, inflation, regulation and trade deals, were the focus of Monday's speeches, according to the GOP.

Is pay keeping up with inflation? Are Americans on a path to become wealthier? Here's what we found:

The average hourly wages of employees rose in June compared to a year ago. The Bureau of Labor Statistics found that wages grew 3.9% between June 2023 and June 2024, quicker than the rate of inflation. Although the news is beneficial to employees, many Americans still feel the burden of rising costs of living.

Wages outpace inflation

The Consumer Price Index, a measurement of the change in price of goods and services, has increased 20.8% since the beginning of the pandemic, according to Bureau of Labor Statistics. During that same period of time, average hourly earnings increased 22.3%.

"We had this period where inflation rose faster than wages, and what we've how had in the last year or so is we've seen wages growing faster than inflation," said Gerald Cohen, a professor and chief economist at the Frank H. Kenan Institute of Private Enterprise at the University of North Carolina.

It's normal for prices to rise throughout the U.S. economy each year: A small amount of inflation is a sign of a healthy economy, Bankrate reported . Small amounts of inflation can help businesses grow through hiring and increases to consumer wages.

The fed currently targets a 2% annual inflation rate.

CPI report: Inflation slowed more than expected in June as gas prices fell, rent rose

Does wage growth cover rising costs of living?

A survey from Bankrate found that between October 2022 and the end of October 2023:

• Nearly 66% of Americans experienced increased wages at some point
• About 38% said they got a pay raise
• 16% got a better-paying job

"Different people have had different experiences," Cohen said. Households in the lowest 20% income bracket spend more on housing and groceries and may have had wages increase, he said, but "they felt higher inflation more because their spending basket is weighted toward things that have gone up more in price."

See where yours ranks: The 5 states with the highest inflation and the 5 with the lowest.

Only a third of workers from the survey who had a pay increase reported that their income kept up with, or exceeded, increases in their household expenses due to inflation.

People working in retail and the food service industry are especially vulnerable to feeling the effects of inflation, experts say.

Trump's popularity and economic plan's 'potential impact'

Despite recent gains, the real income of the bottom 90% of Americans – those making less than $216,056 a year in 2023 – has "largely stagnated since the early 1970s," Jesús Fernández-Villaverde, professor of economics and director of the Penn Initiative for the Study of the Markets at the University of Pennsylvania, told USA TODAY.

That economic gulf is reflected in Trump's popularity being higher among those in the lower 90% of earners than among those 10% and above, he said.

"A walk through any affluent suburb of New York City, Chicago, Boston, or Philadelphia will reveal a sea of anti-Trump yard signs (my suburb of Haverford outside Philadelphia)," Fernández-Villaverde said. "In contrast, a walk through a lower-middle-class suburb in the same city (the south of Havertown) will identify dozens of blue Trump flags."

However, he questions whether Trump's economic plans will actually boost the economy. Since there's some evidence immigration hurts those in the lower 90% of income earners, tougher immigration limits "will probably help the income of the bottom 90%," he said.

Other ideas, like stopping outsourcing, will probably hurt most Americans, Fernández-Villaverde said. And there's only "perfunctory references" to the U.S. economy's biggest challenges such as improving worker education and creation of a "modern vocational education system," he said.

Also, "there is no attempt to explain how to get the U.S. federal budget back on track," Fernández-Villaverde said. "So, unfortunately, I am somewhat unimpressed by the document and its potential positive impact."

Are Americans wealthy? By some measures

By some measures, the U.S. is as wealthy as it's ever been. U.S. household wealth surpassed $160 trillion in the first three months of 2024, a new record, according to data from Federal Reserve. The increase is driven by factors including increased value of stocks and real estate.

When the data comes out, household wealth for the April-June 2024 period will likely be even higher than that, Cohen said.

The median net worth of U.S. families grew 37% from 2019 to 2022 to $192,900, adjusted for inflation – the largest increase in the history of the Fed's Survey of Consumer Finances, conducted every three years and released in October 2023.

Another measurement is American households' wealth relative to their income. Currently, the average household wealth comes in at more than seven times their income. That's a bit below the peak of about household wealth of eight times income in the first quarter of 2022, Cohen said.

"Equity markets declined and then we've actually seen incomes continue to grow," he said. Still, the current number is "extremely high relative to history."

But wealth and income is spread about the populace differently. So a message of making America wealthy could land differently depending on the person's experience.

"People are saying, 'prices haven't come down," Cohen said. "If incomes continue to grow faster than inflation, then that sting will probably hurt less."

Contributing: Paul Davidson

This article originally appeared on USA TODAY: Trump wants to "make America wealthy once again:" How wages have changed; plan's impact questioned