How We Can Finally Overcome the Affordability Crisis

Disapproval of the state of the economy is widespread today, despite many indicators improving since the start of the year. The reality is that most Americans’ financial situation deteriorated so much under the Joe Biden administration that there’s a long way to go before this affordability crisis is resolved. Fortunately, there are ways to speed up the process.

Perhaps the best illustration of where most Americans are economically today, and where they’ve been, is to look at real, meaning inflation-adjusted, average weekly earnings. This tells us not only how much the average American makes each week, but what those weekly paychecks can actually buy.

In the first eight months of the Donald Trump administration, real average weekly earnings rose about 1%—a modest improvement, to be sure, but clearly a step in the right direction. People’s incomes rose faster than prices, so they could afford a higher standard of living.

But we need some perspective to understand why people are still so deeply dissatisfied with the economy. In the four years before Trump returned to the White House, real average weekly earnings fell 4% because inflation during the Biden administration far outpaced wage growth.