Median Usual Weekly Real Earnings, pre- and post-Covid

Comparing weekly earnings before and after the Covid pandemic, attempting to remove its effect.

The Bureau of Labor Statistics, part of the United States Department of Labor, produces data about employment and prices. Together, this data can tell us about the real, that is, inflation-adjusted situation of workers.

BLS collects this data through a survey of persons (the Current Population Survey, or CPS), not employers. The survey asks workers for earnings (including overtime, tips, and commissions) before taxes at their main job, if they hold multiple jobs.⁽¹⁾“Usual weekly earnings. Data represent earnings before taxes and other deductions and include any overtime pay, commissions, or tips usually received (at the main job in the case of multiple jobholders). … Since January 1994, respondents have been asked to identify the easiest way for them to report earnings (hourly, weekly, biweekly, twice monthly, monthly, annually, or other) and how much they usually earn in the reported time period. Earnings reported on a basis other than weekly are converted to a weekly equivalent. The term ‘usual’ is determined by each respondent’s own understanding of the term. If the respondent asks for a definition of ‘usual,’ interviewers are instructed to define the term as more than half the weeks worked during the past 4 or 5 months.” BLS. https://www.bls.gov/news.release/wkyeng.htm Each quarter, current-dollar earnings are reported, as well as inflation-adjusted earnings. BLS uses 1982-1984 dollars for this data so that dollar values from different times may be meaningfully compared. ⁽²⁾This leads to a large difference in current earnings compared to the inflation-adjusted. For example, for April 2024, the value for all workers was $1,151, which is $368 when adjusted for inflation. ⁽³⁾“Constant dollars. The Consumer Price Index for All Urban Consumers (CPI-U) is used to convert current dollars to constant (1982-84) dollars.” BLS This main statistic is presented as the median value, not the average. ⁽⁴⁾“The median is the midpoint in a given earnings distribution, with half of workers having earnings above the median and the other half having earnings below the median.” BLS

The pandemic, or rather the response to it, created a large disruption in economies. Is it possible to eliminate or reduce its effects? This is an important question, as politicians of both parties make varying claims about the economy during their administrations. There are several approaches involving the selection of time frames for comparisons, and selecting these greatly informs the outcome of analysis. ⁽⁵⁾See:
Competing Narratives on Real Wages, Incomes Under Biden

I created two periods of time: Pre-pandemic and post-recovery. I ended the first period when the trend of weekly earnings was its highest level before the pandemic. This was the quarter starting with October 2019, I started the second period when the level returned to near the pre-pandemic level, which was the quarter starting with October 2021. Graphically, this is shown in Chart 5. (Click illustrations for larger versions.)

Point A to B is the Trump administration before the pandemic. During this period, median usual weekly real earnings rose by an average of $0.91 per quarter, or 0.26%.

Point C to D is the Biden administration starting when values returned to the pre-pandemic level and continuing to the present, which is the quarter starting July 1, 2024. During this period, these earnings rose by an average of $0.82 per quarter, or 0.23%. Table 5 shows details.

The chart shows how real earnings have changed over time, through two presidential administrations and the pandemic. It shows that, after a sharp spike, real earnings have gradually returned to a more typical rate of increase. Overall, the chart shows that earnings have recovered after the pandemic, but the rate of growth in earnings during the Biden administration has been slightly slower compared to the growth during the Trump years prior to the pandemic.