Affordability: the powerful logic to increase wages across the spectrum
I am an amateur economist. I've written a blog for 15 years, Economics Without Greed, Part Two. I am sending a letter to my elected representatives and to other public leaders and candidates.
Affordability is the main concern. Your job as a public servant is to restore a middle class and alleviate the inequalities of income and wealth. I’ll run you through some studies that show that more than 40% of Americans are living on the edge.
The economy grows, but incomes stagger along. This graph displays the consequences of uneven growth:
This is the report of February 2026 from the head economist at the Economic Policy Institute, Josh Bivens. As a result of such unequal growth, the entire society has suffered -- the quality of life for all is bouncing on rock bottom.
A little over 40% of Americans worry or feel anxious and are insecure in their finances. The study “Making Ends Meet”, November 2024, from the Consumer Financial Protection Bureau, shows that 42.3% of adults say that after 30 days they could not pay normal expenses if they lost their main source of income. They have little savings. The same report says that 80% of adults have credit cards, but half have “revolving” accounts; they do not pay off the entire monthly bill. That would be 40% of U.S. adults not paying off the bill, and 20% more without credit cards.
40%, 41%, 42%, 43% --- Live in Hardship or Poverty
Some 41.5% of households have incomes below 200% of the Official Poverty Level which is well under the survival budget of several reports on income fragility (U.S. Census, Poverty in the United States, 2024, page 12, and see here, Figure 9). The Federal Reserve asks in their report “Economic Well-Being of U.S. Households” what is the maximum emergency expense you could afford? The maximum amount for 52% of U.S. adults is $2,000. That’s 140 million adults without adequate reserves. The Federal Reserve’s report Flow of Funds states that $181 trillion is the “total household net worth”, and that would be about $715,000 per adult (assets minus liabilities to determine net worth). It should sound absolutely bizarre that the average net worth per adult is over $700,000, but half can’t afford an emergency expense of $2,000. Similarly, the total national yearly income is above $25.6 trillion, and that is very close to $100,000 per year per adult.
What are you going to do about it? Will you pay attention to the gravity of the problem? Most economists do not, in my opinion, and most politicians ignore it. I’d like to see a shift in awareness and concern. I’ll pass through various statistics in this essay, but I’m heading for the main goal of describing the pervasive personal and financial insecurity of close to a majority of U.S. citizens.
Employment Growth
Over the past few days I've looked at the job creation rate of Trump's first 12 months, 2025, compared with Biden's rate during his last 3 years.
During Trump's twelve month February 2025 to February 2026 the average monthly
growth of new employment
was 13,000/month.
The rate for 2024 was 89,000/month. -- 6.9 times the rate of 2025.
The rate for 2023 was 181,000/month. -- 13.9 times the rate of 2025.
The rate for 2022 was 353,000/month. -- 29 times the rate of 2025. The unemployment rate dropped from 6.2% to 3.9% during 2022. If the federal government had not fired workers at a rate of 27,000 per month, the average
job gain would have been 40,000/month, still less than half the 2024 rate.
(https://www.bls.gov/charts/employment-situation/otm-employment-change-by-industry-confidence-intervals.htm)
(https://data.bls.gov/toppicks?survey=ce)
(also see here for a graphic with accompanying tables)
Trump fired 324,000 federal employees in the past 12 months (Fed Fred: All Employees, Federal), that amounts to an average of 27,000/month. If he had fired no federal workers his average monthly job creation would still between 14% and 55% the rate of the last 3 Biden years, a very bad record.
Biden's years saw the U3 unemployment rate drop from 6.4% to 3.2% and rise to 4.0%.
During Trump's 12 months in 2025 the unemployment rate rose to 4.3%.
Fortunately, the employment to population rate for ages 25 to 54, prime working years, is relatively high in both presidents’ years. Jared Bernstein's yearly assessment provides more detail about the state of the job market. And this report from the Economic Policy Institute shows wage gains even more clearly. Economist Dean Baker compares the Biden years with year 2025 under Trump, and he speculates on the long-term consequences of Trump's cancelation of EV cars and clean energy, mass deportation, and tariffs.
During Trump's 11 months, January to December, about 75% of new jobs have been lower-paying nonsupervisory jobs. The Job Quality Index at NYU Buffalo (November 2025, page 2) shows the portion of good to not-good jobs -- new full-time year-round jobs. The "nonsupervisory worker" entails 82% of all U.S. workers, 110 million.
Nonsupervisory workers' average yearly income is $56,020; the 44% (50 million) who earn higher than average earn $76,560, and the 56% (60 million) who earn lower than average make $38,787 yearly. Three of four new jobs in 2025 fell into the lower 56% group.
Low paying work is the worst, most enormous drag on the U.S. standard of living since 1973.
The RAND Corporation report of 2025:
New information reveals an ever deeper shift in income distribution.
The RAND Corporation states, to quote its conclusion:
" . . . if [in 2023] we had
the income distribution from 1975, the majority of workers (the bottom 90 percent by income)
would have made an additional $3.9 trillion dollars in 2023."
Divide the $3.9 trillion by 90% of the total employment of 2023; 90% equals 141 million workers.
This yields $24,856 additional income to all 141 million workers, the lower-paid 90%. Probably all part-time workers double their incomes in this imagined scenario.
A married couple would earn double the added $24,856, adding $49,712 to their income in 2023.
The median household would stand at $130,322 instead of $80,610 in 2023, in nominal or 2022 dollars. An additional $49,712 would be an income of $130,322, a 61% increase of annual income.
Think about it. And think again. What does it tell you about the distribution of national income?
The distribution ratio has shifted for the worse! And the consequences are 40% of the nation lives with worrisome hardship or poverty.
---------------------- basically this is the story the public needs to absorb.
" Cumulatively, the gap between what
workers from 1975 to 2023 earned and what they would have earned with the counterfactual
income distribution amounts to $79 trillion (in 2023 dollars). Compared to the $47 trillion from
the 2020 study, the additional $32 trillion dollars comes from extending the time-period by five
years, inflating from 2018 to 2023, and additional growth in inequality."
We can divide the $79 trillion over 48 years among the 121 million households in the lower 90%, and each would accrue about $650,000 per household. Our neoliberal economy has been robbing workers is the obvious conclusion. Furthermore, in the past five years, paraphrasing, asset valuations or savings have increased at a nearly unbelievable enormous rate -- benefitting the wealthiest.
The RAND author, Carter Price, is interviewed at Pitchfork Economics, March 24, 2026, explaining his research.
Wage Growth Petrified for 50 Years
In many places on this blog I've mentioned the following:
The "average weekly earnings for production and nonsupervisory workers" were higher in 1973
than in 2025 (see the bls graph here: https://data.bls.gov/timeseries/CES0500000031)
notwithstanding the 144% growth of the economy (adjusted for inflation and per capita, -- Fed Fred: Real Domestic Product Per Capita) That is zero growth in wages for 82% of workers, and 144% growth for the economy. Something is wrong. The word "stagnation", or the phrase "wage stagnation" does not capture the ugly reality.
Prices go up, families strain to meet expenses, most people cannot save.
I could cite the slow growth of the "median worker" weekly earnings, or "median household income" or "median nominal weekly earnings: men" -- all options indicate extremely low growth or even negative growth in the case of working men.
The median age for buying a first home is now 40 years old, the highest on record.
Labor’s share of the national income has dropped to its lowest since 1947 (and see Fed Fred graph here).
Capital’s share of income has risen from 32.2% to 41.7, up 9.5%, since 1987. Concurrently Labor’s share of income has dropped from 67.8% to 58.3%, a drop of 9.5% (see here and here). And 9.5% of income is $2.77 trillion that once went to workers and now goes to financiers, shareholders and speculators. That would be a loss of $25,650 per household for all among the lower 80% of U.S. earners.
I emphasize that a fairer distribution was achieved in the past, and it is more than possible for the future, it is imperative. Economist Thomas Palley's book "Neoliberalism and the Road to Inequality and Stagnation", 2023, makes this same argument; read an excellent review here.
Making Ends Meet
The survey "Making Ends Meet", November 2024, created by the Consumer Financial Protection
Bureau, shows that 42.3% of respondents do not have sufficient savings to pay for normal expenses for more than 30 days. That shows they have almost no savings.
The United Way charity conducts a yearly research study, ALICE, that has concluded for several years that about 42% of Americans live with hardship, or an income well below their meticulous survival budget drawn up by the United Way.
The prestigious Brookings Institute shows 43% of all U.S. families “fall short on meeting basic needs.” The Federal Reserve continues to ask if the respondent can pay off a $400 expense in 30 days; the answer is that 37% cannot, and 52% cannot pay an emergency expense of $2,000. The Census' Poverty in the U.S. report shows, page 12, that 41.5% of Americans live with incomes below 200% the Official Poverty Level.
The Census also conducts a periodic Pulse Survey (Spending Table 1), and about 45% say that the recent inflation surge caused "very stressful" conditions, another 25% said "moderately stressful", another 21% "mildly stressful", and only 6% said "not stressful at all."
The RAND Corporation study
Inflation is not so much the problem as low-paying work. The RAND Corporation found that the median worker's income was $42,000 in 1975 and had grown to $50,000 in 2018, up $8,000. Also they claim the median income would be $92,000, a gain of 50,000 (not $8,000) had wages grown at the rate
that national income had grown. Much of what I'm saying can be found in a recent article in the American Prospect, "The $79 Trillion Heist" by Harold Meyerson. I think readers will grasp the big story he is telling, it's a revelation to see such an article.
What is my main point? Politicians and pundits are far removed from the reality many U.S. adults face.
Affordability is the issue.
Nonfinancial Corporations Amass Huge Profits
The profits of all "nonfinancial corporations" in 2019:Q4, pre-Covid, were $1.1055 trillion (see Federal Reserve, Flow of Funds, page 10, line 10). These nonfinancials earned 6.0% of the national income. Exactly five years later, 2024 Q4, profits were $2.8752 trillion and they were 11.9% of national income. Adjusting for inflation profits rose by 112%. The median household income rose by 0.6%, from $83,260 to $83,730, up $510. (Real Median Household Income, Fed FRED)
Pre-tax profits more than double in five years, and inflation surges in the 3 year period of rapid inflation, higher than any inflation since 1982. How is that possible? If profits double while prices were inflating, then obviously the mark-up had to exceed the rate of inflation. Which it did. See the study "Prices, Profits and Power" by Mike Konczal at the Roosevelt Institute. There are many other career economists who add to this story: Isabella Weber at UMass Amherst, Servaas Storm at INET Economics, to name a few.
Corporations saw an opportunity to raise their prices; they experienced supply bottlenecks combined with ultra-high consumer savings rates (household savings rate went from a normal 5% to 7% rate to around 18%, bea.gov interactive Table 2.1 line 35). Covid kept people from shopping and kept suppliers from delivering. But when the vaccine was distributed families flooded back to stores with pent up demand. This was when inflation began to surge, and companies saw the opportunity to raise prices higher than ever.
In short -- I took too long in laying out all the above -- the nation needs help with family income growth.
Affordability is the short name.
Solution #1 --
There are an abundance of solutions. I wrote about it in December, 2024, see the link below.
We could impose a very high minimum wage, say $25 per hour, on the 2,000 largest American companies; they employ on average above 20,000 employees. The total employment of these huge companies is about 50 million workers in 2026, which is about 31% working Americans. Corporations distribute over 90% of their profits to shareholders, not to workers whose wages were higher 53 years ago (see William Lazonick at INET Economics). This Solution is elaborated in my December 2024 essay.
It's time for candidates, elected officials, and would-be leaders to focus on the big social problem.
I have an essay, December 2024, which deals with "Solutions".
That's enough for this time. My blog has more, Economics Without Greed, part Two, http://benL88.blogspot.com
Thank you for reading. And may you succeed in your responsible role. Ben Leet
I am retired, I live in Mariposa, California.
