The decline in the purchasing power of American paychecks, Donald Trump returns to the Oval Office.

To measure the economic slice of Trump’s victory over Vice President Kamala Harris, my trusty spreadsheet compiled a paycheck power index. It combined three key business metrics for all 50 states and the District of Columbia; average weekly wages paid by private sector bosses unemployment rates and inflation measured across the country Consumer Price Index .

Wage increases were compared to unemployment to approximate how many people received pay increases. These raises were later discounted due to the rising cost of living.

The purchasing power results were then weighted by the state’s electoral college votes to create a national index that takes voting into account. This gave this criterion, as in presidential elections, favoritism of small states. Here’s how this measurement worked.

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First, note that in the four years ending in September — roughly measuring President Biden’s economy, a track record tied politically to vice president Harris — the typical U.S. paycheck rose 17%. That was slightly better than the 14% increase in the previous four years of Trump’s presidency.

Second, the Biden/Harris unemployment rate averaged 4.2%, compared to 4.8% during the Trump years.

Finally, and perhaps the turning point of the election, consumer prices have risen 21% in the last four years, compared to an 8% increase in the previous four years.

So when you combine these three metrics, adjusted for the quirks of the Electoral College, the pay power index is down 4% under Biden/Harris after rising 5% under Trump.

This is not a small gap. Exit polls show us that a third of voters say the economy is their most important issue; 80% of those with impatient wallets vote for Trump.

Fare change

Now let’s consider the index by which presidential elections are actually determined at the state level.

Comparing these periods, we see that the purchasing power of a typical paycheck has increased in only two states: Idaho and North Dakota. Regardless of the economy, liberal Harris had no luck in either conservative state.

Still, consider the declines in this pay metric for the seven swing states in 2024; It looks like they were all won by Trump.

In Nevada: Purchasing power has fallen by 5% in the last four years, but increased by 9% in the previous four years. This is the eighth-largest decline among the states.

Arizona : A decrease of 1% in the last four years compared to a previous increase of 8%. 26th largest gap.

Georgia: 5% off over the last four years compared to the previous 3% increase – ranked 27th.

Michigan: A 3% decline over the last four years compared to a previous 4% increase – ranking 32nd.

• INFLATION TRENDS: What’s up? What’s cheaper? What’s next? CLICK HERE!

Pennsylvania: 5% off over the last four years compared to the previous 2% increase – ranked 31st.

Wisconsin: 1% reduction over the last four years compared to a previous 4% increase – ranked 38th.

North Carolina: 1% reduction over the last four years compared to the previous 4% increase – ranked 40th.

warning

Now consider how purchasing power is declining in three giant economies with very different political preferences. Pocketbooks clearly didn’t impress every voter.

In California, paycheck strength has fallen 8% in the past four years, compared to a 9% increase in the previous four years. That fourth-largest margin didn’t stop Harris from easily winning the state.

Meanwhile, Texas’s wage index has fallen 1% over the past four years, compared to a previous 1% increase; This was the fourth lightest decline. And Florida’s recent 1% decline was its 17th-best performance, compared with a 6% increase in 2016-20.

Still, this pair of states easily went after Trump.

In conclusion

I stated this in a previous column. Inflation and the job market were historically accurate predictors of presidential elections. The only problem this year was that they pointed in opposite directions: jobs were in Harris’ favor, inflation was in Trump’s favor.

Harris and her supporters campaigned on the claim that the economy was performing admirably. My salary index agrees.

• RECRUITMENT TRENDS: Who is adding workers? Where are the layoffs? CLICK HERE!

Consider the recently completed third quarter. Weekly wages in the US have increased at an annual rate of 3.2%, slightly below the 3.6% average since 2016. Meanwhile, unemployment increased by 3.9% compared to the normal of 4.5%.

And pesky inflation has calmed, growing at an annual rate of 2.6%, compared with an eight-year average of 3.4%.

This caused my pay power index to increase by 0.4% in the quarter. This was the first increase in the purchasing power of American workers since the beginning of 2021.

So, was this rise too little, too late? Wasn’t the economy an important issue for undecided voters?

Or were many Americans unwilling to forgive the holes left in their wallets by the worst inflation surge in four decades?

Jonathan Lansner is the business columnist for Southern California News Group. He can be reached at: [email protected]

First Publication Date: November 7, 2024 11:58 CST