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Originally Posted by opendoor
Those were two different things. The pre-pandemic reference was talking about real wage growth in the bottom 40%, while the last 4 years was talking about a recession/post-recession cycle. For that latter, yeah, I guess I should have said 4.5 or even 5 years to be totally accurate.
For the wage growth in the bottom 40% though, yeah you can't necessarily chalk that all up to Democratic policies, but I think arguing that there was strong organic real wage growth in 2020 with the huge unemployment that was happening is a tough to case to make.
And you also have to consider monetary policy. The massive injections of cash into the economy in 2020 will show up in wages a lot faster than they will in inflation. So 2020 wages got the benefit of the huge growth in money supply, whereas 2021 and beyond are where that was felt in terms of inflation, which reduces real wages.
Again, that's why comparing to pre-pandemic is a better measure because it accounts for all that. If Biden gave everyone in the country $10K each a year ago, wage growth would have been exceptional and the annual inflation rate probably wouldn't have gotten too out of control right away. But eventually inflation would skyrocket and depress real wages in 2025 and beyond. Only looking at 2024 in that instance would be misleading.
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But what you said about pre-pandemic was:
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Compared to pre-pandemic, annualized real wage growth among the bottom quintile was 30x higher than it was from 1980-2019
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Which is just incorrect, according to your source. If you look at Figure A in the Appendix, the highest "cumulative percent change in real hourly wages" was from 2016 to 2020. After that, things pretty much stagnated.
If you had said "Prior to 2016, annualized real wage growth was essentially nothing", that would be correct and defensible. But there was definitely significant real wage growth pre-pandemic.