Axios Points Out That Real Wages in the U.S. Have Been Nearly Erased by Inflation Since Trump's Inauguration
Axios reports that since Trump took office in January 2025, real wages for production and non-supervisory workers have only increased by 0.1%.
Nominal hourly wages have risen by 4.9%, but due to energy-driven inflation (with May CPI at 4.2%), the real wage increase over the year has essentially disappeared, leaving workers' purchasing power nearly unchanged since he took office.
In market mechanisms, fixed-income earners and wage earners are rapidly shifting towards inflation-hedging assets, with funds flowing from cash wage savings into hard assets like commodities, gold, and cryptocurrencies. Producers and asset holders benefiting from inflation profit, while those whose real purchasing power is diminished face pressure.
Source: Public Information
ABAB AI Insight
Axios has previously tracked U.S. inflation and wage data, reporting early in 2025 that real wages increased due to low inflation during Trump's early tenure. However, the recent surge in energy prices has reversed this trend, similar to the purchasing power pressures seen during Biden's high inflation period.
In terms of capital pathways, the Federal Reserve is addressing inflation through interest rate policies, while the government faces supply chain impacts from tariffs and geopolitical conflicts. The motivation is to balance economic growth with price stability, but this has led to stagnation in real wages, forcing households to increase borrowing or reduce consumption, further driving capital to reallocate towards anti-inflation assets.
Similar cases include the 1970s stagflation period where wages were eroded by inflation leading to a bull market in gold and commodities, as well as the negative growth in real wages post-pandemic in 2021-2022. The U.S. is currently in a phase of real income redistribution under high debt and external shocks.
Essentially, this is a concentration of capital: inflation, through currency devaluation mechanisms, transfers wealth from wage savings to asset owners and debtors, accelerating the concentration of pricing power among a few hard asset holders and restructuring the economic leverage of the middle and lower-income classes.
ABAB News · Cognitive Law
Nominal increases are an illusion; real purchasing power is the true leverage. Inflation primarily affects those without hedges. When wages lag behind inflation, wealth accelerates its transfer from labor to capital. Policies may win nominal data, but the public loses in living costs; real stability depends on who sees the mechanisms first.