A reader’s note temporarily attached by Twitter to a claim by President Joe Biden — that “real wages for the average American worker is higher than it was before the pandemic” — said that statement “contains a factual error.”
But it turns out it doesn’t.
The fact check from Twitter’s user-generated “community notes” feature pointed out that the pandemic was declared in mid-March 2020, and that month average hourly “real” wages, meaning they’re adjusted for inflation, were $11.15, a bit higher than the $11.05 wages reported for June of this year.
According to Twitter, community notes are created by user “contributors” to “collaboratively add context to potentially misleading Tweets.” The company says “if enough contributors from different points of view rate that note as helpful,” a note is added beneath a Tweet, but the notes “do not represent Twitter’s viewpoint.”
But economists countered that measuring “before the pandemic” — as Biden put it — would mean comparing January or February 2020 wage data with the most recent month’s. By that measure, real wages were slightly lower pre-pandemic ($10.98 in January 2020 and $11.01 in February 2020) than they are now.
Real wages spiked early in the pandemic, not because people got raises but because many low-wage workers were laid off, while higher-paid employees remained.
The president’s claim, however, sidesteps what has happened to real wages since he took office in January 2021. And by that measure, real wages have gone down.
Shortly after Biden posted the tweet, Twitter added a note stating: “Readers added context they thought people might want to know.” According to the note, “The tweet’s claim about real wages contains a factual error. On 3/15/20 when US COVID lockdowns began real wages adjusted for inflation (AFI) were $11.15. As of 7/16/23 real wages AFI are $11.05. Real wages AFI remain lower (not higher) than before the pandemic.”
The note linked to a Centers for Disease Control and Prevention timeline of the emergence of COVID-19. As the timeline noted, the first COVID-19 case was reported in the U.S. on Jan. 20, 2020. On Feb. 26, Nancy Messonnier, then the director of the National Center for Immunization and Respiratory Diseases, warned about the likelihood of impending hardships like school closings, workplace closings and an end to mass gatherings, saying, “disruption to everyday life may be severe.” The World Health Organization officially declared COVID-19 a pandemic on March 11. Four days later, states started “to implement shutdowns in order to prevent the spread of COVID-19,” the timeline states.
Fox News ran a story about the community note, with the headline, “Biden called out for ‘factual error’ in ‘Bidenomics’ tweet, after boasting about wage levels.” The story noted that several Twitter users “point[ed] out that inflation has risen to a historic high under the Biden administration.”
Since Biden took office, consumer prices are up 15.7%. But the wage data cited by Biden is inflation-adjusted.
Shortly after the community note was posted, some economists began pushing back on it, saying the author had chosen the wrong starting point — March 2020 — as the pre-pandemic baseline. A spokesman for the Bureau of Labor Statistics told us the earnings data in question comes from the Current Employment Statistics survey for the pay period that includes the 12th of the month, regardless of the length of the pay period (weekly, biweekly, semimonthly and monthly).
Justin Wolfers, a professor of economics and public policy at the University of Michigan, tweeted that the community note was “simply off point” and noted that inflation-adjusted average hourly earnings were, in fact, slightly higher in June than they were in January 2020 “before the pandemic.”
Although the shutdowns in the U.S. didn’t begin until March 15, 2020, the effects of COVID-19 on the U.S. economy were already underway by then. Even in early March before a pandemic was officially declared, many people were staying home and layoffs had begun.
Most economists measuring pre-pandemic norms grab data from January 2020, though some use February, Wolfers told us in a phone interview. By late February, he said, many people were already not leaving their homes. To use March data as the pre-pandemic starting point is a mistake, he said.
There are numerous ways to measure wages, Wolfers said, and using the BLS data on inflation-adjusted average hourly earnings of all employees is a legitimate choice by those who created the community note. That’s also the data used by the White House to defend the statistic — it just uses January or February 2020 as the starting point instead of March.
“As official BLS data show and several economic commentators have noted: wages are now higher than they were before the pandemic—accounting for inflation,” White House spokesperson Michael Kikukawa told us via email. “That is true on average for all workers and it’s even more true for lower-wage workers.”
“Leading economists like Jason Furman, Justin Wolfers, and Arin Dube have all noted that real average hourly earnings are higher now than they were in January or February of 2020, the baseline that is widely accepted as representing the pre-pandemic norm,” Kikukawa said.
The starting date is so important because inflation-adjusted wages spiked early in the pandemic. But that’s not because workers were getting raises in the midst of all the economic turmoil.
As the White House Council of Economic Advisers explained in April 2021, “The sharp, one-month increase in reported average wages was because millions of relatively low-paid workers lost their jobs, while relatively high-paid workers remained employed. The shift in the composition of those employed meant the average wage rose.”
Wolfers said those “composition effects” continue to muddle analyses of post-pandemic real wages.
Jason Furman, a former economic adviser to President Barack Obama and now a Harvard University professor, posted on Twitter that compared with pre-pandemic, “[w]ages have also increased more than inflation (at least using the measures that are probably best suited to answering this question at this point). But real wage growth is behind what someone might have expected.”
Looking at the trend for the two years prior to the pandemic, Furman said, inflation-adjusted wages “are still 3-5% below their immediate pre-pandemic trajectory.” Looking at a longer pre-pandemic trend — 13 years — Furman said, the shortfall is far less pronounced, with wages about 0.6% lower now than the pre-pandemic trend.
In response to Biden’s claim, the Republican Party tweeted, “Biden wants us to believe real wages are higher under ‘Bidenomics.’ They aren’t.” The post notes, “real wages are down 3% since Biden took office.” It’s true that measuring from the start of Biden’s term in office, January 2021, real weekly earnings for production and nonsupervisory employees, the measure we prefer, have declined about 3.5%.
But that’s not the statistic Biden cited. Instead, he compared real wages now to those before the pandemic. Using January or February 2020 as a starting point, which makes the most sense, Biden is correct. We’ll leave it to politicians to debate whether that is due to so-called Bidenomics, as Biden claimed.
The community note has since been removed from Biden’s tweet.
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