WASHINGTON DC – American workers are earning bigger paychecks than when President Donald Trump returned to the White House in January 2025.
But after accounting for inflation, much of that increase has disappeared.
Energy costs have risen sharply. Food and housing cost more. Mortgage rates remain near 7 percent. And in Michigan, the labor force has shrunk significantly during the past year.
Yet there is another side to this economy.
Unemployment remains relatively low. Employers added 162,000 jobs in August — substantially better than the average monthly gain during the previous 12 months. Manufacturing added 16,000 jobs. And Americans with substantial investments have benefited from a stock market that has continued climbing.
So on Labor Day, MITechNews decided to ask a question likely to become increasingly important as the midterm election campaign moves into its final weeks:
Are American workers better off today than when Trump took office?
The numbers don’t produce a simple answer.
TRUMP’S FIRST 19 MONTHS: WHAT CHANGED FOR WORKERS?
Wages: UP
Average hourly earnings for production and nonsupervisory workers increased from $30.84 in January 2025 to $32.53 in August 2026.Unemployment: SLIGHTLY HIGHER
4.0 percent in January 2025 versus 4.1 percent in August 2026.Inflation: PRICES STILL RISING
Consumer prices were 3.4 percent higher in July than a year earlier.Energy: UP SHARPLY
Energy prices increased 14.7 percent over the past year, including a 24.6 percent increase in gasoline.Mortgage Rates: STILL HIGH
The average 30-year fixed mortgage was 6.71 percent in early September — slightly lower than around Trump’s inauguration but still historically expensive compared with the ultra-low rates earlier this decade.Stock Market: UP
The S&P 500 has gained more than 11 percent so far in 2026.Michigan Workforce: SHRINKING
Michigan’s labor force declined by 143,000 people between July 2025 and July 2026.Important: These numbers measure what happened during Trump’s second term. They don’t establish that Trump or his policies caused every change.
Paychecks Are Bigger — But What Can They Buy?
This may be the most important calculation in the story.
Average hourly earnings for production and nonsupervisory private-sector workers increased from $30.84 in January 2025 to $32.53 in August 2026 — roughly 5.5 percent.
But consumer prices have continued rising.
The latest available Consumer Price Index shows overall prices were 3.4 percent higher in July than a year earlier.
August inflation data won’t be released until Sept. 11, so an exact apples-to-apples comparison isn’t yet possible.
But the larger picture is clear:
Workers have bigger paychecks, but rising prices have consumed much of those gains.
And some of the expenses consumers notice most have increased considerably faster than overall inflation.
Energy prices rose 14.7 percent during the past year. Gasoline jumped 24.6 percent. Electricity increased 4.2 percent. Food increased 3 percent, shelter 3.2 percent and vehicle maintenance and repair 6.6 percent.
That means inflation doesn’t affect every worker equally.
Someone driving 50 miles to work every day may feel today’s economy very differently from someone working remotely.
Michigan Has Another Problem: A Shrinking Labor Force
Michigan’s unemployment rate was 4.9 percent in July, compared with 4.1 percent nationally that month.
But the more troubling number may be underneath the unemployment rate.
Michigan’s labor force declined from 5.021 million people in July 2025 to 4.878 million in July 2026.
That’s 143,000 fewer people in the labor force in one year — a 2.8 percent decline.
The number of employed Michiganders also fell by 136,000.
At the same time, Michigan payroll employment actually increased slightly over the year.
Those numbers aren’t contradictory. Someone who stops looking for work isn’t counted as unemployed.
For Michigan employers already concerned about an aging population and finding skilled workers, a shrinking labor pool could become a significant long-term economic problem.
Buying A House Isn’t Getting Much Easier
Mortgage rates haven’t increased since Trump took office. They’ve actually declined modestly.
But an average 30-year mortgage around 6.7 percent remains expensive for someone trying to purchase a first home.
That creates another economic divide.
A homeowner who refinanced at 3 percent several years ago may be largely insulated from today’s mortgage market.
A 30-year-old trying to purchase a first house isn’t.
But Investors May See A Completely Different Economy
Here’s where the answer to “Are you better off?” gets particularly interesting.
The S&P 500 has gained more than 11 percent so far in 2026.
That can mean substantial gains for Americans with money invested directly in stocks or indirectly through retirement accounts.
Gallup estimates roughly six in 10 Americans own stocks when mutual funds, 401(k)s and IRAs are included.
But stock ownership — and the amount owned — varies enormously with income.
Federal Reserve data show only about 34 percent of families in the bottom half of the income distribution own stocks, directly or indirectly.
Ownership jumps to 78 percent among families in the 50th through 90th income percentiles and 95 percent among the highest-income 10 percent.
And owning $10,000 of stocks obviously isn’t economically equivalent to owning $500,000.
Among families that owned stocks, median holdings were about $12,600 for those in the bottom half of the income distribution, compared with $53,200 for the upper-middle group and $608,000 among the top 10 percent.
A retiree, business executive or entrepreneur with a substantial portfolio therefore may see today’s economy very differently from a worker primarily dependent on wages.
WHERE DO YOU FIT?
The Federal Reserve divides American families by before-tax family income. Its latest comprehensive Survey of Consumer Finances uses 2022 dollars.
Bottom 20%: Less than $34,600
Median family income: $21,60020%–40%: $34,600 to $59,500
Median: $44,800Middle 20%: $59,500 to $94,600
Median: $71,20060%–80%: $94,600 to $153,100
Median: $115,70080%–90%: $153,100 to $245,400
Median: $189,200Top 10%: More than $245,400
Median: $378,300The takeaway is striking: Americans can experience the same economy very differently depending on whether their financial well-being comes primarily from wages or from assets they already own.
What About Trump’s Economic Policies?
Trump has made tariffs, immigration restrictions, tax policy, deregulation and encouraging domestic manufacturing central components of his economic agenda.
Supporters argue those policies can protect American industries, stimulate investment and ultimately create better-paying jobs.
Critics argue tariffs can increase costs for businesses and consumers, while immigration restrictions can tighten labor supplies in some industries.
Michigan is particularly exposed because its automotive industry depends upon deeply integrated North American supply chains.
But there’s an important distinction between economic changes that occurred during Trump’s presidency and changes that occurred because of Trump’s policies.
Presidents don’t directly determine mortgage rates, gasoline prices, stock prices, wages or grocery prices. Those are also influenced by the Federal Reserve, global markets, businesses, Congress, consumer demand and numerous other forces.
So Are Workers Better Off?
The answer may depend heavily on who you are.
Someone with a good job, rising wages, a house financed at a low fixed rate and a large investment portfolio may be considerably better off.
A younger worker trying to purchase a first home, with little invested in stocks and a long commute, may reach exactly the opposite conclusion.
Michigan adds another warning sign: 143,000 people have disappeared from the state’s labor force in a year.
Perhaps that’s the central lesson of the Labor Day 2026 economy.
There isn’t one economy experienced equally by every American.
There’s the economy of paychecks.
The economy of bills.
The economy of homeowners.
And the economy of investors.
Labor Day also traditionally marks the transition from summer into the fall political campaign. This year, voters are less than two months from the first midterm elections of Trump’s second presidency.
Republicans and Democrats will offer very different interpretations of Trump’s economic record.
But after all the statistics, campaign speeches and political advertising, voters may reduce the debate to a much more personal question:
Are you better off today than when Donald Trump took office?
For millions of Americans, the answer may come down to an even simpler calculation:
What’s left after the bills are paid?
