By Blue-collar wages are rising, inflation is falling, and for the first time in decades, American workers are seeing real gains in their paychecks—clear evidence, the Trump administration says, that its economic policy is working.
New figures from the U.S. Treasury Department show that real wages for hourly workers jumped 1.7% between December 2024 and May 2025—the strongest early-term growth for blue-collar pay since Richard Nixon’s first year in office. The gains arrive just five months into President Donald Trump’s second term and represent a dramatic turnaround from the wage losses suffered under his predecessor. During the same period in 2021 under President Joe Biden, wages dropped 1.7% as inflation wiped out nominal earnings, according to new reports.
Treasury Secretary Scott Bessent wrote that “hardworking Americans and Main Street businesses have never had a stronger ally” than Donald Trump.
Thanks to @POTUS’s pro-growth, America First policies, real wages for hourly workers are up nearly 2% in the first five months of @realDonaldTrump’s second term — the strongest growth in 60 years.
No president has done that before — except President Trump in his first term.… pic.twitter.com/gasjQn33eb
— Treasury Secretary Scott Bessent (@SecScottBessent) June 17, 2025
At the heart of the administration’s approach is a three-part economic doctrine: rebuilding U.S. manufacturing, restricting illegal immigration to protect wages, and delivering broad-based tax relief for working Americans. The early results, Bessent argued, vindicate the strategy. “When the labor market is flooded with cheap, unauthorized labor, wages get pushed down. We’ve put a stop to that,” he said.
Historical comparisons underscore the scale of the shift. Barack Obama saw a 0.3% wage decline in his first year. George H.W. Bush presided over a 3% drop. Jimmy Carter’s early months saw no gain at all. Even Trump’s own first term, though comparatively strong, fell just short of the current pace.
The White House is now preparing to accelerate the trend. A sweeping budget bill, known informally as “One Big Beautiful Bill,” is expected to pass this summer. The legislation would eliminate federal income taxes on tips and overtime pay—two key sources of income for service and hourly workers—and create powerful new incentives for domestic manufacturers to hire and expand operations in the U.S.
Counselor to the Treasury Secretary Joe Lavorgna, during an appearance on Kudlow on Tuesday afternoon. Larry Kudlow made the point that wages are rising faster than prices and asked, “Why is this happening now?”
“Larry, we we saw it when I worked for a very important person that was the director of the National Economic Council. You can guess who that was, and we saw a historic boom in blue-collar wages,” Lavorgna said. He was alluding to Kudlow who headed up the NEC from 2018 to 2021, reported Fox Business.
Lavorgna added, “And we’re clearly building upon that now, thanks to the president’s policies and the One Big, Beautiful Bill and when that’s passed will solidify the supply-side growth initiatives that the president’s put forward and that the Treasury secretary is working to implement. And the blue-collar boom will broaden and get even bigger.”
When asked about economic growth, pointing out the Atlanta GDP was tracking a possible GDP growth rate of 3.5% in the second quarter, Lavorgna said, “What really struck me was the import price data, which shows absolutely no tariff pass through at all. In fact, when you look at the changes in import prices from China, Canada and Mexico, what you see is actually prices declining since the president put those tariffs initially in place.”
Taken together, administration officials say, the data marks the beginning of a new economic chapter—one that rewards work, protects labor markets, and reorients the nation’s industrial base toward long-term prosperity.
There’s a reason why as soon as Trump took office, the percentage of voters saying the country was on the right track shot up from 26 percent to 42 percent. For millions of Americans who work with their hands, Trump’s policies are not just rhetoric. They’re a raise.
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