Biden vs Trump: Who’s Grown the Economy?

While immigration and abortion are two of the hottest issues driving voters’ passion, the national economy has remained one of the public’s top three concerns for years. In three polls the Wall Street Journal conducted from April to December 2023, the economy ranked as the top issue out of twelve.

Those surveyed were asked: What issue is most important to you when thinking about who you will vote for in the 2024 Presidential Election? Republicans have been hammering Biden’s administration for soaring inflation and hurting our economy— even though they contributed to both. At the end of 2021, Biden’s first year in office, Senate Minority Leader Mitch McConnell accused Biden of causing inflation, saying, “The last thing we need to do is pile on with another massive, reckless tax and spending spree.” McConnell ignored the fact that both parties were responsible for the consumer price index (CPI) increasing at a 5 percent annual rate for the first half of 2021.

Congressional Republicans and Democrats overwhelmingly passed—on a bipartisan basis—more than $2 trillion of economic stimulus legislation in response to COVID during Trump’s term in office. The legislation stopped the economy from collapsing when the pandemic threw millions of workers out of work and halted many business operations.
 
Trump signed the legislation and took credit for providing $1,200 checks to individuals and $790 billion in low-interest loans to small businesses through the Paycheck Protection Program (PPP). The infusion of these federal funds saved the economy but also triggered inflation, stoked further by the Federal Reserve Board significantly increasing bank borrowing rates. 
 
However, the U.S. was not alone in having to deal with inflation. It climbed to the highest level since 2008 in the Organization for Economic Cooperation and Development’s 38 member countries. That was also due to COVID shrinking the labor force and stimulating consumer demand as the pandemic receded.

It’s true that food costs were relatively flat under Trump’s administration, before the economic impact of COVID kicked in during the last half of his final year. Since 2020, supermarket prices are now 25 percent higher. That increase was due directly to COVID’s impact on reduced labor and materials supplies, as more dollars were pumped into the economy bidding for fewer goods.

The politics of blaming Biden for many of the economic problems spawned by COVID may have skewed poll results to show that Americans’ economic wellbeing fell under his administration.
 
In the eight polls the WSJ conducted from March 2022 to February 2024, about half of the respondents strongly disapproved of how Biden handled the economy, specifically inflation and rising costs. Those who strongly approved never exceeded 19 percent until the most recent poll in February when it went to 23 percent. This is good news for Biden, although he still faces an uphill climb on that issue.

It is important to note that the WSJ poll respondents were relatively evenly divided among Republicans and Democrats (between 31 and 34 percent), with Independents remaining constant at between nine and ten percent.

There is some evidence that independent voters might be inclined to support Biden. In polls before and after Biden’s State of the Union, independents who believed his economic policies would move the US in the right direction jumped from 41 percent to 61 percent afterward.
 
A Biden information campaign could resonate with independent voters if they are swayed more by data than party allegiance. If so, independents might look closely at what both campaigns are saying to see if it aligns with reality.
 
The most significant slice of the populace, regardless of party affiliation, are wage workers. They are concerned with having a job and making enough to keep up with inflation. In their State of the Union (SOTU) speeches, both Trump and Biden made a pitch to them.

In his final SOTU, Trump said 7 million new jobs had been created since his election. When Trump spoke, he was correct. However, the coronavirus was already spreading across the globe, and within weeks, the U.S. economy was shut down, throwing millions of people out of work. As a result, Trump ended up with more than 3.1 million jobs in the hole because of pandemic employment losses. 
 
In his most recent SOTU, Biden disputed Trump’s claims by presenting good economic news from the first three years of his administration. He proudly said that during this time, “15 million new jobs in just three years — a record, a record!”

Delivering federal money to aid businesses to continue operating during COVID played a significant role in that expansive number. It may be that up to 11 million of those “new” jobs were due to workers returning to jobs they had lost. 

Nevertheless, data from the U.S. Bureau of Labor Statistics shows that Biden created more jobs over a shorter period than Trump. 
 
When Trump took office in early 2017, total non-farm employment stood at 146 million. It took him three years to add 6 million more workers. That was the peak of his administration – 152 million non-farm jobs in February 2020. Then, the pandemic struck and employment plummeted – in just two months – to 122 million.

In the first full month of Biden’s administration, February 2021, employment stood at 143 million. And three years later, in February 2024, it stood at 158 million. In other words, Biden added 15 million workers in the first three years of his presidency.
 
The bottom line is that job creation occurred under both administrations, but it contracted sharply when COVID hit the entire population. The emergence of COVID, or any natural disaster, goes beyond any president’s control. However, how they respond and how funds are used determines their effectiveness in dealing with these events. Biden responded very well by creating more jobs faster than before the pre-COVID economy under Trump’s administration. 

Democrats are distressed by signs that their blue-collar voter base is swinging over to the Republicans. They lean on Republicans’ cultural war against the “elites,” i.e., liberals and Democrats, for an explanation. There is some truth that the liberal cultural agenda threatens many established conservative values by promoting affirmative action, more accessible admittance for asylum seekers, and institutional protections for all minorities – including race, gender, and sexual identification. 
 
Many Democrats cannot understand how working-class families could support a narcissistic billionaire who gives out-sized tax benefits to corporations and comparatively meager ones to working families. The answer may rest in the fact that under the Trump Administration, paychecks did rise. 

A president’s chance of winning reelection is often based on how most voters have experienced the economy during the previous four years. A “good” economy is one in which paychecks grow faster than prices in “real” (inflation-adjusted) terms.
 
The average weekly earnings of all private-sector workers, in “real” terms, rose 8.7 percent in Trump’s four years. More germane for Democrats is that the blue-collar wages for rank-and-file production and nonsupervisory workers — who make up 81 percent of all private-sector workers — went up 9.8 percent under Trump.

Workers probably don’t care that those gains were an extension of a trend that started after the 2007-2009 recession. During the previous Democratic term, the Obama years, real weekly earnings rose 4.2 percent for all workers and 4 percent for rank-and-file.
 
Unfortunately for Biden – as Matt Bruenig explains in a piece for the Socialist magazine “Jacobin” – real wages have declined under Joe Biden’s presidency. Bruenig writes: “It’s clear that most workers saw their real wages decline throughout nearly all of 2021 and 2022.”
 
His chart shows that the median usual weekly real earnings of full-time workers rose from the beginning of 2018 to the spring of 2020 while Trump was in office. Afterward, they fell dramatically for the next 24 months and only then began a modest rise. By December 2023, real wages were only $3 higher than when COVID started four years earlier.
 
In brief, Bruenig makes “clear that most workers saw their real wages decline throughout nearly all of 2021 and 2022.” That fact helps explain how the cultural wars alone do not account for most blue-collar workers supporting Trump. 
 
It is easy to understand why the WSJ’s polls showed many workers felt better off under the Trump administration. The steady rise in their real wages have contracted during Biden’s administration, when the brunt of COVID’s constraints on business activity landed. 
 
While economic stimulus funds, supported by both parties, softened COVID’s impact on most workers, they also fed inflation, which the independent Federal Reserve Bank contributed to by increasing interest rates. Rising inflation reduced the margin between stalled wages and rising consumer costs. 
 
History shows that both Trump and Biden supported government intervention in the marketplace, pouring historically high amounts of federal dollars into it to avert an economic recession. Inflation and job fluctuations resulted in both cases. 
 
If Biden tries to validate his economic policies by explaining complex data, he will lose his audience to Trump, who has spent his life promoting his successes, real or not, in simple soundbites. He ignores critical details that compromise his narrative, and he knows how to captivate an audience through claims of extravagant feats against a common enemy.
The Democratic message should be that Biden, as the helmsman, steered this country back into calmer waters. He successfully managed the most significant sudden infusion of federal funds and beneficial regulations the U.S. had seen since the Great Depression.

Biden’s economic policies followed up on the bi-partisan effort to avoid a financial collapse due to COVID. And he did so without blaming others for our condition.