The biggest lie about America’s economic crisis is hiding in your paycheck

President Donald Trump attends a Governors Dinner at the White House in Washington, D.C., U.S., February 21, 2026.

The “affordability crisis” that Democrats are running on and Trump calls a “scam” is almost always framed as being about prices being too high. But that’s only half of the equation, and the other half — income being too low — is almost never discussed outside of Bernie Sanders’ circles. There’s an insidious reason for that, which I’ll lay out in just a moment.

Politicians promise to “bring prices down” as if prices exist in some sort of economic or political vacuum. But prices are set in dollars, and the true definition of inflation isn’t that prices go up (that’s a consequence of inflation) but that the value of the dollar goes down.

Inflation, in other words, doesn’t quantify the rising cost of living so much as it measures the declining purchasing power of the dollar. And inflation never reverses (except in true depressions). As the CEO of McDonalds said just this week:

“One of the things I’ve talked to our team about is we need to stop talking about that being a difficult environment, and just say that is the environment. Because I think, as we look out forward, we’re not expecting things to change.”

For example, in 1957 my dad bought the Lansing, Michigan house I grew up in for $13,000. Today it’s worth, according to Zillow, $140,400, about ten times as much. But it’s not that the price of our house went up; the value of the dollar has gone down by about a factor of ten in the intervening ~70 years.

In 1957, for example, using the Bureau of Labor Statistics’ average retail food price tables for that year, a dozen eggs ran about 56 cents, a pound of hamburger was 46 cents, and a loaf of white bread cost 19 cents. Today, going by the most recent BLS average price data (June), eggs averaged $2.14 per dozen, ground beef was $6.83 per pound, and a loaf of bread comes in at $1.85.

This basket of three groceries that cost $1.21 when Dad bought that house now costs $10.80, just about ten times the 1957 price.

In other words, the purchasing power of a dollar in 1957 was about the same as ten dollars today.

But that’s only half of the equation.

My dad worked in a tool-and-die shop in Lansing and on that one single union paycheck was able to buy that house, a new car every three years, take a vacation every summer, put his four sons through school, and have a nice pension and cushion for retirement. That was the historic definition of being in the middle class.

Two-thirds of us were in that middle class when Reagan took office in 1981 and declared the Republican War on Working People, and as a result of his efforts it today takes two full-time jobs to hit that goal and only around 40% of us can pull it off.

The problem today, in other words, isn’t that prices have gone up too far, but that wages haven’t kept up with them. And for that, you can thank Ronald Reagan, George W. Bush, Donald Trump, and the GOP.

Just 199 days into his presidency, Reagan fired the nation’s air traffic controllers and decertified their union, kicking off the GOP’s War on Workers. Almost two-thirds of all workers in America back then had the wages and benefits of a union job (because a third of us were unionized, and that set the local wage and benefits floor for another third of us).

And the minimum wage when Reagan came into office was $3.35 an hour or $12.58 in today’s dollars.

In the 45 years we’ve been living in the Reagan Revolution, union density has collapsed to around 6 percent of the private workforce, taking those good wages and benefits with it, while the minimum wage has been frozen by Republicans in Congress at $7.25 an hour (purchasing power of $1.96 in 1981 dollars) for the past seventeen years.

As a result, working class Americans are getting wiped out. As I noted in Who Stole the American Dream?:

“When my Boomer generation was the same average age as Millennials are today, back in 1990, we held 21.3 percent of the nation’s wealth. Louise and I shared in that wealth: although we were still in our 30s, in 1990 we owned a profitable small business—our fourth—and a nice home. …
“Millennials today, by contrast, are roughly the same number of people as Boomers were in 1990 but hold only 4.6 percent of the nation’s wealth. If they’re the same age I was in 1990, they’re most likely struggling to own a home, are deeply in debt, and find it nearly impossible to start a small business.”

And just this summer the Federal Reserve found that about half (49%) of all adults under the age of 30 still live with their parents.

Meanwhile, the Rand Corporation did the math and found that the result of the destruction of our unions and freezing of our minimum wage, combined with massive tax cuts for billionaires from Reagan, Bush, and Trump, have transferred a mind-boggling $79 trillion from the middle class into the money bins of the morbidly rich since the Reagan era.

Republicans and their billionaire owners, in other words, robbed working people for 45 years and are continuing to do so today. And rather than letting you know that they’ve been suppressing wages and benefits all these years, they want you to think that there’s some mysterious “inflation” force of nature that’s responsible for your difficulties.

The math is irrefutable, as MSNBC’s Steve Rattner points out. When a worker produced $100 worth of value for their employer when Reagan came into office, that worker got paid about $65 of that as pay and benefits. Today, the same worker producing the same value for their employer gets about $52.

The remaining $13 goes straight into the pockets of shareholders (driving up the stock market) and CEOs (so they can buy new yachts, million-dollar weddings, and Swiss chalets), and this has been going on pretty much every year since Republicans began this scam.

This is why it seems like it’s all about prices; because of the GOP War on Working People, folks don’t have the income to meet today’s costs of living. Which is why Drudge led his newsletter yesterday with the following headlines at the very top:

10-year yield leaps to 19-year high...
Mortgage rates surge above 7%...
MCDONALD’S CEO: HIGH INFLATION HERE TO STAY...
Big Beautiful Bill Starting to Bite...

While it’s true that “the rent’s too damn high,” the solution isn’t to lower prices. That’s not going to happen (outside of anomalies caused by changes in tariffs, bird flu, the Iran war, and Trump’s trade wars) because we’ve been experiencing actual inflation: the deterioration of the value of the dollar, now running at about 3% a year.

Instead, we should be talking about how to get wages back up to where they should be:

— The minimum wage peaked in buying power in 1968 at the crest of America’s middle class prosperity: it was $1.60 an hour, the equivalent of $15.70 today. We should at least double today’s federal $7.25 minimum wage as soon as possible.

— Similarly, unions are both democracy in the workplace — a desirable situation in a nation that claims to value democracy — and give workers the bargaining power to demand a fair share of the value they’re producing for their employers.

We should be doing everything we can to make it easier to form and join a union. Instead, we’re subsidizing billionaire anti-union employers.

For example, in Nevada, 48.4% of Amazon workers and 29.3% of Walmart workers were enrolled in Medicaid (free healthcare for low-income people) in 2024. Other states have similar statistics, although the numbers are highly regional because Democratic-controlled states tend to have far higher minimum wages than Republican-controlled ones.

Nationally, a new 2026 GAO report found that virulently anti-union employers with morbidly rich CEOs — including Walmart, Amazon, Dollar General, McDonald’s, Dollar Tree, Target, and Home Depot — had huge numbers of workers receiving Medicaid or SNAP, with literally millions of them working full time but still earning so little that they qualify for these welfare subsidies paid for with your and my tax dollars (the billionaires, by and large, aren’t paying income taxes above 4%).

Research from the UC Berkeley Labor Center found that 27.8% of nonunion workers’ families rely on SNAP, the EITC, or TANF. These are direct, taxpayer-funded subsidies for the billionaires who own and run these companies and refuse to pay an honest wage for honest work.

Our national corporate media, of course, would rather not discuss any of these simple realities for two very basic reasons:

1. If they acknowledged this echo of the Reagan Revolution, they’d have to pay their own workers more or seem like hypocrites.

2. They don’t want to “seem partisan” by calling out the GOP’s 45-year campaign to rip $79 trillion away from working families to give to the oligarchs who, in many cases, own these very same media properties.

So, it’s up to us. While it’s okay to talk about affordability and inflation, let’s always be sure to point out that the real problem is that working people are being ripped off by their employers and we need to raise wages and union density nationwide.

And that’s something that politicians can change — and progressive Democrats (and Dwight Eisenhower) did during the years from 1933 to 1981 — with government policies. With our support, they can do it again.

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