I’m an Economist: My Prediction for Household Incomes Under Trump
Written by
Andrew Lisa
Edited by
Gary Dudak
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In today’s news, emotionally complex social and cultural issues grab most of the headlines, and when the conversation turns to the economy, inflation — or more recently, tariffs — takes center stage. However, rising prices and cost-of-living spikes are much harder on low-income earners than on those who enjoy high salaries. So, if you can buy your way out of inflationary pressures, shouldn’t income join the price of gas and groceries at the top of the national list of priorities?
GOBankingRates spoke with an economics professor about the impact that Trump’s second term could have on the Federal Reserve and household earnings for full-time, year-round workers.
High-Income Earners Will Likely Reap Most of the Benefits
Dennis Shirshikov is a professor of economics, finance and accounting at the City University of New York. He is also a regular contributor to Forbes, Time and the Wall Street Journal, and he covers how governmental policy influences personal wealth in his academic courses. Relying on Trump’s original stint in the White House, Shirshikov predicts that any gains to household income will not be distributed evenly, as the president will likely negatively impact many income groups.
“I anticipate that household incomes in 2025 could experience uneven growth,” he said. “Historically, Trump’s policies have favored tax cuts and deregulation, which might stimulate higher-income brackets and certain industries like real estate and finance, potentially leading to wage growth in these sectors.”
Those Who Are Struggling or Just Comfortable Could Miss Out
However, Trump’s first-term record leads Shirshikov to conclude that the impact will be mixed for middle- and lower-income households.
“While tax cuts might offer some relief, the benefits could be offset by inflationary pressures or reduced government spending on social programs,” he said. “An example from his previous term showed that while the stock market and high-income earners benefited significantly, wage growth for the middle class was more modest, and income inequality widened.”
What Do Household Incomes Look Like Now?
In 2025, the most recent data released has the Census Bureau showing the real median household income increased 4% from 2022 to 2023, with a current estimate coming in around $80,610. When you look at national averages, the statistics get a little more specific. Here are some examples:
- The average annual income in the U.S. is estimated to be $61,984.
- Men earn $67,704 annually, while women earn $56,316 — that’s an $11,388 gap.
- Women make $0.83 per dollar earned by men.
Trump’s Impact on Income So Far in His Second Term
President Trump has a track record for taking big economic swings, both in his first term and now currently in his second with his evolving tariff policy. But how will these tariffs affect lower-income families? Will they improve American production of goods? Does Trump have the legal authority to levy tariffs in the first place?
Though economists have gone back and forth, many estimate that it could reduce wages by 5% and middle-income households could face a $22,000 lifetime loss. However, the courts have blocked some of Trump’s attempted tariffs, but if they are eventually levied at his intended amount, they will ultimately reduce the openness of the economy, including international capital flows.
Simply put, there is a good chance domestic capital investment prices will fall, and the reduction in economic activity has some experts approximating it will be twice as large as a tax increase on capital returns that raises the same amount of revenue.
Caitlyn Moorhead contributed to the reporting for this article.
Sources
- NBC News, “Trump’s new tariffs will hit lower-income households the hardest“
- Penn Wharton, “The Economic Effects of President Trump’s Tariffs“
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