There is no disputing that we live in the wealthiest country in the history of the world. The United States has the most power and money out of every country on Earth.
In spite of this, economic conditions seem to be getting worse for average Americans. Ask anyone and they will tell you why they think this is. It could, for example, be immigrants, lack of free markets, tariffs, or the U.S. falling behind on innovation.
Whatever you think, I believe that knowing the statistics is the most important thing.
First, the overall economy.
The 2023 Gross Domestic Product (GDP) of the United States was $27.7 trillion. China, the country with second highest GDP, had a GDP of $17.8 trillion. The United States alone accounted for 26.11% of the world GDP. Gross domestic product is the total monetary value of all goods and services produced and sold (“GDP by Country – Worldometer”). This effectively means the U.S. controls more than ¼ of the world economy and has the biggest economy by a large margin.
If we continue to look at the overall economy, we will see that the GDP is still growing but is projected to grow slower than usual due to factors such as tariffs, immigration, and uncertainty.
Deloitte, one of the large “four” accounting firms, expects one of two scenarios to take place.
The “downside, More tariffs, less people” assumes increased tariffs and decreased immigration will lead to less economic growth and, ultimately, a recession.
“Our downside scenario assumes a larger rise in tariffs relative to our baseline. We assume that the average tariff rate rises to about 20%, as products such as pharmaceuticals and semiconductors that are currently undergoing Section 232 investigations in the United States are ultimately tarrifed. We also assume that net migration falls to zero from 2026 through 2030. This could come from fewer entrants into the country as well as an increase in deportations… The combination of tariffs and looser monetary policy causes inflation to accelerate through the end of 2026… Given the higher inflation and interest rates, the economy enters a recession in the fourth quarter of 2026 and comes out of it in the second half of 2027 as the Fed provides more accommodation and inflation begins to subside. Output does not return to its previous high until the first quarter of 2028. The unemployment rate averages 5% in 2027, up from 4.2% in 2025. Weaker immigration also weighs on real GDP and employment growth.”
In the “upside: more people, fewer tariffs” assumes tariffs will be lessened and “net migration is stronger than in the baseline.”
“The upside scenario assumes that the tariff rate falls to about 7.5% by the end of 2026. We assume that Canada and Mexico are able to secure favorable trade deals by the second half of 2026 under a revised United States–Mexico–Canada Agreement. In addition, we assume that product exemptions, court rulings, and additional trade deals lower the average tariff rate further. We also assume that net migration is stronger than in the baseline, lifting the adult population by about 1.4 million people by 2030 relative to the baseline.
Despite much lower tariffs, the US economy is still expected to grow at a slower rate in 2025 compared with the previous two years. It is not until 2026 that the effect of the difference in tariff rates shows up more clearly in the inflation data. Softer inflation gives consumers more purchasing power. In addition, strong immigration puts upward pressure on aggregate demand. This allows real consumer spending to grow by 1.9% in 2026, only modestly lower than the 2.1% expected in 2025.” (“United States Economic Forecast”)
Although President Donald Trump says tariffs will bring in trillions and that deportations are good because immigrants harm the economy, most economists believe tariffs to be an overall harm to the economy—unless used for specific national policy goals—and having more people in a country is better for the economy.
Now that we have looked at the overall economy, we shall take a look at the—arguably more important—economic conditions for the average American.
While many Americans argue that productivity has gone down and that workers are lazy, this is not the truth. New technologies—such as computers, AI, and automation—have skyrocketed productivity. This means that companies get more out of the same employee. In theory, shouldn’t this mean that wages increase along with productivity?
The chart below shows graphs productivity and wages from 1948 to 2025 and accounts for inflation.
The Economic Policy Institue—the website which made this graph—notes, “If it [The money from the increased productivity of workers] didn’t end up in paychecks of typical workers, where did all the income growth implied by the rising productivity line go? Two places, basically. It went into the salaries of highly paid corporate and professional employees. And it went into higher profits (returns to shareholders and other wealth owners).” (“The Productivity–Pay Gap”)
Many people believe the solution for stagnating wages is to do things like increasing the federal minimum wage, stopping corporate union busting, breaking up monopolies policies, and requiring better working conditions. People against such policies say increasing the federal minimum wage will hurt small businesses which will have to pay their workers more and say any regulations put on corporations restricts the “free market.”
It is important to note that the federal minimum wage is $7.25 an hour and has not been changed since 2009. Many states have changed their minimum wage to be higher than this. For example, Washington’s minimum wage is $16.66 and will be changed to $17.13 on Jaurary 1st, 2025.
Whatever you believe, I encourage you to base your beliefs in facts and statistics.
Sources:
“United States Economic Forecast.” Deloitte Insights, Deloitte, 30 Sept. 2025, www.deloitte.com/us/en/insights/topics/economy/us-economic-forecast/united-states-outlook-analysis.html. Accessed 30 Oct. 2025.
“GDP by Country – Worldometer.” Worldometer, 2023, www.worldometers.info/gdp/gdp-by-country/. Accessed 28 Oct. 2025.
“The Productivity–Pay Gap.” Economic Policy Institute, 2025, www.epi.org/productivity-pay-gap/. Accessed 30 Oct. 2025.
