WASHINGTON—Fueled by an enormous increase, more than 40%, in the price of gasoline, Donald Trump’s war on Iran has wiped out all the hourly wage growth for workers that occurred since he returned to the Oval Office in January 2025.
That month, an average non-supervisory worker earned $37.53 hourly, adjusting for inflation, the Economic Policy Institute noted. That wage rose to $38.51 this past February. Trump, allied with fellow right-winger Israeli Prime Minister Benjamin Netanyahu, launched the war on February 28.
And average hourly wages immediately started to decline, an EPI graphic, based on the Labor Department’s Consumer Price Index for May, which was released June 15, shows. Last month, the average hourly wage was back to $37.53.
“The war imposed disastrous costs—both economic and humanitarian—around the world,” EPI’s Ben Zipperer wrote. “The U.S. has been more insulated from these costs than most other countries, yet even here they are extremely large. The war’s effect in pushing up U.S. energy prices has erased all the real (inflation-adjusted) wage gains workers have made during his second term.”
Zipperer actually may be understating the case. A look at the components of the “market basket” which the Labor Department uses to create the CPI confirms what anyone trying to fill up their gas tank knows: The price of gasoline has skyrocketed.
Not adjusted for seasonal variations, gasoline rose by 40.5% nationwide from May 2025 to May 2026. More than half of the hike (21.3%) occurred in March 2026 alone, just after the war began.
Fuel oil was even worse. Unadjusted, it rose 58.9% from May 2025 to May 2026. Most of that, too, was in February (11.1%) and March (30.7%) of this year.
Overall inflation in the last 12 months, from May 2025 to May 2026, was 4.2%, the BLS reported.
Gasoline is 4.1% of the BLS market basket, half the share for food (8.2%). Both are far below shelter (35%), including 25% for mortgage and other home-buying costs, but not rent (7%).
“The sudden burst in inflation, along with slowing nominal wage growth, means the average hourly real wage for private-sector workers is now no higher than it was in January 2025,” Zipperer said.
“So far, excessive inflation has been limited to energy and airfares. But as long as the war continues, there is a heightened threat that price increases will spill over to the broader economy, triggering a more permanent increase in the cost of living and further reductions in real earnings,” he warned.
All that data emerged after the non-partisan progressive Roosevelt Institute in New York released a survey of attitudes about the economy. The bottom line: People are unhappy, and politicians who look out for themselves and corporations thinking only about the bottom line get the blame.
“Nearly eight in 10 people are worried about their personal finances, either their current situation or their ability to save for the future,” the survey reported. “Only 18% of people surveyed say they haven’t had to cut back or make financial trade-offs in the past two years. More than half lack the ability to retire comfortably, nearly half lack freedom from consumer debt, and 40% say they don’t earn enough to cover everyday costs and have a cushion for when something unexpected comes up.
“These pressures are also a power problem. When asked what most gets in the way of government providing a good life, 50% of people surveyed cite politicians who look out for themselves instead of the people they represent, while 39% say the system is rigged in favor of corporations and the wealthy.”
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