Thanks To Biden You Are Getting An Incredible Shrinking Paycheck

In the weekend edition of his Committee to Unleash Prosperity Hotline our friend economist and federal budget guru Stephen Moore posted a chart demonstrating that, thanks to

Bidenomics, wages have not kept up with prices, in stark contrast to the Trump years. The 3% gap between paychecks and inflation since Biden came to office is roughly a $2,100 real decline in purchasing power for average families.

By the way the Committee to Unleash Prosperity Hotline is free and it is definitely worth your time to subscribe and read it.

Biden apologists will complain that wages may have finally outpaced inflation in the last quarter of 2023, but that didn’t even begin to make up for the vast loss of buying power over the previous 10 or 11 quarters.

Indeed, our research shows that over the first two years of the Biden administration consumer prices posted the largest 12-month increase in nearly 40 years. As consumer prices rose, real (inflation-adjusted) average hourly earnings fell 2.4 percent from December 2020 to December 2021. In the first year of the Biden presidency wage increases minus inflation were negative for nine straight months.

A WTW survey of U.S. companies conducted in early 2022 reported employers were budgeting an overall average salary increase of 3.4%, which was less than half the then-current inflation rate of 7.9%. At year-end, another WTW survey reported the average U.S. salary increase grew to 4.2%, but still a third below the 2022 U.S. inflation rate of 6.4%.

The Dallas Fed found that 53.4 percent of workers lost ground to inflation in second quarter 2022, the median decline (that is, half of the declines were larger and half smaller) in real wage growth was 8.6 percent.

How did the severity of the real wage decline in second quarter 2022 compare with the declines over the last 25 years? The average median decline over the last 25 years was 6.5 percent, with real wage declines typically falling in the range of 5.7 to 6.8 percent, making the Biden wage declines among the worst in the past 25-years.

Summing up the first two years of the Biden administration the Dallas Fed concluded that despite the stronger wage growth due to the tightness of the labor market, a majority of workers found their wages falling even further behind inflation. For workers who experienced a decline in their real wage in second quarter 2022, the median decline was 8.6 percent.

“While the past 25 years have witnessed episodes that show either a greater incidence or larger magnitude of real wage declines, the current time period is unparalleled in terms of the challenge employed workers face,” wrote the Dallas Fed economists in October of 2022.

As the economists at the Charles Schwab brokerage observed in a November 2023 article, “looking at the change in the levels of CPI and core CPI since right before the pandemic began, you can see that prices are up by nearly 19% and 17%, respectively. It's unlikely that the average consumer is going to cheer about the year-over-year percentage change in CPI having come down to 3.2%. They likely care more about the fact that the prices they're paying for goods are considerably more expensive relative to a few years ago.”

Overall, the category of “food at home prices” rose 1.3% for 2023, a seemingly small number but one that comes after years of high costs and a high of 13.5% in August.

This means that Americans who spent $100 on their grocery bills in 2019 (when Donald Trump was President) would be spending about $125.51 on the same amount of food in December 2023 when Joe Biden was President, according to data from the Bureau of Labor Standards reported by the New York Post.

According to the January 11, 2024, CPI release, price increases over the year include:

Beef: +8.7%

Baby Formula: +7.3%

Housing and Rent: +6.2%

Pet Food: +5.1%

Fresh Fruits: +3.6%

As Senator Rick Scott said, “The U.S. national debt has officially reached a record high of more than $34 TRILLION. Debt matters because it fuels inflation and makes it harder for the federal government to do the things it promised to do for families across the country– like build roads and fund Social Security, Medicare, Medicaid, and national defense. Floridians know that the debt and inflation crises we find ourselves in today were 100% preventable—and they can feel it costing them thousands of dollars per year. But unfortunately, thanks to the Biden administration’s reckless tax-and-spend agenda, hardworking families are forced to pick up the bill. He has abandoned things that should be a priority, and the fact that Biden doesn’t care to fix them is borderline criminal."

• Control of Congress

• Federal Reserve

• printing money

• inflation

• money supply

• supply chain

• federal budget deficit

• pandemic spending

• Bidenflation

• wages

• purchasing power

• gas prices

• food prices