President Biden recently marked one year in office. He’s giving himself high marks for his handling of the economy so far, recently tweeting that “the Biden economic plan is working, folks.”
That’s not what the numbers show.
Devastating new data reveal that while nominal wages have risen over the last year, Americans’ real wages have declined.
Your nominal wage is the number that shows up on your paycheck. Your real wage is what your paycheck can buy you—basically, your wages relative to inflation.
When we look at this much more important metric, the “Biden economic plan” doesn’t look so hot after all.
The latest inflation data show consumer prices rising 7.5% from January 2021 to January 2022, Biden’s first year in office. Over that same time period, wages rose just 5.7%.
As a result, real wages have fallen 1.7%. That means Americans’ actual purchasing power has dropped—aka, workers have gotten poorer.
Biden’s defenders might blame the pandemic, which certainly isn’t in the president’s control, for the sluggish wage growth and surging inflation. But as the above graph shows, the economy under President Trump in 2020 was not experiencing these same problems despite the pandemic raging then, too.
So, there’s really no escaping the reality that the first year under this White House has been bad news for American workers. Why?
Biden’s massive ‘stimulus’ schemes failed to create the promised jobs, funneled huge sums to wildly ineffective government programs, and ran up trillions in deficits that fueled inflation.
Meanwhile, the Federal Reserve printed trillions of new dollars and “flooded the system” with money. While not in Biden’s direct control, the White House has never pushed back on this recklessly loose monetary policy—in fact, it has nominated more Fed officials who share this kind of dangerous philosophy.
To be fair, not all the economic news is bad for President Biden.
For example, we did recently see very high levels of economic growth in 2021. However, that’s likely more of a “bounce back” from the massive pandemic dip in 2020 than a reflection of true growth from sound economic policy.
Similarly, the unemployment rate has ticked down to just 4%, which isn’t bad at all. Yet this only counts those seeking work. The Democrats’ massive welfare spending and continued closure of schools have led to millions of Americans dropping out of the labor force entirely, a key problem not captured by the decent-seeming unemployment rate.
Add this context to surging inflation and declining real wages and whatever spin the president has put on this economy quickly falls apart. Nonetheless, the president keeps insisting that “the Biden economic plan is working.”
Working for who, exactly?
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