This week we got more astounding numbers showing inflation continuing to surge out of control. But beyond these big-picture headlines, we’re also gaining more insight into what this economic carnage actually means for everyday people.
With consumer prices rising 9.1% from June 2021 to June 2022, inflation is now at the highest level since 1981. Thanks to this inflation, workers’ real wages, or wages accounting for inflation, are actually in decline, falling significantly over the last year.
How’s that for “Build Back Better?”
New analysis from the Heritage Foundation’s E.J. Antoni puts these figures in tangible, everyday terms. He reported that the average worker has lost $3,400 in annual income due to inflation since President Joe Biden took office, while the average household with two working parents has lost $6,800.
“There are plenty of families that that’s more than their food budget a year,” Antoni told Fox Business. “I can’t emphasize enough how much this is really crushing consumers.”
The expert added that the costs of inflation have now added up to far more in losses for workers or households than they received in total stimulus checks.
Antoni’s specific data bring the real consequences of inflation into focus. In effect, inflation is a “stealth tax” on the public — a way the government confiscates and redistributes resources without formally raising our taxes. This lets politicians escape the political backlash that comes with raising people’s taxes — if people aren’t wise to what’s going on.
But we should be holding our elected officials accountable for the suffering because inflation is rooted in policy choices.
The federal government decided to print trillions of dollars out of thin air to “stimulate” the economy during COVID-19, but all it really did was make the dollars in existence less valuable. What’s more, it ran up trillions in budget deficits and flooded the system with wasteful “stimulus” spending that failed to produce the promised jobs but did successfully “stimulate” inflation.
This isn’t all Biden’s fault, to be fair. Many other government officials, from those in the Federal Reserve to Congress, bear the blame as well. And yes, some of the reckless money-printing and spending began under former President Donald Trump.
But Biden did come into office and, ignoring warnings from Democratic-aligned economists, poured more fuel onto the fire by adding trillions in wasteful spending as one of his first acts in office. What’s more, the president has made specific essentials such as gas more expensive through his anti-market policies and onerous regulations.
Workers whose paychecks have been effectively eroded by thousands are paying the price.