Democratic strategists and pundits can’t figure out why everyone doesn’t love “Bidenomics.” As one member of the political elite fumed in a recent New York Times article, despite President Biden’s allegedly stellar economic policies, Americans mistakenly think they’re worse off.
There’s no mystery here. The economy has been terrible for the average American, and the elites are just isolated.
Front and center of any discussion of Bidenomics is inflation. Prices have risen 17% on average since Mr. Biden became president, versus rising a mere 1.4% in the year before he took office. Just 18 months later, inflation hit 40-year highs. While annual inflation has since come down, prices are still rising, and now the pace is picking up steam.
The annual increase in the consumer price index was 3% in June, 3.2% in July and 3.7% in August. Inflation is moving in the wrong direction, and people are worse off because of it.
While the Biden administration never misses an opportunity to cite rapid wage growth during its tenure, inflation has completely outpaced workers’ income gains. It’s true that average hourly earnings are up 13% since Mr. Biden took office, but that’s less than inflation. In addition, businesses have been cutting hours. The result is nearly a 5% drop in workers’ real, inflation-adjusted weekly earnings.
This is a key reason why people are so pessimistic about Bidenomics: Their higher pay doesn’t afford them a higher standard of living. For the typical American family, weekly paychecks have grown more than $230 during Mr. Biden’s presidency, but those paychecks buy about $100 less. The result is an effective 5,300 reduction in the annual household budget.
Put another way, inflation is costing many Americans more than federal income tax. Consider that average American workers pay about $3.11 on their hourly wages in federal income tax, but the hidden tax of inflation costs them more than $4.50 on those hourly wages.
While costs for families are up everywhere, Bidenomics has had a particularly harmful effect on energy prices. Countless Americans have sticker shock every time they fuel up their vehicle because gasoline prices today are 60% higher than when Mr. Biden took office. The weekly trip to the gas station is a reminder for many that Bidenomics isn’t working for them.
But gasoline isn’t the only energy source that has soared in price under the Biden administration. Energy prices overall have jumped 30% in less than three years.
That pales in comparison, however, with the stratospheric rise in housing costs. When Mr. Biden took office, the monthly mortgage payment on a median-priced home was $979. Today, it’s $2,041. The same house today costs a family almost $13,000 more per year in monthly payments. It’s no wonder that people are unhappy with the economy when housing costs have more than doubled.
The eye-watering increase in the cost of living has caused many Americans to use credit cards just to make it from paycheck to paycheck. The result is a record-high $1 trillion in credit card debt and record-high interest rates on that debt, too — a recipe for impoverishment.
Yet Bidenomics has allegedly created a robust job market, and unemployment is near historic lows. With so many Americans working, how can they view the economy in such a negative light? The fact is, employment still hasn’t returned to its pre-pandemic trend, and the unemployment rate is artificially low.
Because millions of Americans never returned to the workforce after the COVID-19 lockdowns, they’ve been excluded from many labor market metrics. Accounting for this raises the unemployment rate to over 6%.
Ultimately, people disapprove of Bidenomics because rhetoric can’t replace reality. Talking points from the Biden administration won’t put food on the table, gas in the tank or money in the bank account. Telling Americans to disbelieve their lying eyes and empty wallets adds insult to injury and won’t improve Mr. Biden’s low approval rating on the economy.
This piece originally appeared in The Washington Times