“For all of the ‘pain at the pump’ stories, the answer is that wages and salaries have kept pace with inflation since Biden took office—and by this measure, most Americans are much better off than before the pandemic hit in 2020, and before he took office in 2021.”
—Robert J. Shapiro, Economist
I just don’t get it. OK; I get the part about the administration in office bearing the brunt of responsibility. Inflation is tough—especially for people whose budgets are already stretched—though it’s a worldwide problem and the US is less affected than many Western European countries.
But are people’s memories so short? Do they not remember the huge tax cut that was the only economic initiative from the former guy’s dreadful four years?
Are they unaware that when President Biden took office, we were in the throes of the pandemic, with massive unemployment that’s been essentially erased?
Do they not realize that historically, Democratic administrations are far better for Americans economically than are the trickle-down Republicans?
And are they unaware that when the Biden administration proposed inflation-fighting legislation that the Democrats passed, no Republicans voted for it?
And when reporters interview the voters who tell them they trust Republicans more to handle the economy, do they ever ask the follow-up question: WHY?
The quotation at the beginning of this post appears in an article that provides some solid information refuting the long-held but false assumption. It appeared in Washington Monthly last month, written by Robert J. Shapiro, an economist who formerly led the International Monetary Fund and is an adviser to policy makers and businesses.
The piece is titled “Yes, Americans Are Better Off Under Biden. “
Shapiro begins with Ronald Reagan’s closing argument in his final debate with Jimmy Carter. He asked Americans “Are you better off than you were four years ago?”
Shapiro suggests that Republicans aren’t asking that question today because they know better: “Based on jobs, incomes, wealth, poverty, and health insurance, Americans are better off today, including inflation.”
The jobs record is indisputable, he says: “…more than 9.5 million unemployed Americans found jobs over the past 18 months, and the unemployment rate fell from 6.4 to 3.5 percent.”
The income picture is more complex because of the pandemic, which brought massive unemployment, supply problems, and energy cost increases that fueled inflation. Generous government spending led to the economic recovery but also was inflationary.
Thus, it’s necessary to examine how much inflation has cut into the “record 14.9 percent surge in overall wage and salary income since Biden took office.”
For most people, the answer appears to be “it hasn’t.” Wages and salaries have been sufficiently high to offset inflation, and “most Americans are much better off than before the pandemic hit in 2020, and before he [Biden] took office in 2021.”
I’m not including the specific details and technical note Shapiro provides to back up his assertions, but those who’d like to dig deeper can do so using this link.
“The math may sound complex, but in fact it’s simple: In June 2022, the average working American earned $74,643 in wages and salaries, compared to $74,624 in January 2021 and $70,274 in February 2020. Even with 9.5 million more people working, the average working person earned as much in June, after inflation, as when Biden took office.”
Thus, he states:
“The answer to Reagan’s question is ‘Yes’ on wages and salaries as well as jobs, a remarkable achievement given the pandemic.”
He adds that the government assistance to help us through the pandemic and the job growth that followed have made Americans “significantly wealthier than before Biden took office” through savings and spending that bolstered employment.
“According to the Federal Reserve, after inflation the net assets of Americans increased by nearly $2 trillion from the first quarter of 2021—when Biden took office—to the first quarter of 2022. (We exclude the top 1 percent because their assets are notoriously hard to measure.) “
As a super-pleasant surprise, net assets grew the fastest among low- and moderate-income families.
“From the first quarter of 2021 to the first quarter of 2022, the inflation-adjusted wealth of households in the lowest income quintile jumped 15.2 percent and just 0.8 percent for those in the top income quintile (again, excluding the top 1 percent).”
In addition, the poverty rate fell an impressive two percent from December, 2020, to May, 2022—from 16.1 percent to 14.1 percent, according to the Center on Poverty & Social Policy at Columbia University. (Though as I’ve noted elsewhere, it’s now rising because the extension of the Child Tax Credit was defeated by the usual suspects in Congress; it must be reinstated.)
Similarly, the Biden administration’s efforts to enhance health care coverage led to a drop in the percentage of uninsured Americans to “record lows” from late in 2020 to the early months of 2022. Among adults aged 18 to 64, the drop was from 14.5 percent to 11.8 percent, and among children it decreased from 6.4 percent to 3.7 percent, reports The Department of Health and Human Services.
“Imagine how Donald Trump would brag if he could tout record job creation, record low poverty, and record health insurance coverage—not to mention wealth gains and wage and salary gains that kept up with inflation. That’s a message that Democrats should carry into the fall campaigns.”
So I’m scratching my head as I ponder all these improvements. Why on earth would anyone think we should elect trickle-down Republicans who always make sure the wealthiest Americans benefit from massive, largely unpaid-for tax cuts that don’t produce significant growth but do add greatly to the national debt—as well as to our nation’s unconscionable and destabilizing income inequality?
Please help me correct this gross misunderstanding among any voters who tell you they’re voting for the Republicans “because of the economy.”