Price increases from inflation have created the largest gap since President Joe Biden took office for the amount Americans’ wages have increased compared to how much inflation has cost, according to data from the Bureau of Labor Statistics (BLS) analyzed by the Daily Caller News Foundation.
Average hourly earnings have increased moderately from $29.93 per hour in January 2021 to $34.55 per hour in January 2024, but when adjusted for inflation since the beginning of Biden’s term, average wages are comparatively only $29.29 per hour, equating to a difference of $5.26 per hour, according to data from the BLS. Inflation has risen rapidly under Biden, with prices increasing a total of 18% since the president took office in January 2021. (RELATED: US Stocks Tumble After Inflation Comes In Above Expectations)
“The inflation tax has crushed American consumers,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the DCNF. “Put simply, families are paying more but getting less. Businesses are in the same position, paying more for all of their inputs as well. The beneficiary is the government. Everyone should think of these higher prices as a tax paid to the Treasury. Inflation is a transfer of wealth from the people to the government, and there’s no better definition of a tax than that.”
The situation becomes even more dire for struggling Americans when the number of hours employees are working is considered, with the average number of hours worked per week dropping from 34.9 in January 2021 to 34.1 in January 2024. Employers are resorting to cutting hours and adding part-time jobs as costs for business rise, resulting in Americans earning less per week.
And while the talking heads love to talk about rising wages, they haven’t come anywhere close to keeping up with inflation, even the underestimates from the CPI – the average working in Jan paid an inflation tax of $5.14 PER HOUR (the difference btwn the two lines here, Jan ’24): pic.twitter.com/aaCRRJwc76
— E.J. Antoni, Ph.D. (@RealEJAntoni) February 13, 2024
Some economists point to high spending policies under Biden as one of the causes of recent inflation, with the national debt exceeding $34 trillion right before the end of 2023 after an over $800 billion budget deficit in just the fourth quarter. Biden signed the American Rescue Plan in March 2021, which authorized $1.9 trillion in new spending, and the Inflation Reduction Act in August 2022, which added $750 billion in new spending.
“Today’s report shows that wage growth has been the strongest of any economic recovery in 50 years,” Biden said in a statement about the inflation data on Tuesday, referencing the economic recovery from the COVID-19 pandemic that began before he took office. “At a time when growth and employment remain strong, inflation declined by two thirds from its peak but we know there’s still work to do to lower costs.”
Inflation peaked in June 2022, when the consumer price index spiked at 9.1%, and has failed to decelerate below 3% since. The year-over-year rate of inflation was most recently measured at 3.1% in January 2024, higher than expectations of 2.9%, leading many investors to switch their predictions to forecast stickier inflation.
“Since many families can’t afford this extra tax, they’re putting it on credit cards, which is why debt balances have exploded over the last three years,” Antoni told the DCNF. “The problem is getting worse as many people have maxed out their cards and turned to buy-now-pay-later plans to bridge the gap. An increasing number of families are living paycheck to paycheck, including those earning over $100,000 annually. This will not end well. And the so-called experts should have seen this coming a mile away.”
Americans gained $50 billion in new credit card debt in the fourth quarter of 2023, bringing the amount to an all-time record of $1.129 trillion. In total, household debt climbed $212 billion in the fourth quarter, totaling $17.5 trillion.
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