A basic tenet of economics is that when it comes to income and economic wellbeing, the important factor is not the amount of dollars earned, but the amount of goods and services that those dollars are able to buy. Yet, the Biden/Harris administration has been recklessly emphasizing the former at the expense of the latter.
In a recent report, the Republicans in the Congressional Joint Economic Committee (JEC) point out that the numbers being quoted by the Biden/Harris administration are totally misleading because they do not take into account the fact that inflation has been eroding the purchasing power of the dollars earned by most hard-working Americans. The fact is that, according to the Republicans in the JEC, real wages have declined over the last three and a half years when inflation is considered.
If we factor in inflation when determining real average weekly earnings, here is the picture that emerges.
If we project these wages following the pre-Biden/Harris trend, we see that real wages are 3.16% lower than projected if the previous administration’s trend had continued. Based on this, if we were to ask a wage earner that famous question, are you better off today than you were during the Trump administration, the honest answer would be a resounding NO.
A similar but worse picture emerges when we look at wages in terms of disposable income. The term disposable income generally refers to the income left over after basic necessities, like food and shelter, are met. This is the income that allows families to save, invest, and/or treat themselves to “luxuries,” like vacations, dining out, etc.
Here again we see a disparity between the pre-Biden/Harris trend and the Biden/Harris reality. In this case, the difference is a whopping 6.9%. Most people are keenly aware of this because either they or someone they know find themselves in a situation where they are struggling to make ends meet.
The main take away from this is that, despite the rosy picture painted by the Harris campaign, most Americans find that, in real terms, they are poorer now than they were during the previous administration.
