Fiscal State of the Union: Biden’s Real-Wage Decline
Inflation continues to decimate American’s standard of living. Real wages – the amount people are paid when adjusted for inflation – are falling as well. Since President Biden took office in January 2021, the increase in prices due to inflation is over 14%, resulting in a loss in real wages of nearly 4%. Average hourly wages have only risen by 10% as of January 2023. This graph shows the decline in real wages since January 2021.
This loss in real wages is not limited to one segment of the economy, either. The decline is seen in virtually every major sector, resulting in nearly all Americans working more hours for less pay. Americans are struggling to keep up, and the Biden administration’s relentless spending has only made them fall farther behind.
Last week, the Personal Consumption Expenditures (PCE) price index – the Fed’s preferred measure of inflation – came in much higher than expected, showing that the 40-year record inflation, which has gone on for the last 15 months, is showing few signs of slowing down. This has resulted in the American people paying over $700 more per month to purchase the same goods and services as they did when President Biden took office. This, coupled with decreased wages is having a crippling effect on American families and the economy.
Without a reversal in policy that would lead to a slowdown in inflation and an increase in wage growth, recovery to a pre-pandemic standard of living will be nearly impossible, leaving countless Americans behind.