Real wages shrunk for the seventeenth month in a row as the Biden administration continues to ramp up spending amid historic inflation.
Real average hourly earnings fell 2.8% year-on-year in August, with wages rising last in March 2021, according to a Bureau of Labor Statistics (BLS) report alongside archived data. Despite hourly earnings increasing 0.2% from July to August, weekly earnings decreased 0.1%, as the average hours worked per week fell 0.3% from July.
Since President Joe Biden took office, real wages have fallen 5.5%, or around $3,000 per year for the typical American, according to Heritage Foundation economist E.J. Antoni. Through August, the U.S. Government has borrowed nearly $950 billion, at a rate of nearly $3 billion per day, according to the Committee for a Responsible Federal Budget.
“After casting blame in every direction for the inflationary storm they created, the Biden administration now wants to take credit for an inflation rate that remains nearly six times what it was when Biden took office,” Antoni said in a statement shard with the Daily Caller News Foundation. “The reality is that American families are still losing ground because of his policies.”
Meanwhile, poverty rates for 2021, Biden’s first year in office, rose to 11.6% from 11.4% the year prior, though not sufficiently to be statistically significant, according to the U.S. Census Bureau. Poverty rates fell for five straight years before jumping to 11.4% in 2020, according to the U.S. Census Bureau.
Real median household income in 2021 stagnated, falling slightly to $70,784, compared to $71,186 in 2020, the Census Bureau reported.
The cost of various important commodities also rose, helping inflation stay high and beating economists’ predictions that year-on-year inflation would fall to around 8.1% in August. The cost of groceries, for example, have broken 40-year records for price hikes every month since February.
Meanwhile, despite the fact that energy prices had fallen from July, they remained extremely elevated year-on-year in August, according to the BLS. Gasoline remained elevated at 25.6% higher year-on-year, while fuel oil was up 68.8% year-on-year, electricity was up 15.8% year-on-year and gas utilities were up 33% year-on-year.
Elevated prices, particularly in food, utilities and shelter, are expected to remain at least through the end of the year as the Federal Reserve combats inflation through a series of interest rate hikes. The Fed characterized the economy as “generally weak” just one day before Treasury Secretary Janet Yellen praised the Biden administration’s economic efforts for leading to economic recovery, going so far as to argue the U.S. economy was performing successfully by “any traditional metric.”
“While the Federal Reserve is belatedly beginning to do its job by reducing money creation and allowing interest rates to rise, it is working at cross purposes with Congress and the president, who continue their profligate spending and borrowing,” according to Antoni. “To avoid a worsening recession, our governmental and monetary leaders must stop the reckless spending, borrowing, and money-printing, while also embracing policies that will unleash American energy production.”
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