What Has Made Americans Poorer?
No wonder Mr. Biden is trying to avoid the story. The WSJ reports that according to the Census Bureau, here’s the real deal:
A gusher of unprecedented and unnecessary social-welfare spending helped to produce the highest inflation in 40 years, which has made Americans poorer. The last thing Congress should do is heed Mr. Biden’s demand to do it all again.
- Median household income adjusted for inflation fell last year by $1,750 to $74,580: down $3,670 from 2019.
- Households in the fourth income quintile—those making $94,000 to $153,000—lost $4,600 in 2022 and $6,700 since 2019.
- Middle-class Americans who think they’re losing ground are right.
Inflation has outpaced the earnings growth from work, continues the WSJ.
Real median earnings for full-time workers last year fell $3,620 for men and $2,880 for women despite a tight labor market that had companies paying more to attract and keep workers.
The female-to-male earnings gap declined to 16% from 18% in 2019, but mainly because inflation has eroded men’s wages more than women’s. Wages in industries with more female workers such as healthcare and hospitality rose faster than those with more male workers such as manufacturing. But neither men nor women kept pace with the cost of living.
Inflation Hurting Seniors
Even when excluding capital gains, higher earners saw a bigger drop in real incomes than Americans at the lower end. One reason is the latter group includes many seniors whose Social Security checks are adjusted for inflation.
Cutting Child Poverty Blarney
President Joe Biden lashed out at Republicans in Congress, blaming them for not extending the expanded the child tax credit.
“We cut child poverty by nearly half to record lows for all children in this nation largely by expanding the Child Tax Credit,” (Joe Biden) insisted.
“The rise reported today in child poverty is no accident—it is the result of a deliberate policy choice congressional Republicans made to block help for families with children while advancing massive tax cuts for the wealthiest and largest corporations.”
As the WSJ argues, “the child poverty rate did jump to 12.4% from 5.2% in 2021, but that is roughly the same as before the pandemic.”
The expiration of the expanded child credit accounted for about a quarter of the increase in the child poverty rate, though its impact was offset by an increase last year in food stamps, free school lunches and housing subsidies. Most of the increase in child poverty owed to the end of stimulus payments, inflation, and higher taxes.
Another $1.2 Trillion?
Has Joe Biden forgotten that Republicans didn’t control either branch of Congress in 2021 or 2022?
West Virginia Democrat Joe Manchin blocked an extension of the expanded child tax credit because it was estimated to cost $1.2 trillion over a decade.
What Joe Biden has apparently forgotten is that the Inflation Reduction Act’s green-energy corporate welfare and subsidies for electric vehicles and solar panels largely benefit the affluent.
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